Property development has been a successful investment model for decades. With record-breaking results reported in capital cities across Australia, many investors are using Australian property to become financially independent.

Buy & Hold vs. Development


Investing in Property

While lucrative, there are several factors involved with purchasing a property as an investment that may interfere with your first time property investing. It’s also important to distinguish between gross capital gains and the final net return – property has ongoing costs that reduce final profitability.

1. High barrier to entry

Firstly, buying a property has a high barrier to entry in the form of the purchase price. Buying even a cheap home will require a deposit of over $50,000 plus another $450,000 or more in finance from a lender, which will require ongoing interest payments. In addition, there are also the ongoing expenses of owning a property such as maintenance, body corporate, and/or land tax, which will affect cash flow unless the property is positively geared.

2. Needs extensive research

Secondly, the performance of an investment property is solely influenced by the market, which means that for a property to be a successful investment it requires extensive research to choose a suitable property.


Investing in Property Developments

What many investors do not realise is that there is another investment option available that allows them to capitalise on the excellent performance of Australian property: property development. Investing a property development project can provide the benefits of an investment property (chiefly a high ROI) while overcoming these factors.  

1. No hidden costs

Investing in a property development requires more funds upfront ($250,000), but doesn’t have any ongoing expenses or hidden costs that chip away at your cash flow.

2. Not dependent on market performance

While the performance of a property development is affected by market performance, it isn’t dependent upon it. As long as the combined sales price of the developed properties is higher than the cost to build them, we still achieve a profit. There are a variety of factors other than final sales price that also influence how much profit a particular development will generate. This allows investors to achieve a profit from the lucrative property market without being completely dependent on the performance of the market.

First Time Property Investing?

Here is an overview of the main benefits of investing in a property development project.

first time property investing


Lucrative property markets mean that property developments can achieve an internal rate of return (IRR) in excess of 40% on equity.


Investor’s capital is secured against a tangible asset: the development site itself.


A variety of distinct property markets and property types allow for a diversified investment portfolio.


The total value of Australian residential property is nearly $7 trillion.

What's the best investment option for you?

Investing in a property development is an alternative first time property investing opportunity that may allow you to harness the performance of Australian property if you are unable to purchase a property of your own.

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