Effective Real Estate Investing

All you need to have is the motivation, drive and a few simple tips and you can already have a lucrative real estate investment venture. Here are some tips for effective real estate investing.

It is all about the location – effective real estate investments is all about scouting for the right locations. The best properties to buy are the ones that are located in underdeveloped locations that are about to see some development in terms of better roads, public transportation routes, utilities and other huge real estate developments that can impact the property values of the surrounding locations. If you are able to buy when the property values are low, you can generate huge returns on your investment when the property significantly increases in value due to the developments in its surroundings. Even the simplest developments can greatly increase the property values.

Buy only properties that are free of red flags – do not buy properties that have a lot of negative improvements or encumbrances. Negative improvements are improvements made to the property that negatively affect the value of the property. This can range from poorly designed buildings, ugly landscaping, as well as other negative improvements.

Encumbrances range from legal disputes regarding the property, irresponsible present property owners, squatters, difficult tenants as well other parties that are interested in the property. Only buy properties that are free of these red flags as it will ensure that you have peace of mind. Red flags will not only stress you, it will also negatively affect your finances.

Improve the property – if you want to generate excellent returns to your property, here you really should improve it. Even the simplest of improvements can significantly increase the value of the property. Improvements range from landscaping to actually constructing a building on the property.

Other improvements include placing concrete footpaths, sheds and other useful improvements on the property. Investing more resources n the development and improvement in your property is vital if you want to make sure that the market value of the property is going to improve. The investments you made on improvements can be offset by the amount of money that you can make when you eventually sell the property at a good market price.

Sell only when you have to – one of the most important tips for effective real estate investing to make sure that you should only sell the property when you really have to. This will guarantee that you will be able to sell the property at the best price. Do not sell at the first instance that the property values increased.

Attention Real Estate Developers – What Is In Your Business Plan?

Do you need a real estate development business plan? You will if you want to obtain financing for your project. The first thing any lender or private investor will want to see is your real estate development business plan. This plan is specific for development of real estate. Your business plan will tell your story in an organized and concise manner. It will provide all of the critical information needed to judge your project. A well-written and professional looking business plan is crucial for your success in obtaining financing.

Most real estate developers make the mistake of not creating a good business plan or even getting professional assistance in developing their business plan. They will use the excuse of not having enough time or they can’t find the data. Don’t let that be your excuse! All a real estate development business plan really is, is the answers to a bunch of questions! You will learn what to include in your real estate development business plan.

Executive Summary

The Executive Summary should provide a complete overview of your project & company. This will include:

Brief description of the overall project. For example, develop a 4 star, 250 room luxury hotel in downtown St. Louis, Missouri.
Brief overview of the company – Is it a corporation, LLC, etc? Who are the owners and/or board members? Brief company history & experience level.
Brief summary of the market & demand.How large is the market and at what stage of development is the market currently in?
Brief summary of the competition and what separates you from them?
Brief description of key Management team members.
Key financials – total acquisition & construction costs, nature & use of funds, future revenue & expenses.

The Executive Summary should be brief and an outline to your overall business plan. Now lets take a look at the specifics in the real estate development business plan.

The Company

This part of the business plan should give full details about how and when the company was formed. It should indicate the legal structure of the company, as well as where it is licensed. A key piece of information about the company is the company owners. Name all of the principals and their percentage of ownership.

Project Description

This section of the plan is where you explain your project in detail. Remember, you are selling your project so that you can get the funding you need! Is this a hotel development project? Is this a luxury, single-family home community project? Is this a multi-tenant shopping center? Give all the details about the project. For instance, lets continue with our hotel example. You will want to name the other amenities that will be located at the hotel, such as swimming pool, tennis courts, the number of conference rooms, etc. How many of the rooms will be suites? What other features & benefits will your project have?

You will also want to address where you currently are in the project. Has the land been purchased or optioned? Where are you in the permitting process? Has the architecture plans been drawn? How much time & capital has been spent on your project to date?

