There are a lot of wealth creation strategies through property out there. But why property development? Australia’s Billion Dollar Property Developer, Bob Andersen, explains.

In the first installment of the Australian Property Development Series, I’ve given you an overview about what property development is and clarified some misconceptions you may have about it. In this installment, I’m going to take you through the reasons people want to get involved in property development.

The one thing that holds of all these reasons together is flexibility. There’s so much flexibility in property development and you’ll find out about it below.

PEOPLE WANT TO GENERATE CASHFLOW

Did you know that building cashflow and wealth can both be done even in a single property development project? Think about it this way. We need cashflow, don’t we? We need cashflow for basic commodities. You might have a mortgage, you might be paying rent, you might be paying your car off, you might have kids, they may have school fees – all that sort of stuff. We need basic commodities.

But you know, because of the amount of money you can make in property development, you can go way beyond those basic needs. If you’ve got money, you’ve got power. You’ve got control and cashflow.

PEOPLE WANT TO BUILD WEALTH IN THE LONG RUN

You’d also want to be building wealth over time. You want to build up assets. You want to build up a whole portfolio of properties so that you can get to a point where those properties are actually passively feeding cashflow to you. How do you do that with property development?

Let’s say that you wanted to develop three townhouses. When development is completed, you can sell or keep them. But you’ve got more flexibility in that. You might want to keep one and sell two or keep two sell one. There’s quite a few combinations even only on three townhouses.

PEOPLE WANT TO EARN EXTRA CASH

When you develop a property and sell it, you make a cash profit after taxes. That’s cashflow. That puts cash into your pockets. What do you do with the cash? Well, whatever you like. Excess cash gives you lifestyle. Whatever that is for you, you need cash to do it.

PEOPLE WANT LONG-TERM CAPITAL GROWTH

What about long-term growth? You need to own property. You need to have property rented out and you need to hold it for long term-capital growth. That’s how you build property capital. That’s how you build great wealth. Now, how do you do that? You simply keep some of what you develop. You can sell some for cash, some for cashflow, or some for long-term capital growth.

This is the beauty of property development. This is the flexibility. It’s great flexibility.

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