Everyone needs somewhere to live, and if a person isn’t buying their own house or property, then they’re renting a place instead. Renting a living space is common among young adults who cannot yet afford a house, or for anyone who has a highly transient or mobile lifestyle. Fortunately, the real estate business is a big one, and countless entrepreneurs are looking into real estate development methods to build up these properties and make a profit off of them. By means of real estate development, an investor can generate passive income, and collect rent from their tenants. Of course, any business founder who’s getting into real estate must know what they are doing, and all the risks involved. Just how big is the real estate development field today? How is this done?
Real Estate Development by the Numbers
Any entrepreneur looking to get into real estate development can rest assured that this field is a robust one, and often highly lucrative to those who can navigate it correctly. Often, investors who get into this business rapidly expand their operations, and continue to make a lot of money. A recent survey done by Better Homes and Gardens Real Estate showed that 89% of American investors want to put money into real estate, and since the year 2000, real estate has outperformed the stock market nearly two to one. Residential real estate as an asset class weighs in at $29 trillion, and the commercial sector adds $10 trillion more. In fact, 97% of real estate investors report an intention to boost capital allocations to real estate within the next 18 months. Finally, a great number of people say that if they can get access to proper real estate development guidance and professional help, they will dive right into this field and try to make their fortune.
Finding and Improving Properties
Someone who wants to get into real estate development is urged to scope out the field carefully, and see which properties are available for purchase as an investment. It may also help to try and figure out how many people in the area would be interested in renting out these properties, such as college students and other young adults who need affordable housing. After all, no investor would get ahead if they bought some properties, only to fail to find any tenants to put in them.
Assuming there are enough potential renters, the investor may now consult real estate websites, apps, and companies for guidance, and compile a list of properties that are available for purchase. Scouting out these properties online is a fine start, though the investor must also visit each property in person and assess them carefully, to see their state of repair and not any outstanding maintenance issues. This may range from noting a leaky roof to old and drafty windows to drywall stains or faulty electrical sockets, and much more. If such a property is purchased, then the owner may now hire repair experts to fix anything and everything they can. And if the investor can afford to, they can have some remodeling done too, especially for the kitchen and master bathroom. The front and back yards (should they exist) should also be tended to, such as cutting overgrown grass or planting new grass if the lawn is bare. Trees and shrubs can be planted, too.
An investor’s portfolio can slowly and steadily grow, and they can keep buying new properties as needed. But it’s also vital to track all this, so the investor should use apps to keep everything organized. Such real estate apps allow an investor to get alerts (such as outstanding repair needs that the tenants report), or keep track of rent payments. With these apps, the investor can communicate with repair crews and their tenants, too. Meanwhile, these apps can be used to find other, new properties for the investor to look over and consider adding to their portfolio. An investor can adjust the settings so that only properties within certain parameters will appear in searches and alerts. For example, parameters for bedroom count, square footage, location, or price, so the investor won’t be bothered with properties that they wouldn’t want to buy anyway.