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What Are the Risks Associated With Land Banking

June 12, 2019

Are you planning to go for land banking? If so, then you should learn some of the risks associated with land banking before you go for it.

What is land banking?

Land banking is the process of purchasing the undeveloped small plots of land with the intention of selling it at much higher prices in future when plans for urban development are drawn up or when the land is developed.

Many land banking companies are there in the Australian market offering the best services. However, some of the land banking schemes in Australia has turned out to be frauds.

Have a look at some of the risks associated with land banking:

  • In case, there is difficulty in getting permit, there are chances that the plans to develop the land may be wrecked.
  • If there are no buyers to buy your property, then getting out of such investments becomes difficult.
  • The individual participants in the land banking process may not be having control over the price.
  • If the plans halt, your money could be unavailable for a longer time than expected.
  • As the land sold is usually overseas, you will be exposed to foreign exchange risks.

These are some of the risks associated with land banking, which you should consider while going for it.

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