Getting started in property development can be daunting, but reaping the rewards of this competitive investment strategy can make it worthwhile.
“Building a property portfolio should be fun and exciting and if you do it the right way, you can get access to huge, equity gains, huge cash flow benefits as well as huge tax deductions,” explains Drew Evans, director of Caifu Property.
Setting yourself up to be able to develop property involves manoeuvring into a position where your money is working hard for you, instead of the other way around – in addition to not exchanging your time for monetary gains.
Setting yourself up in these ways makes the transition into real estate development relatively painless, by ensuring your financial and lifestyle capacities are not over-extended.
Now, property developing can take on many forms: you can subdivide a large block and on-sell the vacant land, or develop more properties on the land, or knock down an existing home and build new.
You may even decice to take on an ambitious project, where you construct several apartments on the land once you’ve bulldozed the existing dwelling.
At the very beginning, if you are able to buy under market value, and then add value through small-scale developments, you will be on the right track.
However, before you start, you need to know where you want to end up. For some investors, it’s about creating the opportunity to sell that property at the end and enjoy the profits. Others prefer to hold onto the properties and refinance it again at the end, to keep rolling and moving forward on future deals.
Are you interested in learning about property development? Watch our full interview outlining how to navigate the competitive property development game with Drew Evans and Your Investment Property editor Sarah Megginson.