THIS IS NOT A LAND BANKING WEBSITE. This is an educational tool which will reveal the opportunities and pitfalls in Land Investment.
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Land Development
Do the numbers stack up?
The attraction of land 'change of use' (another term for ‘reallocation’, which is a key stage in the path to detailed planning permission) lies, of course, in the significant returns on offer.
Indeed, the most profitable part of the entire development/property cycle is at the change of use stage.
Property investors may have prospered in recent times, but it is land change of use which is structurally superior for an investor (because a greater proportion of the total project value lies in the land).
(See the graph below)
Returns of 400 or 500% in a medium term time frame (e.g. 4 or 5 years) are entirely possible, but investors should demand more than simply these numbers being quoted on the phone or in corporate literature.
They should ask to see a clear breakdown of the financials involved, in order to ascertain exactly where and how those returns will be generated.