Land is scarce by nature and is the perfect store of value.
Income from the use of land usually keeps pace with inflation, as does the value of the land as urbanization sets in.
Purchasing land not currently needed but, for future development is a totally different story though.
Yet, this is exactly what land banking is all about.
Although similar, in logic, to the purchase of undervalued stocks, investment in undeveloped land brings with it quite a few question marks.
As it is usually not transacted over a regulated exchange or an established platform and thus ownership will always be an issue.
To add to the complexity, the land is usually located overseas where land ownership laws might not be clear and transfer of titles a complicated matter.
In recent years, there has been news about land banking companies scamming their customers.
This is specifically prevalent on companies offering land from the UK and Canada.
How a legitimate wealth generating investment can be sidelined as a scam is due to certain "bad hats" and their dubious practices in the market.
These can be summarized as:

• No development can take place as a result of the land being purchased is to be preserved as a heritage site.
  
• Land banking company is not the owner of the land.
  
• Land prone to flooding.
  
• Unrealistic timeframes given to investors.
  
• Investors did not receive the title deeds.
  

An investor willing to part with his money based on some promises of returns is either from a land where money as a medium of exchange is unheard of or he is insane! It is common sense that homework must be done before a project can be undertaken or a purchase made.
This is even more so for big-ticket items.
Institutional investors call it due diligence and the common folks, research.
It is very important to make proper evaluation about the real estate and its future prospects.
Regardless of residential and/or commercial real estate, assessment of future benefits must be professionally done, and not be based on a few promises.
So, get real.
If it is that easy to get rich, we will all be millionaires! Investing in land abroad is a geographical diversification similar to purchasing stocks in foreign stock exchange.
In the same way that investors in the stock market diversify their investment portfolios by investing in foreign stock markets.
Investors who invest in properties may choose to diversify their investment portfolios abroad where the opportunity presents itself.
The difference is in the integrity of the company marketing the land and it is important to separate the wheat from the chaff.
A couple of points to consider checking before deciding on land banking investment:

• The company should have experts employed to select land that is adjacent to infrastructure, free from encumbrances, and meeting the requirements of the Environmental Impact Assessment.
  
• The land selected is purchased and owned by the company before being marketed to investors.
  

Land is a long-term source of wealth generation.
It is no different from the condominiums and private housings bought in the real estate market to be sold at higher prices.
Like these real estate, ownership must be proven before any sale can take place.
That is where the title deed comes in.
Can land, then, be featured in an investment portfolio? There is no reason for it not to be so as long as the market is transparent enough, liquid enough, and the risk to be borne palatable enough.
After all, isn't this what investment is all about? With all the bad press mentioned earlier, land banking is still a flourishing business though.
Investors who will avoid investment ideas from financial advisors are more than willing to throw in "thousands of dollars" in land banking.
The investor has to be clear that investment in land is hinged upon deferred gratification.
Returns are not realized over a few days, weeks or months.
This medium to long-term investment presents investors with the opportunity to set aside relatively small sums for wealth generation.
When realized, this investment can produce gains that exceed the typical gains on the stock market.
Hope that you enjoy this article and find it informative.