On average, real estate continually out-performs almost all other investments and is strengthened further by its long-term value, secured by physical assets. Unlike other investments common to the stock market, real estate most often is not subject to wide fluctuations and market volatility. Therefore, as an asset class, real estate has continuously proven to be more stable than stocks or bonds and when managed properly, regularly provides a substantial annual return.
Land banking is the concept upon which land syndications are based. Land banking capitalizes on growth trends in population and refers to the ‘banking’ of money in idle lands awaiting upcoming residential, commercial and/or industrial development.
When investing in private real estate syndications, individuals are pooling their capital together for the purpose of investing in larger and more lucrative real estate projects. This provides investors the opportunity to own property that would otherwise be out of reach financially.
Real estate syndicates own residential and/or commercial real estate and are secured by owning title to the land, in turn, providing added security for the investment, with no liability for debt.
Land Banking offers an investor with limited investment capital the opportunity to get involved and be party to the benefits of owning real estate. Through this investment opportunity individuals are able to completely divorce themselves from the tasks of locating, analyzing, purchasing and managing your real estate investment.
Key Highlights
- Access to exclusive investments for modest capital
-
Stability and capital preservation
-
RSP and RIF eligible
-
Investment diversification
-
Liquidity options available
-
Tax efficient investment
The following graph details the life cycle of land and exemplifies the potential success of land banking. It starts in its raw form as farmland and carries through to the development stage where homes or businesses are ready to be built. Value is added to the property through the planning and approval process that occurs after land has been annexed into a town or city’s jurisdiction. Successful land banking starts in the early stages and works through the planning process to add substantial value to the property.
