PROPERTY DEVELOPMENT IS ALL ABOUT CREATING YOUR OWN EQUITY
Things that we take for granted, like roads, sewers, houses, office buildings, and shopping complexes don’t just magically appear. Someone must be motivated enough to undertake these projects and manage the creation, maintenance, and eventual recreation of the spaces in which we live, work, and play. That person is the Developer.
One definition of property development is “the continual reconfiguration of the built environment to meet society’s needs.”
Property development as an investment strategy is the greatest way to “manufacture” equity and equity in real estate is wealth.
By buying a site and adding value through development, you can either refinance or sell the end product at retail prices and have the ability to not only save money but make more.
Think about it, it’s just like brokers say in the stock market, “buy low - sell high”, well, buying a property at wholesale or “bargain prices” and adding value to it by building a hotel, or holding it or renovating an old factory that already existed on it, into We-Work offices is how you create wealth (Equity).
As a developer, you can then use that equity to refinance (i.e. take out cash) or use it as collateral to borrow more or sell it outright for a profit to invest in other ventures.
Just starting out many developers “cut their teeth” on minor undertakings like basic renovation work, i.e. buying a property and maybe adding a new kitchen and bathroom, new flooring, etc. They may hold the property and use it to generate rental income or sell it for cash to invest in more/bigger properties.
From there many developers progress to subdividing a block of land and building larger allotments where the zoning allows for multi-family townhomes or single-family homes.
Whatever your path to building a portfolio ambition is a crucial asset for any property developer, as is the ability to think big,
As a developer, your role is to take a project from the conception of an idea, right through all the stages of design and approval, financing, construction and marketing, and eventually the leasing or sale of the project.
Successful property developers are a bit like movie producers. They assemble a highly talented team of people and skillfully lead them to develop a profitable outcome.
Developers need to be proactive and make things happen. They must also be creative, flexible, and adaptive to take their project through the development maze, not to mention all of the bureaucratic red tape that’s involved with council applications, zoning restrictions, and the like.
There are a few key basics ever developer must undertake to move along the path to becoming a successful developer.
Take your time
Do the research
Developers require a good understanding of the town planning and construction process and marketing of real estate projects. The developer carries the financial risks of the project but stands to reap the rewards if it is a success. In other words, the buck literally stops with you – the developer.
I hope we haven’t made it sound too easy, because there are lots of minefields along the way, but choosing a knowledgeable, experienced developer like BHI is 80% of the battle. Partnering with a company that can save you time, money and most important worry can give you a leg up in the development game, so do your research.
Contact BHI Construction & Real Estate Development Corporation for a consultation on your next project.
Good Luck and choose wisely.