The terms ‘developer’ and ‘investor’ are often heard within the real estate industry. Property investment refers to the purchase of either residential or commercial premises specifically with the aim of financial return. Whereas property development is more complex. A property developer will purchase a block of land, build the maximum allowable number of townhouses, units or apartments on the property and sell them for profit once construction is complete, but which is better of the two?
Investing is an attractive solution to those wanting to earn a large sum of money. It can generate larger returns than more traditional forms of investing such as in stocks or bonds. Investment is done either for the rental gains or the capital growth which can occur through rising property prices. In the UK, property prices have on average doubled every 6-9 years over the last 60 years. Prior to purchasing a property, the investor will undertake a significant amount of research ensuring the property location, price point and the premises itself are going to offer a good return on investment.
Within development it is a quick turn around often as developers have a strong network with builders, conveyances, real estate agents and legal experts. Experienced developers often suggest trying investment before development. Overseeing the design, approval, financing and build of a new property will allow potential developers to understand the various stages, potential costs and possible hurdles along the way. With success in development comes experience.
Both property investors and property developers have the potential to earn significant returns on investments. The best chance of success lies with those who undertake the required research, as well as built strong, relevant networks and have a sound understanding of the process.