Money is invested in many different things but all for the end goal of increasing the value of our hard-earned income.  We invest in stocks or private equities, some in bonds and other mutual funds, others choose to invest in commodities or precious metals, even in artworks.  But how about investing in real property development?

Property development is the process of improving or transforming a real estate property and upon completion will generate revenues for the investor.  This investment property development includes planning, designing, and executing the project to create a new structure or repurpose existing ones.  Development of the property may range from small-scale renovations to large-scale construction projects.  What then are the top benefits of investing in property development?

High Return on Investment (ROI)

A high return on investment which often outperforms the stock market is one of the most compelling reasons to invest in property development.  Though you start from an undervalued property or land, enhancing its value through renovation or construction, and eventually have the property sold or rented at a premium, you still get substantial profit.  

Diversified Income Streams

Multiple income streams become available – lump sum profit from selling the developed property or a steady cash flow from leased units.  If you have mixed-use development, the more you can have layered income from the combination of commercial, residential, and recreational spaces.  

Hedge Against Inflation

As we all know, as inflation rises, so do property values and rental income.  So, your developed property becomes your barrier against inflation, maintaining its purchasing power over time.

Opportunities for Value Addition

You have hands-on control over your investment because you can actively add value to the property by modernising outdated structure or creating innovative design.  

Capital Growth Potential

Property development in urban areas or places undergoing infrastructure expansion are very favorable locations.  Real estate properties usually appreciate value over time, but this appreciation often compounds with their development.

Tax Benefits

Governments encourage real estate investment to stimulate the economy, so, it turns out that this kind of investment is a tax-efficient way to grow your wealth.  As an investor here, you can benefit from various tax incentives and deductions such as depreciation, mortgage interest deductions, and other costs in the property improvements.

Contribution to Community Development

Developing these real properties is an opportunity to positively impact communities.  Your property becomes a force in enhancing the quality of life in the community, giving you deeper fulfillment aside from the financial benefits it brings to you.  

Leverage Opportunities

Since you can control this high-value asset with a relatively small initial outlay and can produce significant returns, banks are inclined to finance them.  Developing the property offers leverage when borrowing capital since it is a tangible asset.

Flexibility in Investment Strategy

Whether your plans are for short-term gains or long-term wealth creation, you can choose the real estate investment type that will suit your financial goals and timelines.

Rising Demand for Real Estate

As the population grows, urbanisation also expands resulting in greater demands for residential, commercial, and industrial spaces.  So, there’s no worry about any market saturation.  

With all these benefits present, don’t delay your plan, invest now in property development.