The Market

In this section you will provide the market type & size, current & potential growth rate, and relative stage of development of the area. You should also address why you chose this particular area. You should discuss any forthcoming changes in the market, government regulations, economy, and short-term & long-term trends. If you have performed any feasibility studies, you will want to include it as well as the source of the feasibility study.

The Marketing Plan

The main objective of any developer is to sell the homes, the stores or the hotel. And this can only be accomplished with a well thought out marketing plan. Who will handle your sales efforts? Will they be in-house or out-sourced? How will the pricing/leasing/room rate be determined? Will there be any brand or strategic partnerships involved? What is your marketing budget (in a table format).

The Competition

Any lender or investor in your project will want to feel comfortable that you know who your major competitors are. They will want to know that you have done a thorough competitive analysis. Name and describe all key competitors. What are their strengths & weaknesses? How will your project compare? What are your projects strengths & weaknesses?

The Management Team

In this section, you will want to go into further detail about the principals involved. You will need to highlight the team’s relevant experience and previous successful projects?

Well what if this is your first project?

Then you want to make sure that you have an excellent support team in place. These team members should have the experience that you are lacking (team members doesn’t necessarily mean company ownership). These team members can be legal, accounting, construction, architecture, etc. So for this section of the real estate development business plan, you will want to include:

Resumes/biographies on all principals & management team members
Organizational chart
Board of Directors

The Financials

Since the primary objective of your business plan is to obtain financing, you will want to address what type of financing you are seeking and how much capital is needed. You will want to state how much money you have on hand (and where did you get it from) and how much money you have spent to date.

Everything that you have put into your real estate development business plan up to now should support your financial assumptions and projections. You will want to include a statement that shows a breakdown of construction and acquisition costs. You will want to include an Income statement that will outline income and expenses for the next five years after construction. It should follow GAAP (Generally Accepted Accounting Principles) and contain specific revenue & expense categories. You will want to include a Balance Sheet and Cash Flow Analysis.

Now that you know what to include in your real estate development business plan, make sure that your business plan presents itself in a professional manner.

Use a table of contents, with numbered pages.
Make sure that the writing style is simple and conversational.
Don’t use long or complex sentences.
Paragraphs should be short & simple.
Use graphics & pictures but don’t get carried away.
Use charts & tables to back up your data.
State all sources of your data and studies.
Proofread your real estate development business plan for grammatical and spelling errors.
Have someone else proofread it for you.
If you have the resources, hire a professional business plan writer.

Dubai Real Estate Developers Revising Prices and Payment Plans Based on New Market Conditions

With an estimated 70+ projects that are now for sale across Dubai, we are increasingly seeing Real Estate Developers revise their offering, prices and payment plans to gain market share.

While the major established developers like Emaar Properties, Nakheel and Dubai Properties Group are still able to sell out projects with relative ease – there are now dozens of smaller, private developers that are building various types of projects across Dubai.

The competition is strongest on the mid-end segment. Hot spot areas of development include projects like Dubai Sports City, Jumeirah Village and the greater Dubailand area. With so much competition in this segment, developers are adapting to the market place with new, innovative campaigns and product placements.

A bit of background; Dubai’s real estate market crashed in late 2008 and between 2009 – 2011, the market corrected drastically with prices declining between 30 – 50% in some cases.

Starting in 2012, mainly as a result of instability in the region (remember the Arab Spring), billions of dollars poured into Dubai – largely being diverted into the local real estate market.

From 2012 – to late 2013, the market appreciated drastically. In order to cool down the market and prevent another bubble, the Government took a number of measures to prevent speculation. An increase in the mortgage cap, doubling of transaction costs and preventing off-plan buyers to resell immediately have all contributed to a slow down.

The slow-down has not been as drastic as once feared. The correction which began in mid-2014 has seen prices decline by 7 – 10% on average for most communities. Many of the small and medium sized investors have started consolidating their positions. Most mature communities have high occupancy rates and now witness less transactions.

