Land Banking

Land banking is investing in unimproved land or real estate, holding it till the prices rise and selling the property to earn the profits. Land banking is one of the most lucrative investments. Investing in land provides you several benefits.

Land is an asset which never depreciates in value. Value increases with times. You don't need several dollars to own an unimproved land. But the profits which you earn on this property depend upon the developmental activities taking place in your area, the purpose for which it is purchased and the party which is purchasing your unimproved land. You might earn a handsome profit if you sell the land to a manufacturer want your land to lay down a plant or if you sell your land to an entrepreneur who wishes to use the land for any commercial activity.

You can also put your raw land to agricultural activities, grow some seasonal crops, vegetables or fruits and earn profit on the produce. Leasing your land to such activities also help you to earn the profits as well as retain the ownership. Besides you will also not have to spend on the maintenance of your asset.

Owing a piece of land is also a good option if you plan to invest for your retirement or for wedding of your children or to save for their education. Owing a land fulfils two objectives of investment: It gives you the ownership and increase in an asset the value of which appreciates with times and it provides you with liquidity. You can sell the property and earn profits whenever you face some financial hardships or need some money to achieve your financial objectives.

Finances for land are easily available in the form of loans. You can apply for the loan and use the equity in your property to own the piece of land for your future use. You can place the land itself as a security and lease the land so that you earn the income and use this income to pay the loan installments.

Government and non profit organizations also indulge in land banking activities. But their motive is different. They indulge in land banking so as to control the development of a particular area and preserve the green space, forest cover or promote a particular area for agricultural activity or to build school, colleges or for other projects which provide benefits to the society.

As the activity of investing in lands is increasing the scams in the field are also on the rise. Therefore if you are interested in any such investments, check well and ascertain the authenticity of the company or the broker and find out about the zonal laws, before you invest your hard earned money with any company involved in any such activity.