Land Banking Strategies

All investment strategies have their advantages and disadvantages. Fortunes have been made investing in land, but money can be lost if the investor is forced to sell under pressure at the wrong time.

Following are some of the reasons given by investors for acquiring land:

  • To develop the land at some point in the immediate future for residential, commercial, or industrial purposes;
  • To develop the land at some point in the distant future;
  • To pass the land on to future generations of the investor's family;
  • To hold the land as a long term investment with the intention of selling or exchanging it in the future at a profit;
  • To create a hedge against inflation and the devaluation of our currency;
  • To create a hedge against soaring state and national debt;
  • Recognition of the fact that the supply of land is limited. No more land is being made and it cannot be printed by the government;
  • The profit made on land is taxed at the lower capital gains tax rate and any profit can be deferred by utilizing a 1031 tax deferred exchange;
  • It can be utilized to build a financial statement as it increases in value over time;
  • It can be easily added to a self-directed IRA or 401K retirement plan account;
  • It can provide a private retreat for its owners;
  • It can be held as open space to protect the environment in perpetuity;
  • It presents no tenant problems, maintenance is low or non-existent, and there are no homeowner association restrictions; and
  • To establish locations for commercial signs;
  • To establish locations for the erection of Christian crosses;
  • Through your legacy it can help your family, including future generations, develop financial security and independence.