The overall market has now shifted towards the off-plan market. Buyers from within Dubai and from overseas are attracted to purchasing on payment plans which minimize cash flow and risk.

Thousands of units have been announced for development since 2013. In the long run, the city will require new housing to counter a growing population and high rental costs which contribute to the high cost of living in the city.

With so many under-construction projects, developers are competing against one another in ways that they have never done before.

Developers are revising prices downwards and in an interesting turn of events, many new projects are now offering payment plans which extend to upto 3 years after completion – a concept which was pretty much unheard of a few years ago.

Good examples of these extended payment plans are projects like Royal Estates in Dubai Investment Park, GGICO’s numerous developments in Sports City and Dubai Silicon Oasis and Al Khail Heights.

Even high-end developments are beginning to introduce flexible payment plans. Fortuna Village, a 30 townhouse development enclave within Victory Heights, has recently offered buyers a chance to pay off their units upto one year after handover on a 6% increase on the purchase price.

According to research done by on under-construction freehold supply, there are 9,000 villas, 6,300 townhouses and 38,000 apartments currently under-construction across Dubai.

The 4 Principles of Securing Real Estate Development Finance

Unless you’re one of a very privileged group of people and you do not need to seek Real Estate development finance, getting the cash you need is probably one of the most influential aspects of whether your real estate venture will succeed. That said, even if you don’t need to borrow money for a development, it usually makes business sense to borrow at least some of the cost anyway (that point is for a different article!).

Make no mistake, like all investment – real estate involves an element of risk to a lesser or greater degree. And like all businesses, risk should be managed. However, it could be said that ‘risk’ allows profit (or loss) to be made. If a real estate Investor or Developer has no appetite for risk, they may as well stuff their mattress with cash rather than putting it into Property. If there were no risk involved, wouldn’t everyone be a Property Speculator?

So it could be said that Risk is nothing to be intimidated by, but that it should be monitored so you don’t lose the shirt off your back (and with property, it’s possible to lose an awful lot of money in a short space of time if ridiculous mistakes are made). A philosophical attitude to this is quite important, because the truth of the current situation is that banks would really prefer the customer to shoulder as much of the business and project risk as possible. Let’s face it banks are in a powerful position, they have the money that the Developer wants…they call the shots. If you haven’t got the nerve to take on the risk, the bank will lend the money to another Developer who is prepared to take the risk.

I personally don’t think that this is a bad situation. It could be argued that the current/recent financial crisis who due in part, to excessive lending to people who should have been subject to greater scrutiny.

The 4 (very) basic rules to consider before approaching banks for Real Estate Development funding are:

1. Make sure you have access to people with experience! It is often said “never invest in anything you don’t truly understand”, if you are a novice Developer you should not be attempting to learn everything my your mistakes….they will be too costly. Speak to people with experience. The bank will insist upon you having good and regular access to appropriate professionals such as Architects, Structural Engineers, Realtors/Estate Agents or Building Surveyors.

2. Don’t expect to borrow too much against the project! As a general rule, a bank will expect you to put up at least 25% of the combined total of initial project purchase and build/development costs. You should also include a contingency fund of around 5-10% of the total build cost figure. It’s also a good idea to have enough working capital to be able to fund the initial stages of the individual build stages just until the bank releases funds in a staged-payment arrangement.

3. Don’t use a Limited Liability Company when you are starting out! The primary purpose of a LLC is to limit the personal risk of the company owner(s), this is not what the banks want to see. They will want to ‘facility’ to pursue you to recoup losses if it all goes wrong. This may sound dramatic, however I am talking worst-case-scenario! In reality, banks would far rather work with you to sort out problems than immediately enforcing their agreement covenants.

