The real estate industry is one of the booming sectors of the economy globally. The sector contributes up to between 3 and 5 percent of the global GDP on average. A close evaluation of the real estate industry and property development sector, in general, reveals a general rising trend characterized by increased stability. Combined, these factors, among others, make property development one of the most lucrative areas of investment that an investor should focus on. Here are some of the additional benefits of investing in property development in the market today.
The property development sector is, in general, highly powerful in terms of the net worth invested in the sector in different markets globally. In addition to the high investment rates, property development is generally stable as compared to other sectors of investment that rival the industry. Such high stability implies that the prospects of making losses as a result of potential collapses and heavy price fluctuations are significantly diminished.
Different real estate markets offer different tax benefits that generally profit property developers. Some governments offer the negative gearing taxation benefit. This perk is where the government offers a reprieve on your investments and incomes from real estate properties, especially in cases where the investor is still servicing loans associated with real estate property developments.
Property development is characterized by a general appreciation in value. This value implies that investing in the sector generally helps to rapidly advance and build the investor’s portfolio as properties appreciate. Besides, a property developer has the option of adding value to the properties by taking steps such as renovating and making additional developments on existing properties. Such developments and renovations help prevent depreciation while generally increasing the properties’ worth and income.
Hedging against inflation
Inflation is one of the vicious forces that most investors are afraid of in the industry. Investing in property development gives one an opportunity to appropriately and effectively tame such inflation. This benefit is because, as inflation increases, income from real estate properties also tends to go up. This rise helps cushion the real estate properties from experiencing a depreciated value and net income. Comparatively, other sectors of business such as e-commerce may be adversely affected by inflation in ways that property development does not suffer.