Are you planning to invest in a real estate development project? Investment in the real estate market is a very crucial decision that one should not make without conducting proper research. If you have made up your mind, then you should be aware of the steps involved in real estate development projects to know the growth of your investments.
A commercial kinnisvaraarendus project usually has the following 7 primary steps:
Acquisition of Property
This is the first step in the real estate development process. This step includes searching for the most suitable place to start the construction. There are multiple factors to consider before selecting a site, like development factors, the neighborhood of the property, reasons for the demand of the property, whether other buyers also want it or not, and many more. These small factors decide whether your property will be successful in the long run or not.
Research and Analysis
After selecting a site begins the final research about the site. This includes making an estimation of the cost and projecting whether it will come under the desired investments or not. The next thing to take into account is the return on investment from the project, cash flow, supply, demands, and all other analyses to make a final decision.
Approval from Owners and Authorities
Once the property is finally selected, the next step should be taking approval from the owners for the construction you are going to start on the property. Taking approval from the authorities should not be neglected to avoid issues that can arise later. This process can take time if the property is very large; otherwise, it will be done in no time.
The next step after taking approvals is designing the project to begin the construction. This step involves working with architects and engineers who will assist you in displaying a drawing similar to what you are expecting your project to be. This process can look simple but takes a lot of time if the project is big.
Here comes the most important step, where a developer searches for options from which they can get the funds for their project. The developer’s own money can not be sufficient for the whole project, so different methods can be used for generating funds. It includes generating funds through selling stakes or borrowing. Many developers choose a mixed option in which they get funds from investors as well as lenders.
In this step, look for a reputed construction company and assign them the task to start the construction. However, the work of a developer does not end here; a regular visit to the site is mandatory to check whether the work is going smoothly or not. Ask the head contractors about the progress frequently.
Leasing-Up the Property
This step is not valid if the project is going to be sold just after the completion of the construction. If not, then developers should keep themselves with the project through lease-up to ensure their investment is not going in vain.
Having some deep knowledge of the real estate development project process is a must before you finally plan to invest in it. Learn more about real estate with Rabarebase and make money with real estate investments.