4. The CV of the individual Developer. When you begin to establish a good track-record in property development, the banks will tend to be far less nervous about lending you money. It’s never a good idea to take on a huge project that the banks knows will challenge you. It’s far better to gain experience by carrying out light work (such as modernisation and redecoration) rather looking for a substantial rebuilding project as one of your first attempts. ‘Easing yourself’ into the field of Property Development is the way all very successful professional developers have done it. It’s not a way of life that should be entered into on a whim; if a Developer gets in ‘above their head’, they are far less likely to continue in the field. Completing a Real Estate development is a very satisfying thing, it’s much more sensible to complete several ‘quick refurbishments’ than jumping straight into a substantial project requiring specialist structural work.

To conclude, banks are willing to lend at the moment. they have simply become more scrupulous with who they lend to. If you have prepared yourself properly to begin your venture (and you’re creditworthy), then you will find that the banks are far more likely to accommodate your requirements for Property Development Finance.

Real Estate Development Software

When people refer to real estate, they mostly refer to ready-to-use residential or commercial complexes. But it can also refer to empty or reclaimed land. Real estate development does not limit itself to construction of an edifice. The entire process includes choosing an appropriate construction site, purchasing the land, and building, marketing and selling the property. To simplify this complex process, a number of developers and realtors use real estate development software.

Real estate development software helps the user review options and calculate the profitability of a future project. It is an important system that can determine the usefulness of a commercial property and evaluate probable development.

It is also useful to analyze profitability for real estate development alliances between different builders and developers.

In its initial days, real estate development software was not as advanced as it is today. At that time, these were simple applications that were created to simplify day-to-day tasks. Over the years, valuable advice from a number of developers and realtors from across the country has been incorporated. This has resulted in real estate development software that caters to every aspect of real estate development.

Field executives, who have a detailed understanding of land development and construction, provide groundbreaking inputs to further improve real estate development software. This software caters to the needs of every specialist in the real estate business.

Updated site reports, development progress and drawbacks are accurately documented. The system studies and maintains records for all possible variables that can be compared. This categorization of data, risks, options and profits provides transparency amongst business associates. The system allows concerned professionals to make changes and instant decisions to facilitate effective real estate development.

What a Real Estate Developer Does

If you are considering a career in real estate there are a number of options open to you beyond the most well-known ones, such as acting as a buying agent. Instead, you may choose to enter real estate development, where you will actually have a direct hand in the creation of different types of property, instead of simply acting as the third party in transactions involving said properties.

So What Do They Do?

Simply put, a real estate developer is the person that makes a building happen. They are the ones with the vision, whether it is a simple house construction of the development of an enormous skyscraper that can be seen from miles around.

While they won’t be the ones actually building the property, they are the ones who will need to arrange for everything to be done and will usually be the person who assumes all of the risk for whether or not the project ends up being a success.

It’s usually their money and their land that the building is being built on, so a real estate developer is somebody who truly makes things happen in the industry and they are vital to keeping the entire industry going.

What Do They Need?

First and foremost a real estate developer is going to need the cash to make the relevant purchase to secure the land they wish to build on. Whether this be their own cash or money coming in from investors is up to the developer, but without a budget they are not going to be able to do anything.

Assuming the required money is in place, a real estate developer’s next task is to find a good team. They will need architects, builders and everything in between to make sure that their project comes to fruition. Just like every orchestra needs the right players before they can make magic, so does the team assembled by a real estate developer.

The last thing they need is a reliable supplier of materials. After all, the materials make the building and it is enormously important that the suppliers are both reliable and able to provide the best possible materials on the market.

So What Are The Risks?

As great as the rewards can be, real estate development also carries with it an enormous risk that must be considered before you start any project. Simply put, the outcome of the development is entirely on your shoulders. Sure, the developer needs a big team of people to make everything come together, but that team won’t be sharing the blame if things go wrong. In fact, more of the blame can be heaped on the developer’s shoulders simply because they are the person who assembled that team.

As such, it is important to have plenty of knowledge before you enter this side of real estate. It is not something that can be done by halves, so you need to make sure that you have the time, money and dedication required to make it a success, or you may well find that your reputation ends up in tatters.

