Property Investment Solutions | Mollard Property Group
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PROPERTY INVESTMENT SOLUTIONS ACROSS SOCIAL INFRASTRUCTURE

A one-stop property development solution.

THE ART OF INVESTING IN PROPERTY

A Critical Question

In 2019 there is a better solution to create wealth in property than buying a residential or commercial property, or an apartment off the plan.

In property investment the first consideration by experienced investors is, safety, then return. This investment structure concentrates on a safe solution to create vastly better returns in property investment utilising 40 years of hands on experience, as our practical guide. It is not what you know but rather what you do not know, that trips you up. To maximise income and capital growth in property is complex, a depth of knowledge and understanding only comes about through real time experience over many years.

The Cold Hard Truth

Let us examine the facts. Every new residential apartment or townhouse development starts with the ability of the developer to obtain finance to build the project. The bottom-line, there are risks in development which need to be accounted for, therefore there must be a large enough profit margin built in, to ensure the financier does not end up carrying the liability should costs or time blowout, or sales revenue decline.

In simple language the buyer pays for this margin, it is built into the purchase price of each apartment.

The minimum profit margin the bank needs to see before lending money to the developer is 20%. On top of that, the developer needs to pay 10% GST and 2% sale commission. This means that a $750,000 apartment is inclusive of $240,000 developer profit margin, GST and sale commission. Therefore, the real underlying asset value of the apartment is only $510,000.

This demonstrates the investor actually pays $750,000 to get $510,000 of real underlying asset value.

Mollard Property Group have worked through this dilemma and found a quality solution that will generate significantly more profit and long-term income in a safe investment environment.

Every investor knows to make money you need leverage, the larger the lever the greater the return. However, the deal breaker for many investors to maximise the significant benefits of leverage is the inherent risk that it creates. After 40 years specialising in property development, our observations clearly show there are risks at every turn and it takes many years to fully understand these risks and where they come from.

The Four Key Risks of Development

  • Construction
  • Time Blowout
  • Sales
  • Finance

After considering these risks up close, we have developed a plan and a structure that will demonstrate how these risks can be substantially negated allowing an investor to utilise leverage safely and provide significantly more profit and income than the traditional form of residential investment.

There is Safety in Numbers

The financial table below demonstrates in simple terms what we are suggesting. Pulling the right people together creates power and the opportunity to participate at a greater level.

There is a myriad of considerations that need all the boxes to line up, along with thoughtful consideration to potential conflict and an emergency exit. However, as you will see getting this right, in the right structure, with the right concept, using even the most conservative projections, results in significantly improved returns.

Social Infrastructure is a great place to put your investment dollars. Build-to-Rent and Childcare are great examples of sectors that government are very keen to support. For example, government provides subsidies up to 85% of the cost of childcare. This sector has changed significantly over the past 7 years and will continue to grow with the increasing number of women going back into the workforce and our rapidly growing population, generally with younger professionals and young families. In addition, Early Learning education is becoming not just a luxury but a necessity.

Build-to-Rent is also a fast-emerging sector as accommodation requirements have changed forever. This new concept for accommodation will hit Australia just like the inner-city apartment wave that struck in the early 1990’s. Based on what has occurred in the UK this will be a new, sustainable and exciting long-term opportunity.

We can show the most conservative financial minds how this investment can achieve impressive results over traditional residential investment.

Not only does the visual impact of high quality design benefit all those who live in the community, we believe this is most important for capital growth and income.

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