Rags to Riches Using Landbanking. Do You Want to Know How to Do It?
by: PaulT.Robertson |
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Landbanking is the act of buying land which has been pre-developed cheaply and keeping it until the value increases. To do this, you first need to research the market. You have to buy land which will soon be in the growth pattern of an urban area - the key is to buy this land before other developers get in on the area.
There are some very successful people who have made much of their fortunes by Landbanking. Among them are Bob Hope, Donald Trump and Howard Hughes. With some urban areas undergoing explosive growth, now is the time to get into Landbanking and make a killing.
One way to land bank is to purchase pre-developed land and hold onto it until you are ready to retire or it is at it has reached its prime. Landbanking is an excellent way to ensure you will be able to live comfortably as you get older.
As you may have gathered from the examples I gave, there is certainly a lot of money to be made by land making. More so than any other kind of property investment, Landbanking is lucrative. While every other type of investment is subject to ups and downs, land only increases in value. If you buy land which is in the path of the projected growth of a urban area, there is a lot of potential revenue.
If you choose an area which is not located in this path, the return on your investment will be far less. Remember that you'll likely need to hold onto this property for a long time; but if you don't want to sit on this land for a long time, there is another way to use Landbanking.
This is to buy some land which is not being used as profitably as it could be. You'll be able to buy the land for much less than its potential value. What you have to do is to change the zoning of this land.
Let's say it is currently being used for a small commercial building. If you can get the land rezoned for residential use, you could sell it to a developer for a future condo development. The land has thus become more valuable because the developer has the potential to make a much greater profit selling numerous condos then he would have had selling one lowly storefront.
In both types of Landbanking, the key is to see the land for what it could be, not for what it currently is. You need to remember that you will not see your profits until you sell; so don't pay too much for this land. The lower the purchase price, the higher your profit margin will ultimately be.
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About the Author
Author: Paul T. Robertson exposes secrets about Landbanking on the Investment House website where he explains priceless details concerning property investment strategies.
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