Real Estate Developer Jobs – Q & A

Of all the potential careers going today, real estate developer jobs might be among the most challenging. As markets crash and the game changes, smart developers are making the right adjustments to survive. Those who are not are finding their firms strapped for cash and hard up for work.

If you’re considering a job in real estate development, the following questions and answers can help you learn more about the field:

What is a real estate developer?

Real estate developers purchase land basically on speculation for future development. In many cases, they oversee construction on the site and make sure “value is added” to the land. Once development has taken place, they either sell the property to others or they continue to hold ownership while leasing units or buildings out to others.

What kinds of jobs are available in development?

This field actually demands a variety of skills. Beyond the “money man” or funding group, development requires accountants, surveyors, market researchers, clerical staff, construction supervisors (if the developer does the construction work personally), lawyers and more. The skills required for development run a broad spectrum.

How do I get into real estate development?

It all depends on the subfield you are interested in pursuing. Actual developers need the financial backing to purchase and build on land. Support staffing skills range from clerical to legal and accountancy to geological.

How stable are developer jobs?

That all depends on the development firm in question. Many companies are adapting well to changes in the market and are keeping their heads above water. Some, however, are having a difficult time as of late and are dealing with the same crunches everyone else is.

What are stable firms doing to survive and keep jobs going?

Many of the most savvy real estate developers are building their futures at present. This means they are buying land to hold rather than develop. Those who are developing are often sticking with “sure things,” such as government work or building for big-name anchors. Others are filling in with necessary development in niche areas, such as apartment construction.

Why should real estate development be of interest?

This field is a unique one in that it is constantly changing. Many of the real estate developer jobs available are high paying and open to those with the right skills. If a good and stable firm is found, this field can help newcomers build long-lasting careers.

Real Estate Developers in India Rise Over and Above

Indian real estate construction firms are surging ahead by leaps and bounds. Realty today is one of the fastest growing sectors in India. Market analysis pegs returns from realty in India at an average of 14% annually with a tremendous upsurge in commercial real estate on account of the Indian BPO boom. A significant demand is also likely to be generated as the outsourcing boom moves into the manufacturing sector. Further, the housing sector has been growing at an average of 34% annually, while the hospitality industry witnessed a growth of 10-15% last year. The relaxed FDI rules implemented by India last year has invited more foreign investors and real estate sector in India is seemingly the most lucrative ground at present. Private equity players are considering big investments, banks are giving loans to property developers, and financial institutions are floating real estate funds. The market of real estate developers in India is immensely promising and most sought after for a wide variety of reasons.

1997. A quiet start. An initial investment of Rs.10000, 4 people and the simple idea of giving Bangalore, buildings that blend with its natural landscape, preserving the charm of the city.

2008. There’s no turning back whatsoever. Eleven years ever since, it has only grown stronger and stronger. A 100% growth year after year is no meager task by any means. Real Estate Developers have proved it time and again to be among the pioneering real estate developers in India. Their unique approach of blending physical environment with its surroundings has sparked a revolution. Many Real Estate Developers in India now hold them in the highest of respects.

Ever since their inception they have managed to stay true to their vision with their exemplary brand of buildings which is now home or office to more than 500 totally happy clients. Not only are they interested in protecting the environment, but they do it rather in interesting and innovative ways! Terrace gardens, creeper panels and plant friendly pergolas are the elements adopted to bring the natural surroundings into homes and work spaces. The living, breathing and conscious buildings built by this progressive architectural design firm incorporates ‘Rain Water Harvesting’ to recharge the ground water for reuse wherever possible.

Real Estate Development Risks

Real estate development risks and there control is the number one priority of professional developers or maybe they never get to do another development. I am continually amazed to find after six years of teaching developers that the first thing most do is buy some land with some of their own cash and borrowing the majority from the bank.

To new developers getting control of the land seems logical and yet is the last thing a professional does. So beginning a real estate development by doing the complete opposite to what you should do is putting yourself behind the eight ball from day one and send the ‘risk’ indicator rising.

