Landbanking In Malaysia

Land Banking is defined as the practice of acquiring large tracts of undeveloped land and keeping it pressed until the time is right for future development. Traditional Land Banking involves holding a piece of raw land as close as possible to the development path and wait a few years. When there is demand for your land because of development approaches, your piece of land will increase in value ten times or more. However, Land Banking requires much patience and investors may continue to wait indefinitely. The cost to keep the clay can also be paralyzing.

However, investment Land Banking can be a good investment given the right position, competence and adequate holding power. Many have built their wealth on investment banking territory ranging from the likes of Donald Trump in the U.S. for Li Ka-shing of Hong Kong. For average investors, however, 3 major obstacles prevent us from participating in this part of lucrative real estate investments. Are lack of capital to purchase large tracts of land, lack of holding power and lack of know-how to get approvals for proper planning.

In Malaysia, an article appeared in Land Banking Investment financial magazine "Personal Money" published by The Edge April 2004 and this means a growing awareness of a new breed of professional societies Land Banking. These companies purchase large tracts of land in the path of development and its unions for the investors, who then have an undivided interest in the country. At 100 acres of land for example, could be divided into smaller units of 1/2 acres each, making it convenient for investors to purchase a single unit of investment. They also act as management company of investment land management. Their services include the submission of concept plans to the authorities for appropriate planning permission and tenders which are from developers who are interested in acquiring your plot of land in common for all investors.

Investors make their profit by selling their land to the developer at a price appreciated. Lands that have gained planning approvals take a premium price from developers. The decision to accept any offer by the developer will be done through a voting process that involves all common investors. Many Malaysian investors have realized the profits from these lucrative investment programs and the number of investors have continued to increase.