If you’re considering entering the world of real estate development and real estate investing, it is important to understand the two well. This way, you can make the best property investments without compromising on anything, and ensure you get a good return.
We’ve put together this article to teach you about real estate development and real estate investing so you have a better understanding of the two.
What Is Real Estate Development?
Real estate development plays an integral role in the real estate industry. It involves acquiring and developing properties in order to make the best property investments with the highest returns. Real estate developers are very important in the real estate industry.
In most cases, acquiring a property is done with the intent to develop it into residential or commercial buildings like single/multi-family houses, restaurants, offices, industrial spaces, offices, and even apartment complexes.
What Is Real Estate Investing?
Real estate investing is the buying of existing properties as investments in order to bring about income, instead of using them as a residence. Simply put, it refers to any land, infrastructure, building,
The best way to understand this is through examples. For instance, office buildings, agricultural land, commercial plots, and houses are all considered real estate. Real estate investing is a well-known and secure way to invest your money in a smart way, and can gain good returns.
The Different Types of Real Estate You Can Invest In
Real estate encompasses many different types of properties, and they are classified according to their uses. Here are the different types of real estate you can invest in:
– Commercial Real Estate: These types of properties are usually spaces like office buildings and complexes which are segregated into many smaller units. These can be rented out and even be utilized to run businesses.
– Residential Real Estate: This type of real estate consists of “residential” properties, like houses and homes. Or multiple unit blocks. They can be old or new.
– Industrial Real Estate: These consist of larger-scale properties that are used in various industries. This type of real estate includes warehouses, manufacturing units, distribution centers, factories, and more.
– Retail Spaces: This kind of property usually consists of restaurants, shops, retail stores, showrooms, etc. This can consist of both, multiple units and single units.
– Mixed-Use: This type of real estate consists of a single freehold property but with different elements of the properties as mentioned above. This increases diversity and also lowers the risk of project failure.
– Fix And Flip Properties: Properties, usually residential, that are in a state of poor maintenance and are available at lower prices come under this type of real estate. These properties are “fixer uppers”, and are purchased with the intention to renovate and repair. Once “fixed and flipped”, the owners can then sell these properties at a higher price than the price at which they bought it.
The Real Estate Development Process
The process of real estate development constitutes many steps. It usually starts off with a concept, which when seen through to the end, can be a property that is fully developed and ready to be leased or purchased.
Real estate developers have the needed education and skills to see opportunities that can be completed to fruition.
Before a property can be developed, however, extensive research needs to be conducted and budgets need to be set in order to see through projects in a financially feasible manner.
– If the developer sees an opportunity for a project that works and is within budget, they may well need to employ other professionals to undertake planning requirements building regulations, etc.
– After this initial step, designs are then created and needed applications are turned in. Depending on the project in question, developers may even have to go through public hearings for larger projects. This gives the community a platform to express questions and concerns about the project in question.
– Once the project is approved, everything needs to be finalized. Especially in reference to contracts and finances. After which, construction/development can commence.
When a project is properly seen through and completed, the real estate developer will need to get the right building, so they can go ahead and lease or sell the newly developed space.
Conclusion
We hope this article helped you understand the must-knows of real estate development and real estate investing. If you’re interested in making smarter choices that lead to the best property investments, contact us and we’ll be happy to help you on your journey.