From a development point of view land is only worth what you can do with it and that is determined by the Town Plan of your City or Town and the particular zone that applied to the land you are considering.

For example, if you were to buy land that is zoned Rural and you wanted to develop some townhouses or residential houses, you would not be able to do so.

If you bought some industrial land and your idea was to develop some shopping on it you would not be allowed to do so by the Town Plan. Professional developers learn the Town Plan, as well as all the regulations that control development activities in certain zones that are of interest to them.

I mentioned another real estate development risk in the second paragraph that is overlooked in a most cases and that concerns the type of finance selected by a new developer when incorrectly he/she buys land as part of their first action.

In one way it is easily understood because the only kind of loan the average person knows about is a mortgage over 25 or 30 years. But a mortgage is the absolutely wrong type of loan to take out when you are a developer.

Why is that? Well, mortgages have to be paid back every month and that means cash coming out of your pocket every month. That is not what developers’ need or only the very wealthy would be able to develop anything.

Developers don’t pay the lender of development finance every month out of their cash flow (pocket). The amount of interest is calculated on a monthly basis on the amount a developer draws down from the lender. That interest is then added to the pay back amount required at the end of the development.

The next reason mortgages are the incorrect finance tool is the length of a development project can be anything from say, one year to maybe three years and then we pay all the development borrowings back to the Lender.

So as mortgages on property last for a longer period of time, they are clearly not the correct product for a short term developer.

So by not being educated in real estate development a new developer is committing to land without knowing “exactly” what can be developed on it and then buys it with the wrong finance package.

So as I said earlier, putting yourself behind the eight ball ‘twice’ at the very beginning of a development is a rotten way to begin your development life.

A few more items of real estate development risks to consider are market knowledge and the lack of a development system blueprint.

Looking at market knowledge many new developers don’t appreciate that they are really a ‘manufacturer.” For example, when you buy any product in a shop it must have many features for it to be bought and successful.

It must be priced right for its target audience; it must be great value; it must do the job it is supposed to; it has to be designed; it has to be researched before it is designed and many other sub items that make up the profile of any product.

A real estate development product, irrespective of whether it is residential, commercial or an industrial product has to go through the same process.

Because as I teach my development students … you are a manufacturer of a real estate product that the market must “love” in order for you to make a profit, develop a reputation and build a business.

It is for this reason that the single most important thing you can do in preparing for a career as a developer is to study the entire process from another professional who has been down the track on which you wish to trod.

The last example of the kind of real estate development risks to consider is entering into the development business without a development system.

Let me refer back to the beginning of this article and the buying of land that may be incorrectly zoned and buy it with the wrong finance. Let’s say that has happened.

Can I tell you that from that day forward … that is every day … the question asked is …”What Do I Do Next?”

By not knowing what to do next you are adding ‘Time’ to your development project and Time is costing you mortgage money that you incorrectly have to pay every month out of your disappearing capital.

Can you see how bad it can get by not be educated in the business and having a development system or as I call it a Development Road Map. No more asking … “what do I do next?”

Real Estate Development – Three Ways to Control a Property Development Site Before Buying!

Real estate development projects begin with identifying potential development sites. Doing your homework at this early stage is vital to reduce the inherent risks as much as possible. We’ve found that by controlling the site effectively it can reduce the costs and risks associated with real estate development.

Once we have identified a promising site, we check that there are no potential restrictions on the land that could prevent the development project from proceeding. Once we’re confident that it will be a viable development, we try to tie-up or control the property as soon as we can.

An important part of our feasibility process is to work out our “residual land value”. This is what the land is worth to us, based on the final outcome and the profit we stand to make by developing the land. This figure can bear very little relationship to the asking price for the property, which will usually be based on the real estate agent’s estimation of its value to owner-occupier or investor purchasers.

After we have let the agent know we’re interested in the property we prefer the seller to start the negotiations. Wherever possible we like to purchase from motivated sellers. There are simply too many opportunities and it’s unnecessary to waste valuable time trying to negotiate with unmotivated vendors. If you’re not good at negotiating, you may wish to consider a Buyer’s Agent.

