#landbanking

In response to soaring land costs and unpredictable housing demand, major U.S. homebuilders are quietly reviving an old strategy: land banking.

🔍 What is land banking?

Instead of owning land outright, builders partner with private equity firms or landowners who hold the land and sell back development rights when needed. This approach helps builders:

Cut upfront costs

Reduce financial risk

Build more flexibly in uncertain markets

🏘️ With mortgage rates staying high and buyer demand fluctuating, this model gives developers breathing room while keeping future supply pipelines intact.

💡 Land banking isn’t new, but it’s being refined. Firms like Walton Global and Landsea Homes are using it to scale smarter, not riskier.

💬 What’s your take on land banking? Smart strategy or risky bet?

👇 Drop your thoughts in the comments & follow us for more real estate insights and trends shaping tomorrow’s market.

What Is Land Banking and How to Make Profit From It?

Land Banking: Wayne’s Strategic Approach

As a land banking consultant, Wayne Terpend has revolutionized the concept of land investment. Land banking, the practice of investing in undeveloped land with potential for increase in value, has been a focus area for Terpend. His strategic approach in identifying and acquiring such lands has not only yielded high returns for his clients but has also contributed to sustainable development in various regions. Wayne’s vision in land banking extends beyond mere financial gain; he sees it as an opportunity to contribute positively to the community and environment.

wayne terpend

With global inflation reaching a multi-decade high of 9 per cent, over 85 per cent of central banks worldwide have tightened monetary policy and raised interest rates in quick succession to tame inflationary pressures and avoid a recession. According to the United Nations World Economic Situation and Prospects (WESP).

Smart investors are now looking for a more secure form of investment in real estate as a hedge against inflation. Land banking provides a low risk and a low entry barrier compared to other income-producing properties making it a more viable opportunity for investors.

In this article you will get to know:

•What land banking is

•Its advantages

•Its disadvantages

•Factors that contribute to higher ROI potential

•Our conclusion

Let’s proceed…

What Is Land Banking?

Land banking is the process of purchasing and holding undeveloped land with the aim of selling it in the future at a higher price. This strategy is often used by developers, investors, and government agencies to acquire land in strategic locations before it becomes developed and more expensive.

Land banking is one of the oldest and least complex forms of real estate investment which anyone can get started with.

Merits And Demerits Of Land Banking

Land banking can be a viable investment strategy for investors who are looking to purchase and hold onto undeveloped land with the goal of selling it at a higher price in the future. While land banking is typically a long-term investment, it can offer several potential benefits, including:

1. Potential for Appreciation: One of the main advantages of land banking is the potential for appreciation in the value of the land over time. As the population grows and demand for land in strategic locations increases, the value of the land is likely to increase as well.

2. Hedge Against Inflation: Land is a finite resource, and as such, it can serve as a hedge against inflation. As the cost of living increases, the value of land is likely to appreciate as well, protecting investors from inflationary pressures.

3. Lower Maintenance Costs: Compared to other real estate investments, such as rental properties, land banking can offer lower maintenance costs. Since the land is typically undeveloped, there are fewer ongoing costs associated with managing and maintaining the property.

4. Potential for Development: Depending on the location and zoning laws, there may be opportunities to develop the land in the future, further increasing its value potential.

However, land banking is not without risks. Some potential drawbacks of land banking include:

1. Lack of Income: Unlike rental properties, land banking does not generate any income. Investors must be prepared to hold onto the property for an extended period without any income generation.

2. Lack of Liquidity: Land can be difficult to sell quickly, particularly if there are no buyers in the market at the time. As such, investors must be prepared to hold onto the property for a longer period to ensure a profitable sale.

3. Environmental and Regulatory Risks: Depending on the location of the land, there may be potential environmental or regulatory risks that could impact the value of the property.

