What is Land Banking?

Land Banking is the practice of purchasing land with the intent to hold on to it until such a time as it is highly profitable to sell it on to others for substantially more than was initially paid. Land is becoming increasingly popular as an investment due to the benefit of its being a tangible asset as opposed to Shares or Bonds. This type of investment has gained such popularity it is now possible to land bank worldwide and there are several firms set up to offer opportunities to do so.

Land banking can be an extremely lucrative investment. The land that you have banked can appreciate in value more than any other purchase you will ever make. If you had purchased one acre of land on Ventura Boulevard in the San Fernando Valley in 1967, it would have cost you 38,000 US dollars (USD). By 1979, that same plot of land was worth 380,000 USD, and by 1991, it was worth 2,100,000 USD.

Over the years, fortunes have been made in land banking. Financially minded investors who understood the lucrative concept of buying land in pre-developed areas have become very wealthy. Business tycoon Donald Trump is a huge fan of land banking. At the moment, he owns one of the last remaining, undeveloped land spaces in Manhattan, New York. It is a 100-acre plot that runs from 59th to 72nd streets along the Hudson River, and when developed will be called Trump Place.

There have been many other famous land banking visionaries in the past. Howard Hughes bought and held land in Las Vegas Valley and Southern California. In the early 1950s, Hughes acquired a 22,500 acres of land along the Las Vegas Valley. Today, this land is known as Summerlin, and by 2015 it is projected to be home to 160,000 residents living in 30 separate villages.

The comedian Bob Hope was a great believer in land banking. Hope invested huge amounts of money in Southern Californian land when it was little more than orange groves and scrublands. Hope owned nearly 30,000 acres of land and was the largest private landowner in California. When Bob Hope died, reports of his fortune were near the 1 billion USD mark.
Land banking, for some, can be a great investment opportunity if undertaken wisely. It can also be a way to preserve nature in a world in which urbanization seems to be a never-ending process. As the saying goes, they can't build anymore land.

On the right you will find links to Ace Capital Group and Velur --> two companies specializing in Land Banking in So. Cal.