The 7 Biggest Benefits Of A Joint Venture In Property
Last updated 19th June 2019 • Lois Arcari • JaeVee
We believe in joint venturing when it comes to property development - that’s what makes us ‘JV’ - literally! We think we can make you a believer too.
Just look at our 7 biggest benefits below:
1. All new expertise
A joint venture offers a great opportunity to expand upon your partner's specialised knowledge.
You can increase your technical expertise while offering them your own. Joint ventures enable you to gain access to new staff, equipment and capital.
Joint venture partnerships can even help you understand how to utilise new trends inside the industry - for example, joining forces with a proptech company will help you get on board with industry growth and help you revolutionise your property development brand.
Two - or more - heads really are better than one!
2. Access new markets & networks
You can experiment and expand far more comfortably when you have an industry expert on your side.
Joint ventures are especially useful to make sure you’re not going in blind if you want to expand into a new area.
Creating a JV partnership is great for expansion with the peace of mind that all local logistics and regulations are taken care of by your local experts.
3. Fantastically flexible
A joint venture can be hyper-specialised with a limited lifespan. So you don't need to worry about an extensive commitment - when you and your partner create your SPV together, it will be a separate legal entity created in order to fulfil a specific, time limited purpose and isolate financial risk.
This means that your partnership will be time sensitive, and easy to exit should the need arise.
Further meaning you can enjoy fantastic flexibility with reduced risk.
But if you love your partnership, you can use it to build great long term relationships between your companies.
4. Successful synergy
Great partnerships bring the best of both businesses. Great things can come from the combination of company cultures and ideas, but there's more!
Joint ventures bring in financial synergy that lowers the cost of capital.
They also bring operational synergy that makes everything efficient.
5. Increase your customer base
You’ll be able to market your property development to a wider customer base thanks to your joint venture partner. You’ll each benefit from being able to offer your partner’s services to your own existing customers.
It’s a win-win for both of you!
6. Build up your brand
Collaboration creates increased credibility. If you're just starting out, a well known and respected brand for your joint venture will prove that you're one to watch.
Joint ventures are a great way to gain trust from locals, potential customers, and industry insiders.
The best part is that increased credibility = increased market visibility.
7. You’ll be in it together
So, you’ll be sharing talent, industry know-how and expertise.
If that’s not enough for you, you’ll also share the costs and responsibilities. Should the worst happen, this means you’d share the losses and the costs of failure too.
But don't be pessimistic.
A joint venture lowers your risk. This gives you more opportunity to explore the market and expand your property development business.
Best of all, you won’t have to worry about finding the money all by yourself.
Bonus - Joint Ventures are especially popular for building international relationships. This is the ultimate way to expand your market area, and allows you to cooperate with different cultures!
To inquire about creating a partnership with JaeVee, contact us to chat with one of our friendly advisors.
Please note this blog post is not to be considered as investment advice. We recommend you seek independent financial advice and conduct your own due diligence before making any investment.