West Berkshire Council is set to spend up to £50million on commercial property in a bid to bring in more income for council services.
The idea was approved by full council on Tuesday and would see the council buying up properties it could then rent out to raise more money for the authority.
It is estimated that it could bring in an extra £950,000 a year for the council, based on the full £50m being invested.
However one Conservative councillor urged caution over its implementation, saying it could cost the taxpayer a lot of money if it goes wrong.
Alan Law said: “In principle, no doubt about it, it’s a great idea.
“But my reservation and concerns all centre on the fact that we as a council have little or no experience of being commercial property developers or investors.
“I note we’re planning to use outside specialists and consultants, but I must urge caution about using advice from people who have no risk involved.”
Property investment is something that a number of local authorities across the UK are already doing as a way of raising extra funds in the light of increased funding cuts from central government.
The money used for investing, which the council says would be between £25m and £50m, would be borrowed from the Public Works Loan Board, which offers Government money to public bodies at a reduced interest rate.
It will be invested within 18 months, and overseen by a newly created property investment board made up of councillors and officers.
However it does come with risk, such as non-renewal of leases, non-payment of rent, unexpected costs or changes in the state of the market.
Dominic Boeck, the council’s executive member who put forward the report at last Tuesday’s meeting, said: “The data shows we can expect surplus income of around £1m on such an investment annually.
“It’s an initiative that I think is going to deliver reliable, secure income streams for the future.”