Ensuring a High Return Investment
To deliver a high return investment to our Investors, and remain viable as a business, it is paramount that each of our Property Developments is profitable. This is why all our Development projects undergo comprehensive feasibility studies as the first step.
The first thing we do for any potential Development is create a preliminary plan for how the land will be used. How many properties can fit on the land? What price can we expect for each property? We use these figures to create an estimate for the total income that the project will achieve. We may experiment with different layouts and property types to achieve a higher income.
For example, we find a plot of land that can fit six townhouses. Based on area pricing, we can expect each townhouse to sell for approximately $650,000. From that, we can expect a total income of $3,900,000.
Next, we calculate all the likely expenses that are necessary to complete the Development. This includes costs for land purchase, land transfer, conveyancing, taxes, development management, consultants, loan interest, and construction. When calculating expenses, we use conservative estimates to reduce risk. We also include a contingency in the budget of 2-5% of total costs, depending on the degree of uncertainty within the project. This is also a risk-reduction measure to avoid going over-budget.
Let’s assume that the expenses of a six-townhouse development are $3,000,000. So we estimate that this hypothetical development will cost $3,000,000 but will deliver $3,900,000 in income. This is a profit increase of 30%, which means that this is a project worthy of further investigation.
Each of our Property Developments undergo this process to ensure that we only offer a high return investment to our clients. You can find the feasibility report on each of our high return investment projects by reading the Information Memorandum.
The Information Memorandum allows investors looking for a high return investment model to examine the finances behind the project and make an informed decision.
Our high return investment Developments typically offer returns of 30-40% over 24 months. We also structure our Developments so that investors own a share of the land. This secures each investor’s contribution against the land and offers investment security.
This combination of high returns and security is why we have a community of over 120 active investors and tens of millions under management.