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Massive profits through development syndicates

Tuesday, 7th Jul 2015

growth 3Property investors are cashing in on development opportunities following changes to Western Australia’s town planning laws.

The revised regulations, which have been driven at both the state and local government level, have led to a significant increase in property development opportunities in the Perth metropolitan area.

For example, many sites previously only suitable for villa and townhouse style developments can now be developed into small boutique apartments complexes.

Typically, these types of developments can contain 6 to 40 units across 2 or 3 storeys.

This higher lot yield has significantly increased the profitability of these specific sites.

In the past, these types of developments have usually been out of reach of the average property investor because of the huge upfront capital requirement.

However, with the advent of development syndicates, in which a group of investors pool their funds, more people can gain exposure to the huge profits that these types of projects offer.

Momentum Wealth’s development syndicate in Carine, just 12 kilometres north of the Perth CBD, is a great example of this.

This development was launched after Momentum Wealth clients invested $4 million into the acquisition of three development sites.

The result was a development of 16 apartments and three townhouses with a price range of between low $500,000’s to $1 million plus.

Most investors would not have the financial capacity, or know-how, to complete a project of this scale on their own.

However, the syndicate allowed them to pool their capital to access a high-return development opportunity. Furthermore, with Momentum Wealth project managing the entire development, the clients haven’t had to lift a finger.

Demand for these types of boutique apartment complexes in Perth is expected to increase in the coming years as many retirees want to downsize but remain in their local area, rather than move to an apartment in the Perth CBD.

The Carine development syndicate, for example, has been designed to a very high specification to cater for the ‘empty nester’ market. The project is also located in a highly desirable area close to the beach, bushlands and vibrant activity centres with café strips and retail precincts nearby.

 

Please note: Momentum Wealth and its affiliated entities are not accountants or financial planners. If you are investing in any syndicate you should read the prospectus / information memorandum and seek your own independent financial advice.