Factors That Contribute To Higher ROI Potential In Land Banking

The potential ROI for a land banking investment can vary greatly depending on several factors, such as location, size, zoning laws, and development potential. Generally, properties located in high-growth areas with a strong potential for development and increasing demand will offer higher ROI potential.

Some examples of areas that may offer strong potential for land banking investments include growing cities or suburbs with limited land availability, areas experiencing population growth, and regions undergoing significant infrastructure development, such as new highways or airports.

It’s also important to consider the type of development that could be pursued on the land in the future. For instance, properties located in areas where there is strong demand for commercial, industrial, or residential development may offer greater ROI potential than those with limited development potential.

Investors should also consider the cost of acquiring the land and any expenses associated with holding onto it, such as property taxes and maintenance costs, as these can impact the overall ROI.

It’s worth noting that land banking investments are typically long-term and require careful planning and due diligence to ensure success.

In conclusion, while land banking may offer potential benefits such as a hedge against inflation, high ROI opportunities and lower risk compared to income-producing properties, the specific factors that contribute to ROI potential can vary greatly depending on the location, development potential, and cost of acquiring and holding onto the land.

It is important for investors to carefully weigh the risks and benefits before deciding if it is the best form of real estate investment for their particular situation.

If you’re searching for high-yield Land Banking Investment Opportunities, at RealEstate_Moses you get access to exclusive projects with an exit-focused pre-development strategy that offers property maintenance, administration and marketing services in Africa, North America, UAE and Europe.

We saw that the aristocracy and landed gentry own 30% of England, a position that has not changed for centuries, and that they have increased their wealth at expense of the rest of us.

But the aristocracy and landed gentry are not the only ones who own land. Big corporations also own vast tracts of England.

“Multi-million pound corporations with complex structures have purchased the very ground we walk on – and we are only just beginning to discover the damage it is doing to Britain.” (Guy Shrubsole, quoted in the Guardian, 19/04/19)

Big corporations own 18% of England. Topping the list are three privately owned water companies. Since they were privatised in 1989, water companies have issued massive dividends to their shareholders.

 “…payouts in dividends to shareholders of parent companies between 1991 and 2019 amount to £57bn – nearly half the sum they spent on maintaining and improving the country’s pipes and treatment plants in that period."  (Guardian:01/07/22)

Since privatisation, water companies have not built a single new reservoir, have continued to pump raw sewage into our rivers and seas, and have failed to stem the tide of water leaks that blight the system.  Over 70% of these water companies are foreign owned, so that there is no guarantee that the £57 bn paid in dividends since 1991 has remained in this country.

More worrying still, is the fact these dividends are paid out using borrowed money. If these companies were ever to go bust it would be us, the British taxpayer, having to bail them out.

The water companies are only one example of how corporate landownership affects all of us in a negative way. Land banking by construction companies is another problem.

“The big boys of construction are sitting on enough land to build a couple of cities, and their collective stashes have increased by nearly 10 per cent in just a year…This is surely scandalous in the worst decade for house building since the war. From a peak average of 361,885 homes a year in the 1960s, completions have slumped to 154,533 annually. Even when you take council and social housing out of the equation, the number of dwellings built by the private sector has fallen 38 per cent from an annual average of 197,141 in the 1960s to 121,500 in the current decade.” (Bigissue: 30/07/19)

This contraction in house building is known as “pipelining”. In effect the large construction companies deliberately restrict the flow of newly built homes onto the market to maximise their profits. According to Campaign to Protect Rural England, over a ten-year period the biggest house building companies increased their land banks by 20% but actually built 13% fewer homes. Restricted supply means higher house prices, means greater profits for the construction companies at the expense of ordinary working people. The House of Commons Library sums up the problem thus:

“When people are unable to access suitable housing it can result in overcrowding, more young people living with their parents for longer, impaired labour mobility, which makes it harder for businesses to recruit staff, and increased levels of homelessness.” (Commons Library: Tackling the under-supply of housing in England)

More generally, Private Eye, who investigated landownership in England and Wales, found that