If you look at most millionaire’s investment portfolios, you will find that these individuals invest heavily in real estate. In fact, Morgan Stanley found that 77% of millionaires invest heavily in real estate. While some of these individuals purchase rental properties, others pursue property developments. Although these types of investments are much riskier, successful developers experience much greater rewards. These are some things you should know about real estate development.
Real Estate Development Defined
Real estate developers take land or other property types and improve upon them. For example, they may build new buildings or remodel or renovate existing structures on a piece of property. They may even subdivide and build multiple buildings on a single plot of land. Developers may create permanent or temporary structures. By making improvements to the property, its value increases.
Entering the Market
If you want to enter your local development market, e.g., real estate development Lincolnwood IL, you need basic knowledge of the industry and market and a great team. You may pursue a real estate license to learn more about selling and buying properties, but you need to know local zoning and real estate laws. However, your greatest asset is your team.
Your team should include realtors and mortgage brokers, legal staff, architects, construction companies and engineers. You may even work closely with individuals who conduct appraisals and inspections.
Your Need a Detailed Plan
You need to determine the criteria of your project and property. For example, do you want to renovate or build new? Will you subdivide? What type of structures do you hope to build, residential or commercial? You should create a working plan that outlines your projects based on the capabilities of your team.
Pursuing Your First Project
Your team should always be working for you, and when you are ready to start your first project, they should be ready with prospective properties. Then, you need to work on arranging financing. You may pursue debt or equity financing, but many new real estate developers work with experienced investors who can help them along the way.
If you are looking for new real estate opportunities, development presents a great challenge with outstanding possible returns.