Welcome to the second part of this article. In the first part, I gave an introduction to Land banking and talked about the pros and cons. If you didn’t read it, you can find it here.
In this article, I will be talking about how to about land banking the right way
Here are the steps
Buy land in emerging neighborhoods- In as much as it's a good to own land in any location, to guarantee your wealth in a shorter period of time , you need to buy land in places where private companies as well as the government are looking to do projects. This will guarantee the urbanization of such places and the quick appreciation of your land.
Buy land from reputable companies- Buying land from families/Omoniles is the best way to buy land cheap. But Omoniles come with a lot of baggage most times and if you don’t have the stomach for that, it’s best to buy from reputable companies. How do you know reputable companies, you may ask. These are companies with identifiable completed projects. Apart from having identifiable projects, these companies don’t hide who their owner is. Once the owner of a real estate company is ‘coded’, It might be safe to state that such company is being dodgy and may cart away with all your cash.
Buy from companies that have plans of developing the estate and have a track record of keeping their clients up to date on the recent development on the land. This is a sign that they are transparent and they are there for the long run and not just short term gains. Again you can find out about this by looking at the past project the company have completed and checking with any investor that has bought from them or with your realtor. Companies that have plan to build within the estate and not only to sell land to investors are always a positive.
Earn residual income on your land- Its good advice to use the land for farming or lease out to farmers or companies that need warehouse site or events (if the estate allows) while you wait so you get returns while your property appreciates.
Perfect your title as soon as you can- You should perfect your title (to a govt consent or CofO) and to your name as this singular act can jack up the price of your property.
Build infrastructure- You can achieve this by building a small flat on your property or even building a fence around your land.
Rinse and repeat- Buy more land in emerging neighborhood and follow the steps.
Notable Land bankers that created wealth
Sir John Jacob Astor is an American who launched his land banking enterprise at a time it was least popular and at his death he had a total net worth of 110 billion making him the 4th richest men in the history of US in 2006. He was one of the early pioneers of land banking.
Razaq Okoya- The founder of Eleganza group started this business early enough when Ikeja, Oregun, Surulere was bush. While the high brow places were Mushin and Ajegunle. He is currently a billionaire in NGN, has expanded his Eleganza brand to the Island.
Stephen Akintayo is a modern day billionaire in NGN that is building wealth using land banking and have used this wealth to acquire many estates and acquire property at the UAE.
So there you have it. If you found value in this article, why not share it to your family and friends that will gain value from it