Property Development for Beginners.

Don't know what property development is, or how you can invest in one? Start here.

Answering the question”What is property development?” will teach you a basic understanding of how property developments work and how you can invest in one.

What is property development?

At the most basic level, the objective of a property development is to take an existing property and turn it into a better one, with a bigger price tag.

A property developer is not the same thing as a builder. A property developer manages all of the parties who work on a project, from builders, architects, engineers, and realtors.

It’s the property developer’s job to manage all of these parties and make sure that they’re all working together to design, obtain approval for, build, and sell the new properties.

How is developing different from property investing?

Traditional property investing is like buying a gold bar, waiting for the market to drive the price of gold up, and then selling the same gold bar for a profit. (This strategy is known as a speculative investment: you are ‘speculating’ that the market will go up.)

On the other hand, real estate development is more like transforming that gold bar into jewellery: you are changing the original asset into something new, with a higher value. Yes, the value of the final product will still be affected by the market value of gold, but you have more direct control over your profitability by transforming the asset.

The transformative nature of property development is what gives it the potential to outperform traditional buy-and-hold property investment strategies.

We have a Process Guide which explains the steps involved in property development in detail.

How does someone invest in a development project?

There are a variety of legal structures that can be used to allow individuals, corporations, trusts, and SMSFs to invest into property development projects.

We generally use a Joint Venture structure for our offerings. The development site is purchased by a Special Purpose Vehicle (SPV) company, and investors receive shares in the SPV. These shares provide investors with certain entitlements to the SPV’s assets and revenues, which form investor returns.

The SPV then enters into a Joint Venture agreement with Lion to undertake and oversee the development on behalf of the SPV and its investors.

View a specific offer for more information about its legal structure. ∎

In providing this information, we have not taken into account the recipient’s objectives, financial situation or needs and accordingly the information contained on this page does not constitute personal advice for the purposes of section 766B(3) (“personal advice”) of the Corporations Act. While all reasonable care has been taken in the preparation of this article, we accept no liability for any direct or indirect loss or damage as a result of reliance upon this article.

Always consult an expert before making investment decisions or property purchasing decisions.

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  • 12% per annum return
  • Distributions paid monthly
  • Capital secured against real estate
  • Bonus profit share upon completion
  • Targeted 36 month term
  • Pro rata returns if delayed