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Okay let's get an understanding of why we should be developing property and why as an investor you should now look at becoming a property developer so let's look at a few things number one very obvious is profit MMM when you develop your own project you end up with townhouses or apartments at cost, and I'll explain that to you in an example a little later which you can either sell in the market for instant cash profit or you can decide to keep the profit in your property, or you can have a mix of both, so the number one reason nonetheless is profit that's why we do everything that's why we do business and property development is not business every little deal is actually a business venture deposit, and you can use your profit or your equity as a deposit for your next investment property or your next deal because you generated all this equity in your project, and you're holding it down, so we're not actually even selling it you can use that extra equity as a deposit for your next for your next venture or your next investment property capital gain the moment you develop there's instant capital gain as you just you know well because you've actually got it lower than the market there is instant capital gain when you do when you do property development rental yield your total cost of the development for your unit will always be less than the market value which gives you higher rental yield now there could be somebody else who's bought the house right next to yours, and they paid full retail let's say seven hundred thousand but you on the other hand only paid five hundred and fifty thousand, so the rental yield is exactly the same because he's got a four-bedroom house, and maybe you've got a four-bedroom house and you both can rent it out, and you get the exact same rent however because you've got it at a low right your rental yield is always going to be higher than anybody else's there are all sorts of tax benefits if you develop and hold your properties you can claim substantial depreciation you can avoid capital gains tax if you're holding them and if you hold them for five years you don't even have to pay GST on them when you sell them after the five-year period, so there are different tax benefits available higher return on capital well because you leveraged off the existing equity in your property now from the upfront payment is far less than the return therefore your return on new capital invested can be in the range of 80 to a hundred percent and I will show you an example very soon portfolio explosion Bank when you acquire properties at cost you acquire a lot more properties in a shorter amount of time that gives you an instant that gives your portfolio an instant boost greater savings if you are following a development whole strategy you can avoid agents commission marketing cost GST and all of which will add to your bottom line because especially this applies when you're actually holding them, so there are no other extra costs associated...
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