The 2 purposes for property development – equity or profit?
When considering your first or next property development, it’s helpful to start with the end goal in mind. Are you developing for equity or developing for profit?
What is developing for equity?
The primary goal when developing for equity is to retain profit. Part of this wealth strategy is retaining the property itself to generate future income. This can come in the form of further growth in equity as the property increases in value over time as well as being an asset that generates rental income.
Could this be an alternative to traditional investment strategies?
Property is also a liquid asset that provide flexibility to transfer your wealth to your family.
What is developing for profit?
Developing for profit is simply about generating income. It creates another source of, or is a top-up income to your existing income without costing you more time. The way for it to not cost you more time is to work with a builder who is also a developer, they have the experience to guide you in the process of property development to best help you maximise your return.
The process of property development itself is complex with lots of factors and key decisions that come into play at every step. These decisions include location, design, contractors, valuer, finance… many variables that all have a direct impact on the profitability of the project. It takes experience to develop the astute decision making that maximises the return on investment when developing for profit. When you are working with someone who is a builder AND a developer, they handle these decisions for you, making the process an easy, enjoyable and profitable one.
- Asset that’s flexible to liquidate
- Potential to appreciate in value
- Generate rental income
- You are not trading time for money
- Wealth generation
- It’s immediate income, either a portion of your income or you may choose to develop regularly
- No (or very little) time taken out of your working day
- Leverage your time
- Top up or double your income
- Wealth generation
- Build another skill set, when you know how to develop property and with the help of who, you can continue to build on this with future developments
Who is property development for?
With each development people have slightly different reasons for getting started however the key reason is to work less hours and make the same amount of money or work less hours and make more money! By pursuing property development whether it be for equity or profit, you are generating another form of income and leveraging your time.
We all want more time to enjoy life right? In my experience, property development is generally for people who;
- want to work less hours and make the same amount of money, or more!
- want to ease into an income generating retirement plan
- are professionals who are looking for alternative investment and income strategies that don’t require trading time for money
- want to manage their own wealth rather than using a financial adviser or manager
- take control of their financial future
There are many options for property development whether the purpose be for equity or profit. In my experience multi-apartments provide the best opportunity for maximising your return on investment. View our project showcase. If you’d like to have a chat about what property development could mean for you, I’m more than happy to discuss.