Many people are drawn to the real estate industry for its promise of wealth and stability. This is all justified if you take a look at the benefits of investing in real estate. But what about going beyond just being a real estate investor?
While a real estate investing career can be one of the best ways to make money in real estate, there are other routes. You have a few different options like becoming a real estate agent or even a real estate developer. With the various options, you’re lead to ask: “Should I become a real estate developer?”. The only way to decide is to get the answers to the following questions:
- What is a real estate developer? What does a real estate developer do?
- How can I become a real estate developer?
- What traits do successful real estate developers have?
- What kind of financing do I need to become a real estate developer?
- How much money will I make if I become a real estate developer?
In this post, we will answer all of the questions that will help you confidently decide whether or not you should become a real estate developer.
What Is a Real Estate Developer? What Does a Real Estate Developer Do?
You can probably imagine how many people are involved in building projects. But ever wonder just who is the top manager when it comes to the building of real estate? Well, that would be the real estate developer. Many confuse a real estate developer with an architect or even a real estate agent or investor. So, let’s break down what a real estate developer does in a few simple steps:
- Real estate developers find and buy the land for real estate development.
- Next, they must put together a team of experts (engineers, architects, lawyers, etc.).
- With the help of this team, real estate developers must get all of the legal paperwork and approval to start the real estate development project.
- Step #3 includes securing financing for the project as well (which is different from investment property financing).
- The last step requires full management of the project; real estate developers get contractors/builders to begin and oversee everything, either directly or through delegation to the team of real estate experts.
Should I become a real estate developer? As you read each section in this post, you should begin to form the answer to this question. While we have simplified the job in 5 steps, does it interest you? Do you have what it takes to be a leader in the development of real estate investment properties?
How to Become a Real Estate Developer
The next step to determine if becoming a real estate developer is the right path in real estate investing for you is to know exactly how to become a real estate developer. There are two ways to go about this:
How to Become a Real Estate Developer with a Degree
One way to become a real estate developer is to get a bachelor’s degree first. You may already have the proper bachelor’s degree, as there are a few fields of study which can be the foundation for a career in real estate development. Consider a degree in one of the following:
- Civil engineering
This is a short list of degrees to become a real estate developer, of course. There are others, still, that could provide the right education and skills a real estate developer would need to be successful. For example, a degree in civil engineering can teach you how things are built in the real estate investment world. An education in business or management will teach you problem-solving skills, critical thinking as well as how to be a successful manager of real estate development. Even additional English/public speaking courses (or courses of the like) can help develop other key traits that successful real estate developers have, like communication.
If you have a degree that you think has prepped you for a real estate development career, then look for entry-level positions in real estate development firms. This will provide the next step in your education on real estate development: real-life experience. With enough time, you can become an independent real estate developer.
How to Become a Real Estate Developer without a Degree
There are other ways of becoming a real estate developer besides getting a bachelor’s or master’s degree. The best way of how to become a real estate developer without a degree is to start off in another field of real estate investing. Become a real estate investor or a licensed real estate agent. In this way, you not only don’t need any kind of degree, but you can get the right kind of knowledge and build some experience for becoming a real estate developer. You’ll learn all about the real estate market, what makes for the best real estate investments, and you’ll even build a real estate investment network if you’re at it long enough.
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Once you gain some knowledge on real estate investing and build a track record with a few investment properties, small real estate development firms will be more willing to hire you and allow you to work your way up to becoming a real estate developer.
Should I become a real estate developer? Now that you have a better understanding of how to get into real estate development, decide which path is right for you. Do you already have the right kind of degree or are you willing to continue your formal education to become a real estate developer? If not, then focus on how to become a real estate developer without a degree. Either way, you have two great options for how to get into real estate development, bringing you one step closer to becoming a real estate developer.
Top Traits of Successful Real Estate Developers
However you decide to become a real estate developer (with or without a degree), there are certain traits and skills all successful real estate developers have.
Whether you’re interested in how to become a real estate developer without a degree or with one, you will need research skills. Finding the right real estate market for a piece of land to build real estate investment properties requires a lot of time dedicated to research, even after you are well into your real estate career in development.
Want to learn the basics of research in real estate investing? Start with an investment property calculator. An investment property calculator will help you determine where the best real estate market is and why based on existing real estate investment properties. From there, you can begin to determine where to start a real estate development project in the future.
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
The term “leadership skills” is very broad, yet appropriate for describing one of the top traits of successful real estate developers. As mentioned, a real estate developer is the top manager of these kinds of projects. Without leadership and management skills, how will you be able to point your team in the direction of success?
While technically in the broad group of leadership skills, communication skills deserve their own spot on the list of top traits of successful real estate developers. How will you assemble a team and be able to work with them if you cannot communicate clearly and effectively?
Analytical and Creative Mind
Even the most successful real estate developers run into all kinds of problems. Being able to think about them from both an analytical and a creative point of view will enable you to overcome such issues in real estate development.
If you do not possess the courage to take on the great risks of becoming a real estate developer, then this may not be the field for you. With traditional real estate investing, there are plenty of ways to minimize the risk. However, with this real estate career, the risks are high and the only way to minimize them is with the right knowledge, experience, and traits.
Why is the risk so high in real estate development? Even though there is a team behind every project, the full responsibility falls on the real estate developer. He/she makes all the calls and decisions (even more so than an architect!).
Should I become a real estate developer? You may find you already possess all of the mentioned skills in one way or another. If not, are you willing to work on honing such skills and traits? Successful real estate developers aren’t necessarily born, they instead create themselves with time and tremendous effort. Are you willing to dedicate yourself to becoming one of the many successful real estate developers?
Financing Real Estate Development
Getting into real estate development can be expensive if you don’t start off on the right foot. As mentioned, start by becoming a real estate investor or working for a prominent real estate developer. In this way, not only will you build the kind of track record both private and conventional lenders look for, but you may find partners or real estate investors to help with financing within the real estate investment network you are bound to build.
Should I become a real estate developer? Do you have the cash to get into real estate development? No? Then know it will take some time to build a reputation in the real estate investing community in order to find financing for real estate development. Are you willing to put in the time?
How Much Money Does a Real Estate Developer Make?
As with any real estate investing venture, the higher the risk, the higher the returns. Real estate development is a risky business, but if successful, you can build great wealth. To put an actual number to it, the average real estate development manager makes $88,493 a year. Of course, this will depend on the real estate development company you work for, the experience you accumulate, and whether or not you eventually become an independent real estate developer.
Is Becoming a Real Estate Developer Right For Me?
By now, you have all of the details to answer “Should I become a real estate developer?”. It can be a very rewarding real estate career if you put in the time and effort to start off on the right foot.
Alternatively, if the answer is no, consider investing in real estate investment properties. They, too, can be very rewarding and somewhat easier to get into. To learn more about all aspects of real estate investing, continue reading our blog.