What is land banking?
In most countries, the soil is a hot commodity due to large cities and commercial development. Open land is often consumed as a dizzying level of cities and developers who are hungry for space to build more housing, retail and office space. In anticipation of future development, investors and urban, regional or state governments can buy and retain land that is unoccupied, rural or insufficiently used for relative negotiations before its value Skyrocketes as soon as it eventually declines. This practice is called Land Banking .
If ground banking is used by the city or regional government or even a non -profit agency, it usually retains some control over the future development of a particular area. Some cities were particularly aggressive in maintaining suburban growth at bay and using ground banking to maintain green space or completely stop growth. Land Banking can also be used for cities and KRAnd to apply control over how the soil is developed, checking, if the zone is for commercial or residential use. They can also determine future developers that some or the entire land will be used for low -income housing.
Land banking, if they use cities and governments, can also be an advantage for future buyers by holding rising land prices at bay. It also gives these agencies the ability to build new schools, parks and other urban projects on land that can become too expensive for a tight budget of the city, but are necessary for expanding cities.
Land Banking is also a practice used by private investors who risk what is usually cheap, undesirable assets in hope when they come to grow, make a significant profit. Donald Trump, Howard Hughes and Bob Hope are all famous bankers of a country that buy large orders of land in what are now highly lucrative areas like JSOU Manhattan, NY, Las Vegas and South California.
For many private individuals, no matter how cheap land, capital may not be necessary to participate in land banking. Many ground banking frauds have appeared, especially in the UK to address these investors. They include terrestrial banking companies that buy large areas of land and divide them into smaller affordable land. Unfortunately, the investor can buy land that could never be developed due to restrictions on land -use planning or other restrictions.
6 Although Mark Twain gave the advice of the sage to buy land, [because] they are no longer doing, it is not guaranteed that this is a lucrative investment.