Land Banking

Land Banking, as I have experienced it vicariously through the actions of a friend and on a small scale, appears to be quite worthwhile.

My friend, the land banker, works in the medical profession, and when she arrived back to NSW fresh from her experiences of living in a quite beautiful spot in Queensland where she, in partnership, owned some land albeit no house.

The land is on gorgeous acreage located right next to a river and situated quite near a thriving township. Bought cheaply back then, but if you wished to buy it now, well, you might have to sell your firstborn!

Her story goes that when she returned from Queensland to her initial place of residence, she borrowed on her acreage to buy a house in a country town some miles from where she was working.

The beauty of her chosen residential town is that it is located quite close to a larger town, which is about an hour’s drive from a major Australian city. So in effect, she now has in partnership, two properties.

When I asked her how she found her properties; she said that what she looked for was a smaller village that was within driving distance of a city, where people in the future could commute easily to work, while they enjoy the more fruitful aspects of country life.

Good idea, so what would that involve I wondered.

Well, it seems you need to go out hunting for the right village within a radius of a larger city; and that right village needs to be showing early signs of becoming a future dormitory suburb of the city. And of course, you would need to get there early before the big investors are aware of what is happening.

So my friend now has two properties, and she wanted to invest in another. The next buy was to buy a block of land in her village borrowing against what she has formerly purchased and is now gradually paying off. This land was bought for less than twenty thousand dollars but is now valued after about eight years of ownership, at approximately $100,000.00.

The next purchase occurred when they went out for a picnic in a small community where to purchase any property at all was like a gift from the Gods’.

This piece of land was also located right on a river. They bought this little parcel of land for a minimal amount but it, like their other land purchases, will increase in value. Plus, they were so excited that they now had entrée to this little village because of becoming ratepayers! A tiny fishing village that they had loved visiting over the years.

So after ten years my friend now owns, along with the bank, four properties, and while nothing is in great repair and indeed 75% of the purchases have no housing on them the bottom line is that she has something solid, land.

Her investment in turf.

Not fluctuating stocks and shares where one wrong turn on Wall Street knocks hundreds of thousands off your Superannuation or Share Portfolio.

Basically, her bottom line is increasing slowly and carefully as per her devised Land Banking Plan.

After all this time and returning home with little assets, she, with her hard work, smart thinking, assiduous care, planning, and some most fortunate investments in Land Banking, has completely turned the family fortunes around.

My friend did not employ anyone to advise her, nor did she go through any investment companies, but she did find a great local bank that stood by her and helped her to finance her ideas.

Greatly to her credit and with some hardship involved, her plan of achieving her goals of owning land will have been achieved in about ten years. Those ideas that she has had have enabled her to put into practice her theories, as a single investor, on how to tackle the whole Land Banking premise.

Should you be planning to investigate the possibility of investing into your own land banking portfolio please ensure that you research the applicable zoning laws. It would be too terrible to invest and then find you can do absolutely nothing with your buy because of council restrictions and/or embargos being placed on your chosen piece of the country.

But a visit to your city or country planning department should clarify if there are any future but limiting plans to you, for your area of purchase. Some sage advice I heard somewhere was to “buy land, [because] they’re not making it anymore.”

Bearing in mind all the above anecdotal information, Land Banking is not guaranteed to be a lucrative investment!

A genuine case of Buyer Beware applies here.

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