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Hawaii Land Banking – A Growing Trend To High-Yield Profits

The story is familiar: the housing market crashes, the economy recesses, people get nervous. The possibility of losing what one has spent so much time and effort achieving not only causes a ubiquitous fear, but also desperately calls for innovation. And as with most all innovation — whether tangible or theoretical — the result is driven by need, for something better, or just different.

Whether it’s the Wright Brother’s need to fly, a Harvard student’s need to revolutionize social communication, or an economy’s need to right itself, the best ideas and the brightest innovations are those that spring from a source of not only need, but creativity. While innovators are thinking outside the box, they’re simultaneously creating the next box…just ask Bob Dylan.

Land Banking Is Not A New Idea

Land Banking is not new, nobody’s reinventing the wheel here. People have been investing in land and watching its value grow since long before the U.S. economy was even a notion on the minds of this country’s founders. And to be honest, land banking isn’t the best idea for everybody at this stage, because the most crucial factor in the return of said investment is the commodity itself, the land.

Not just any and all land is a wise investment, but the right land, in the right location, at the right time, may very well be the newest depository for the wealth of the world’s affluent. With current real estate demand just starting to rebound, and properties demanding a higher return, one could easily argue that right now is as right a time as we may see for years to come to invest in a tangible asset like land.

One of two waterfalls at the Valley House Estate; land well worth the investment

Here in Hawaii we have what any and all real estate investors would hope for — demand. There are few places one can live a healthy life of surfing, hiking, kayaking, and perpetually basking in a cozy tropical climate, with a relatively small surrounding population, without earning another stamp on the old passport.

Moreover, the direction Hawaii’s sustainability initiatives are headed can very well lead one to surmise that in as short as 10 or 20 years the Islands will be at the international forefront of sustainability and economic self-sufficiency, with new development already starting to reflect the future. Combine that with verdant hillsides, lustful views, and the big blue Pacific Ocean in every direction and what we get is a supreme demand for a slice of the life we who already live here know so well.

It's a lot prettier than an investment portfolio – a bright morning's view from the Valley House

With Hawaii’s rich volcanic soil, varied topography, and predictable climates, agricultural land banking and the opportunity for growth (literally) is another form of investment the Islands offer. Whether it’s mass-producing sugar, coffee or pineapples, or just getting the opportunity to eat what one grows themselves, the demand for land is there and both wide-open spaces and personal plots are ‘ripe for the picking’, just ask Larry Ellison.

This 125 year old bridge leading into the Valley House Estate has a past that's known, and a future to be determined

As anybody who took Economy 101 knows, all of these ingredients equate to a key element of a good investment — security. Desire for a Hawaii life (wink, wink) is not something that wanes. And if somebody wants something and they have the means, time has proven they will most likely find a way to get it. While the current and coming generations of affluence search for a bigger piece of the privileged pie, it is likely that our cliffs, hillsides, and beaches will sufficiently satiate their desire.

Placing capital in the hands of a tangible asset like land — especially land in Hawaii — is simply a great investment.

Aloha,
Roni

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