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Where to Land Bank?

Discussion in 'Where to Buy' started by Inov8ive, 31st Jul, 2016.

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Do you or would you land bank as part of your investment strategy?

  1. Yes, land (only) is a small component of my portfolio

    1 vote(s)
    6.7%
  2. Yes, land (only) is a significant component of my portfolio

    0 vote(s)
    0.0%
  3. No land (only) in my portfolio but I would consider if holding costs were manageable

    1 vote(s)
    6.7%
  4. Only if it had a dwelling on it with a decent return

    11 vote(s)
    73.3%
  5. No way Jose- I need to see a calculated return

    2 vote(s)
    13.3%
  1. Inov8ive

    Inov8ive Well-Known Member

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    There are many downsides to land banking which most of us understand quite well. Obviously not receiving rent is a biggie. I have an opportunity to purchase a nice piece of land in a growing area with a strong possibility for both CG and rezoning. It will be a little hard to hold for 5 years, but I am sure the returns will be strong so I am a bit perplexed. It is not part of my strategy, but I want to know if anyone else does this as part of their strategy?
     
  2. Bran

    Bran Well-Known Member

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    Don't forget you won't be able to claim any deductions whilst you hold it - it's not bringing in an income, nothing is tax deductible. For that reason, I'd like some sort of dwelling on it.
     
  3. MTR

    MTR Well-Known Member Premium Member

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    land banking can also include buying with house on land and potential for rezoning or deve site, makes sense - income?
    if the property has potential for rezoning beware that the timeframe is in no way certain, 5 years could be 10 years, we are talking government/council, red tape, could totally blow out, or worse, not happen
     
  4. Inov8ive

    Inov8ive Well-Known Member

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    Yes that's an important point the 5 years could easily turn into 10, there are a lot of unknowns which is why I wonder if any of the investors on PC land bank as part of their strategy.
     
  5. Bran

    Bran Well-Known Member

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    Yep. Mine are all landbanking with the view to developing later. Whenever that turns out to be. All about 4.5 - 5% yield though.
     
  6. Inov8ive

    Inov8ive Well-Known Member

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    They're pretty solid returns on development blocks