The world of real estate development has proven quite lucrative in modern society. With urbanization and development of remote areas happening hand in hand, there are several opportunities for one to invest. A real estate venture can include several areas such as land purchase, construction, complete renovation, or rehabilitation.
There are several ways to invest in real estate. The first way is going through the full process: obtain financing, purchase the land, develop the plans, get the permits, construct the property, and then either sell or rent it. Others go for the alternative option of just acquiring the land, sub-dividing it into smaller lots, and then sell the lots for a profit.
Irrespective of the real estate development option you choose, as long as you are conservative and follow market trends, you can reap considerable profits. Returns on investment can be instant when property is sold, they could be yearly through leases, or monthly through rents.
Keep in mind that there are several risks involved in real estate development that could result in a failed investment. One of them is lack of demand to rent or buy, or a sudden decline in the market due to unpredictable reasons; an example would be the 2008 global financial crisis that plummeted the housing market. You can also acquire a property for development, make the plans, and then not be able to obtain the permits necessary for completion. Lastly, though scarce, natural disasters can happen anytime and anywhere.
Art Acosta says a "Successful real estate development is usually more of a team effort than a private venture." This means that for an organization/person to be able to make the most out of their investment, they need to recruit a great team and promote their ventures aggressively. This can prove to be a costly and timely affair. Hence, real estate development is often considered as a high risk, high reward venture.
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