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What is “land banking” by Wayne Terpend?
Land banking is an investment strategy that involves purchasing undeveloped or undeveloped land. The core idea of this strategy is to hold this land for future sale or development, leveraging the potential for its value to increase over time. This approach is especially popular with investors who want to diversify their portfolios beyond traditional stocks and bonds.
Advantages of land banking
Potential for appreciation in value: One of the main benefits of land banking is the potential for appreciation in the value of the land, especially if it is located in an area with potential for future growth and development.
Low maintenance costs: Unlike residential or commercial properties, undeveloped land requires minimal maintenance. This aspect makes it a less demanding investment in terms of both time and money.
Flexibility of usage: Land banking offers diverse opportunities. Investors can choose to sell the land when its value increases, lease it, or develop it for residential, commercial, or agricultural use.
Hedge against inflation: Real estate, including land, often acts as a hedge against inflation. When the value of money goes down, the value of tangible assets like land usually goes up.
Control over investments: Land banking gives investors the opportunity to take full control of their investments. You can decide when to sell or develop based on market conditions to ensure optimal returns.
Limited Supply: Because land is a limited resource, its value can rise when demand exceeds supply, especially in growing cities and suburban areas.
Long-term stability: Land is a tangible asset that can provide long-term stability and security in a diversified investment portfolio.
