Real estate development can be thought of as the basic foundation that holds together the real estate industry. Real estate development is the process of buying land for building different real estate projects (both commercial and residential). Real estate development is also responsible for financing real estate deals and coordinating the process of property development from start to finish.
The big question is what makes a real estate development successful and what are the traits of a successful real estate developer? Let’s find out!
What is a real estate developer?
Real estate developers need to find property/land which they can plan to develop real estate projects on. Their real estate projects may vary from commercial real estate to residential real estate. These two categories include everything from retail, office and industrial development to single-family homes, multi-family homes and buildings for apartment rentals.
A successful real estate developer can start out in many different fields. Some may start out as real estate agents, while others may begin their career in construction. After some time, they may raise enough capital to work with an urban or regional planner, architect, and builder to develop, build and market a project, such as a new condominium development. Or after some time, they can take on partners such as architects and financial asset managers who can assist them in developing their own projects.
What does a real estate developer do?
Real estate developers are the seekers, the buyers, the owners and the managers for the whole project. They are the ones who find and buy the land for the real estate development and prepare it for construction. They are responsible for putting together a team of experts. This team may consist of engineers, architects, and lawyers. Real estate developers have to prepare all the legal paperwork for the real estate development. And they have to secure the financing for the overall project. It’s certainly not an easy job but the money that real estate developers make is quite rewarding.
How much do real estate developers make?
One of the great ways to make money in real estate is through a real estate development career. Even though there is no concrete figure as to how much real estate developers make, what we do know is that they make more money than the other parties involved. So basically, they get the majority of the profit because they do the majority of the work involved. Additionally, the profit a real estate developer makes may exceed $ 1,000,000. Sounds good right?
You still have to keep in mind that there are many factors that influence the profit a real estate developer makes. For example, the type of project may impact the amount of profit. Is it a shopping mall or a residential apartment building? Another factor that influences how much a real estate developer makes is the amount of money that the developer took from a bank in the form of a mortgage loan. Also, you should always keep in mind that a single project might take several years before it’s finished and the developer doesn’t get paid until the project is completed and sold.
What attributes make for a successful real estate developer?
Getting an education or having a degree in real estate is highly recommended when wanting to become a real estate developer. It will make the procedure for real estate development much easier and a lot less risky. Why? Well, a real estate developer who has a real estate education will have more knowledge of the different obstacles he/she might face while working in real estate development. A real estate developer must have knowledge about the economy, the real estate market, building construction, and finance prior to starting a real estate development.
2. Builds strong relationships
A successful real estate developer never underestimates the power of having strong relationships. Developers need to build connections with lawyers, bankers, tenants, architects, engineers and general contractors. They need to build these strong relationships with different professions in order to form a successful team that will bring together a successful project.
To build strong relationships, a real estate developer must have excellent communication and interpersonal skills. He/she must be diplomatic and have great leadership skills in order to build relationships with others.
Creativity is the key to a successful real estate development. Real estate projects do not come to life from average performance but rather from immense creativity. Every real estate development project starts off with an idea. The idea might be relevant to an ongoing project on a site or on a larger scale of what a community needs. It is creativity that distinguishes one real estate developer from another. And it is creativity that gave birth to the array of projects we see today like skyscrapers, green buildings and other places where we currently work and live.
4. Tolerating risks
Risk tolerance is an important part of real estate development and an important attribute for successful real estate developers. Not everyone has the courage to take risks and that’s because not everyone can stand the possibility of things going not as planned. A successful real estate developer is one that can measure and calculate risks. He/she should also be able to find ways to mitigate risks.
5. Problem solver
Of course with all the major duties that a real estate developer must accomplish, problems are bound to happen. The trick is to understand that every problem has more than one solution. A successful real estate developer should be able to deal with tight budgets, adjacent landlords, state authorities and many other problems as well.
Tips on how to build a successful real estate development business
- Get the right college degree: To get the first right job as a real estate developer, a college degree is required. You can get a college degree in accounting, engineering, architect, urban planning or finance to name a few.
- Build your networks early: Build your networks early, either during college or once you enter this real estate business. To build your networks, you can attend local real estate meetups or real estate conferences. Your goal is to meet as many people as you can.
- Get the right first job: As a beginner real estate developer, you want a first job that exposes you to the maximum amount of development with the maximum possible learning speed. You can start by working for companies that already develop different types of projects.
- Get development internship: If you are having trouble finding a good job, then offer yourself up as an intern for a small development company with the purpose of gaining real estate development experience and knowledge.
- Get a mentor: A mentor is great to have by your side throughout your real estate development career to avoid pitfalls.
- Give yourself plenty of time to build your career: A real estate development project takes time to complete. That is why you shouldn’t rush to avoid making costly mistakes.
A final thought
Getting into the real estate development business is not an easy task. It takes a lot of knowledge and experience to call yourself a successful real estate developer. But with the right sources, you can learn everything you need to know about real estate development. Let your first step towards educating yourself about real estate development be with Mashvisor. Check out Mashvisor’s knowledge center for more than 2,000 blogs about every aspect of real estate.