Understanding of the Real Estate Development Process
When it comes to real estate development, there are a lot of different aspects in this business. In a broad term, it refers to anything involving land and the construction or renovation of structures. In this process, developers are the ones who act as coordinators and overall head of the project.
The whole process can be simplified into a basic model. One way to look at it is that development involves scoping the market for properties with potential, purchasing the lot, developing the area and selling it at a profit. In other words, real estate development is mostly about the construction (and/or renovation) of houses or buildings, and the process usually starts with the purchase.
Once a piece of land or a house or an old building is purchased, as a developer, first of all, you should start creating a plan. There are a lot of possibilities when envisioning for a place. Will you be aiming for a residential building or commercial shops? If you are aiming for a residential building, will it be a stand-alone house or a row of townhouses or units?
You should be choosing the one that would maximize the marginal profits. It is advisable to take as many factors as possible when considering the area. For instance, if it is a commercial area, to build a house would not be the ideal choice. Perhaps an apartment with the first floor reserved for shops would be a better option. This will raise the value of the property as it would draw the attention from a wide range of people and not only just one family or one shop.
After finalizing the real estate development plan, the next step is to engage a construction team/contractor. As a developer you will need a handful of people to help you coordinate and lead different aspects of the work. When engaging consultants from different departments, make sure that the person you hire is experienced and trustworthy.
During the construction process, make sure that you have the necessary papers (Permits, endorsed plans, Certifications, etc.) and the rehabilitation is within the budget. In this process, you will need to make decisions as to what kinds of materials should be used and what particular features should be designed to fit the market. We suggest that you should be regularly computing the cost and check if there is still room for a good profit, and know when and how to adjust.
Real estate development may take months. Keep the timeframe reasonable. Even before the development is completed, you can start advertising your property for sale or alternatively rent it out to add to your investment portfolio.
While property development can vary, many beginner developers find it difficult to run the process on their own because they do not have much experience or knowledge in this industry. Before stepping into a potential minefield, make sure that you do sufficient homework! or Alternatively, you can engage us to help you compete your development as we do the whole lot for you!