How to Add Value Through Land, Renovation, and Redevelopment

PDS 02 How to find your first deal?
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6 Property Development Strategies Every Investor Should Know

:house_with_garden: Understanding Property Development – Every property investment strategy aims to add value and manufacture growth. All such strategies fall under the umbrella of property development.

:key: Six Main Development Strategies

  1. Land Banking – Buying unimproved land and either holding it for appreciation or securing permits based on market demand.
  2. Land Packaging – Adding value through rezoning, permits, or subdivision before selling.
  3. Land & Building Development – Going all the way from land purchase to full construction.
  4. Building Operations – Managing or selling ownership/management rights.
  5. Building Renovation – Purchasing run-down properties, making cosmetic improvements, and reselling for profit.
  6. Property Redevelopment – Transforming commercial/industrial buildings into residential spaces or maximizing land use by demolishing and rebuilding.

:building_construction: The Four Must-Haves of Property Development

  • Land – The raw material needed for projects.
  • Labor – The human effort required to build and develop.
  • Capital – Funds to purchase land and equipment.
  • Entrepreneurship – The business mindset required to bring together all elements successfully.

Key Exit Strategies

  • Land Banking – Hold land and wait for appreciation.
  • Land Packaging – Sell as soon as zoning or permits are approved.
  • Land & Building Development – Decide whether to proceed with construction or sell the project.
  • Building Operations – Generate income by selling, leasing, or managing properties.
  • Building Renovation – Improve properties for resale or rental.
  • Property Redevelopment – Used less frequently due to long project timelines.

:bar_chart: Essential Numbers for Profitability

  • Understanding land value, costs, and profit is key.
  • Formula: Land Value = Revenue - (All Costs + Profit).
  • Knowing these numbers enables no-money-down deals, better negotiations, and risk mitigation.

Insights Based on Numbers

  • :chart_with_upwards_trend: Understanding Market Trends – Market research is crucial for predicting demand and infrastructure spending.
  • :office: Profitability Calculation – The land value must be carefully calculated using development cost projections to avoid financial losses.
  • :moneybag: Maximizing Returns – Developers must know the maximum price they can pay while ensuring a profitable exit.