Which of the following best describes speculative development?

Speculative development refers to the practice of purchasing land or properties with the anticipation that their value will increase, typically due to future development. This involves acquiring land without a specific buyer or tenant in place, banking on the idea that once the development occurs, the property can be sold or leased at a higher price. The correct answer conveys this concept accurately, highlighting the aspect of risk and potential reward inherent in speculative development.

On the other hand, enhancing existing properties refers to renovations or improvements made to an already developed property, which does not align with the speculative approach of starting from raw land. Buying fully developed commercial buildings and investing in residential rental properties focus on acquiring assets that are already generating income or value, rather than the gamble associated with speculative development. Therefore, the focus on purchasing land with the hope of increasing its value through development directly captures the essence of speculative development.