What’s More Important in Development: The Land or the Money?

The age-old question

Ah, the age-old question of real estate development: What’s the real kingmaker—the land or the money? It’s like asking what’s more important in a marriage: love or financial stability? The hopeless romantics will say love, while anyone who’s actually been married for more than five years will tell you, “Good luck sustaining love when the deal goes south and the bills aren’t getting paid.”

As a Toronto real estate developer who has spent endless years in the trenches, I can tell you that this debate isn’t just academic—it’s what separates the successful from the suckers. And like any seasoned developer, my answer is simple: It depends on who’s holding the cards and how well they know the game.

The Case for Land: The Golden Ticket (If You Can Get It)

They say in real estate, “you make your money when you buy, not when you sell.” That’s because land is finite—they aren’t making any more of it (unless you’re Dubai, and even then, let’s see how long that lasts). In Toronto, where zoning laws, political red tape, and NIMBYism can kill a deal before you even get past a pre-application meeting, having the right piece of dirt in the right location is priceless.

If you control land, you control the board. It doesn’t matter how much money someone has if you hold the site they need. Developers have made fortunes simply by sitting on land and letting appreciation do the heavy lifting. But here’s the catch: Land without capital is just a dream with property taxes.

Owning land means having leverage—if you have the right location, you can dictate terms to investors and lenders. Landowners with prime sites in high-demand areas are like rare art collectors—everyone wants what they have, and they set the price. Land can also provide a buffer against market downturns; even if development slows, well-located sites continue to appreciate over time. However, there’s a downside: land can also be a ticking time bomb. Holding costs, property taxes, and zoning challenges can quickly erode potential profits if you don’t have a plan (or the cash) to move forward.

The Case for Money: The Puppet Master Behind the Curtain

Then there’s the money. Capital dictates everything. You can have the most spectacular piece of land, but if you don’t have the funds to get through approvals, servicing, and construction, all you have is an expensive liability. The developers who last in this business are the ones who understand how to leverage other people’s money (OPM) while keeping their own exposure minimal.

Every major deal in this city boils down to who can finance it the smartest. Ever hear of a landowner who thought they were sitting on gold but had to sell at a discount because they didn’t have the cash to hold? Happens all the time. Money is the great equalizer; it turns raw land into profitable buildings. But money alone doesn’t guarantee success—ask any rich guy who thought throwing cash at development was easy. Spoiler alert: It wasn’t.

Money isn’t just about construction costs—it’s about staying power. The ability to hold a property through market cycles, to navigate delays, and to secure favorable lending terms determines whether a deal succeeds or collapses. Developers who understand finance can make money even in bad markets, structuring deals with creative financing, joint ventures, and equity partnerships that allow them to minimize their own risk while maximizing returns. On the flip side, having money but no vision (or no access to good land) is just as dangerous—you end up investing in mediocre sites, overpaying for underperforming assets, or financing projects that will never get off the ground.

So, What’s the Real Answer?

The best developers know that it’s not land or money—it’s control. Control is the real currency of development. If you can control land without overpaying, you win. If you can structure a deal where someone else finances the majority of the risk, you win. If you can time the market, navigate the political minefield, and outmaneuver the competition, you win.

Land without money can leave you broke. Money without land can leave you desperate. But the ability to control both? That’s where the real magic happens. And if you can do it while keeping your head straight, updating investors, dodging city planners, and convincing NIMBYs that your project won’t destroy the neighborhood (spoiler: it won’t), then you just might make it in this game.

Final Thoughts: The Art of Playing the Game

At the end of the day, development isn’t about picking a side in the land vs. money debate. It’s about playing the game better than the next guy. It’s about structuring deals where you get the upside while limiting your downside. It’s about knowing when to buy, when to hold, and when to let someone else take the risk.

So, what’s more important? If you’re asking, you might already be behind. But don’t worry—there’s always another deal around the corner. Just make sure you’re the one holding the cards, not just playing the game.