We usually start our offers below the residual land value that we calculate in our feasibility study. While the final price is important we also look for value, which may mean having our savvy property solicitor come up with favourable terms and conditions.

Like most investors we love to grab a bargain, however, if it’s the right site and the numbers prove we’ll turn a decent profit, we’re always prepared to pay a fair price, based on our residual land value which is what the land is worth to us.

The best scenario is always a win/win situation for both parties. The residual land value we have calculated may well be more than the vendor’s reserve price, because we plan to add value. In that case, we can usually comfortably agree on a price which makes both parties happy.

We never get emotional and only proceed if the numbers work.

There are several creative purchasing strategies which can help to make a development project easier, more profitable, or both.

Delayed settlement

This is probably the most common way of controlling a site. Normally, but not always, a higher purchase price is paid in exchange for a delayed settlement. It is our aim to have our development approved during this time which gives us the ability to on sell the property at a higher price with the development approval in place or start our development soon after settlement, saving on interest payments and other holding costs.

Joint Ventures with the Land Owner

Typically, the Owner may agree to exchange his land for housing unit(s). An independent Valuer/Appraiser is normally engaged to determine both the land value and the new housing unit value and, if they are not of equal value, a monetary adjustment can be paid when the development is complete.

We find Joint Ventures are a great way for newcomers to get started, as it allows them to share part of the profits while sharing part of the risk. Of course, you must always obtain proper legal and financial advice to protect your best interests in such an arrangement.

Property Options

An option is an agreement with the Owner where, for a relatively small non-refundable fee, a developer has the right, but not an obligation, to purchase the property by a pre-determined date. This usually gives a property developer, time to obtain a Development Permit approval. Options also allow real estate developers to “lay by” a property and buy it at a later time if they wish to so so.

Adrian Zenere is a Registered Architect and Licensed Builder with over 25 years experience in the design and construction industry along with his wife Amber they have built a multi-million dollar property portfolio through Real Estate Development. Together they run their own architectural practice http://www.archizen.com.au specialising in Holistic Architecture combining eco sustainable development with feng shui principles and creating harmonious living that is respectful of our environment. Their projects are regularly featured in the Australian Property Investor, Luxury Home Design, Lifestyle Magazine, Home at Yellow and several newspapers.

Advice For Today’s Real Estate Development Firms

Many real estate development firms are taking a careful approach to dealing with potential projects in today’s markets. With real estate on shaky ground, a conservative tactic is likely to be the one that will pay off in the long run. Keep in mind, however, that development firms are not shuttering their doors or walking away from the market. They are simply retooling their efforts in regard to construction and development.

So, how are today’s successful real estate firms holding their own in this time of economic trouble? Many are taking these approaches:

Focusing on preparation work – Some developers are simply using today’s lower prices to prepare for the future. This means they are buying up tracts of land to develop on down the road. Much like the land barons of days gone by, they are purchasing – but not building – on speculation.
Site work – In some locations that are known for traditionally hot real estate markets, developers are preparing their sites for construction, but stopping short on the bricks and mortar. This action will enable them to jump right in with new residential developments as soon as the market turns. The idea here is to have the latest, greatest development on the market as soon as the economy turns around.
Zeroing in on needed residential – As more and more homeowners are losing their property to foreclosure, some real estate developers are trying to cater to their needs. Condo and apartment complexes, for example, that will accept people with shaky credit are in high demand. Some development firms are stepping in to build housing that will fill the needs.
Commercial development – While residential development has all but bottomed out, commercial construction continues in many areas. Development firms are finding new life blood building shopping centers, office complexes and other similar buildings.
Government work – Some developers are working closely with government agencies to help fill their needs. As many government construction projects continue through despite the economic downturn, this avenue is a solid one for keeping work going and people employed. This is precisely why many government agencies are continuing to build. Smart real estate development firms are filling the needs on this front.