Hi all,
I wanted to know fellow investors opinions on purchasing in master planned estates for investment purposes.
Obviously estates vary between different developers and there are lots of other factors effecting the performance of a property but assuming you are ticking all the other boxes, is there any notable disadvantage of owning real estate in a planned estate as apposed to purchasing elsewhere? Do you feel there is just as much potential for growth or is it somehow restricted due to buyer perceptions of estate living?
Any opinions on this would be great, master planned developments are popping up everywhere now and it seems the big developers behind them are putting a lot of research into these areas and possibly doing a lot of the leg work for potential investors, however they are of course putting their margin on top of the lot values, does their purchasing power justify this margin or are investors simply paying a premium for convenience and buying above market value?
Would be great to hear what other investors think
Thanks
When you think about the concept behind a master plan estate, it’s clear that there must be some uplift in values going forward to make it worth it from both the developer’s and the early investor’s view point. 30% of those early sales are going to be investors who play this game time in and time out. This is the time you will also find builders building spec homes too because they see how it works first hand.
In a 10 stage subdivision you will often see the purchase land valuations on the stage releases come in a bit short, however we find that by the time of build completion in 5-6 months our clients are getting as much as 7-8% capital growth on their finished valuations. Not a bad outcome?
If the master plan estate is part of a real change in the area this capital growth can go on for many years. In fact we have charted some areas with double digit growth for up to 8 years after purchasing and building in a master plan estate.
At the end of the day it’s all in the Due Diligence. Capital growth precedes cashflow!
Modernity Investing
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