13 Jul Property Development: An Increasingly Popular Wealth Strategy
When it comes to creating large financial gains from real estate, one strategy stands head and shoulders above all others – property development.
However, those two words – property development – conjure up a whole range of images and questions in people’s minds. Could I do it? What exactly is it? How much money do I need?
What are the risks? And the overriding question – how do I get started? Property development in simple terms is the process of improving the value of land. And this can be achieved without ever building anything.
For example, take the simplest type of property development – a one-into-two-lot subdivision. Improving the value of the land can be undertaken in stages. Firstly, obtaining a development permit adds value to the land.
Secondly, subdividing the land into two separate lots adds even more value. Adding houses to the lots could create even more value. At any stage the land can be sold at a profit, but the maximum profi t is made by going all the way.
The beauty of property development is the flexibility of being able to sell some of the fi nished product and hold some as a long-term investment.
To obtain true wealth, and the financial freedom and lifestyle that come as a result, requires both cash flow and an expanding property portfolio.
“Property development’s rewards are great, but mistakes can be costly. The biggest mistake is not getting educated before you start”
Cash flow is derived from the profit made when the finished product is sold. Long-term wealth is created by holding the fi nished product. Because developers create their investments at absolute raw cost, they can build a cash flow positive property portfolio very fast.
Property development is no longer the secret wealthcreating powerhouse of the wealthy few. The power of the internet combined with the education revolution has brought property development success within reach of the everyday investor.
Many property developers are now everyday people, and age, lack of formal education, ethnic background and gender are no bar to success. Even a lack of money is no barrier, with a range of creative strategies available requiring little or no money from the developer.
Property developers these days are unrecognisable. Your neighbour, hairdresser, bus driver or work colleague could in fact be a budding developer.
But with the likelihood of making several times their full-time wage working a ‘short week’, the day job might soon lose its appeal.
A passion for property, determination and a willingness to invest in yourself through a proven property development program are the key to success.
Property development’s rewards are great, but mistakes can be costly. The biggest mistake is not getting educated before you start.
In your search for a suitable property development course, look for an educator who has developed through several property cycles, is currently developing, has developed varying types of projects of a high dollar value, and has a proven history of educating successful developers.
is the founder and
managing director of
Property Mastermind, with
32 years of experience and
more than $1bn in property