Getting Into Real Estate Development
The business of real estate development is not a new concept. It is also not as complicated and daunting as it usually sounds when people talk about it. In simple terms, real estate development means buying a piece of land, improving it by upgrading its existing buildings or building new and profitable structures, and then selling it again at an increased price for a profit.
However, getting into real estate development can be more complicated. Those who are already in real estate development are usually professionals who are dedicated to and who specialize specifically in this arena.
Since real estate development can be either very profitable or very unprofitable, to become a successful real estate developer, one must be able to discern between productive opportunities and a losing ones. This may be done by investing a great amount of time in studying the business, gaining vast amounts of experience, and mastering market trends.
If you are just starting out in the business or are just plain curious as to how to get into real estate development, below are some simple concepts that you can undertake in order to get underway:
Educate yourself
You can obtain a degree in business administration, finance, urban development, or construction management from various educational institutions, including universities and schools. When you have achieved this, you may now take the required courses and examinations to be able to become a licensed real estate agent – a position that will expose you to numerous opportunities and provide an avenue to gain excellent groundwork for your future business.
Get involved in real estate business transactions by working in a real estate firm
This job will give you adequate experience in dealing with the buying, selling, and possibly development of land. Once you are in, try to take in all the important information that you may be able to use in the future for reference.
While you are at it, try not to spend all of your commission checks. This is a great time to start saving so that you will be able to provide initial financing for your real estate development business.
Get legal protection
The real estate market can be very volatile. One day you may be facing great highs, and the next thing you know, your business market values are at a sudden and devastating low.
To be able to protect you from the damage of financial downturns in the market, you may want to found a business unit that will provide you with protection from liability. Establishing this separate body may cost you more when it comes to fees, disputes and accounting, but it will be well worth it if it protects your business’ financial sustenance. Think of it as a form of insurance for your business.
Partner with contractors and construction firms
Making friends in the real estate business is important too, especially if you are figuring out how to get into real estate development. Try working and mingling with such people so that you can know who to trust and who to avoid in future projects.
Also, building good working relationships can lay the foundation for an excellent business relationship in the future, and ensure quality and timely project output when you are funding and establishing your own projects.
Study real estate market trends
As with the general concept of investment, buy when the prices are down, and sell when they go up. These days, you can do this type of trading online, and study important information on what’s trending when it comes to real estate.
Befriend local lenders who can potentially hasten your lending transactions in the future
This can also assure you of great deals and good interest rates.
Try your hand out in commercial real estate
Unlike residential real estate, commercial real estate enjoys more freedom and more earning potential.
Cycle your funds
Early on in your business, it would be unwise to start splurging right away. Make sure to reinvest a healthy amount into your business so that you can grow it further and achieve success.
