4 Ways to Develop A Property for Profit
If you want to earn massive profits in the shortest time possible, property development is one of the highly lucrative businesses in the world.
Whether you’re working as a property developer in the United States or performing raw land development in the Middle East, property development can help developers make an impressive amount of profit.
If you’re looking to venture into this lucrative business, we have got some solid advice for you.
This blog uncovers the concept behind property development, what it is, how to do it right, and turn raw land into a profit-making machine!
What Is Property Development?
Simply put, property development is the art of taking raw land or buildings, developing them, and turning them into a high-value property.
Developers are tasked with the responsibility of adding value to a piece of land. Here’s how they do it.
Property developers invest in a piece of land or a building, either refurbish or develop it to make it more lucrative or withhold it to appreciate its value over the coming years.
Property Profit—How To Develop Properties For Profit?
Before they jump into the development business, property developers need money to make more money.
These developers need to put down down payments for raw lands or buildings, increase their value through subdivisions and renovations, and then introduce completed projects to interested buyers. Even though property developers make an increased return of investments by withholding property or raw land by letting it appreciate over time. However, there are several ways to improve a property’s value and return on its investment.
Subdivisions Of Raw Land
Raw land might not seem like a profitable investment; however, it’s the first step to a successful property development career.
Real estate investors can invest in a piece of land and create subdivided blocks out of it.
How does a simple process of sub-division make hundreds of thousands of dollars worth of profit? Well, here’s how.
For instance, a real estate investor invests in a large block of land that measures 1000 square meters for $400,000. Since most buyers aren’t interested in purchasing 1000 sq. m of land, the developer can subdivide the land into five, 200 sq. meters of land. They can then proceed to evaluate this land at $200,000 for each 200 sq. meters block.
With sub-division, all that a property developer needs to do is subdivide the land into smaller blocks of land and sell them off to buyers at a much higher value. This way, the property developer withheld the parcel of land, subdivided it, and sold it off for $600,000!
Renovating And Flipping Real Estate Properties
Renovation or refurbishment is another value-adding strategy that never backfires!
Even if you aren’t a renowned property developer, you can always get into this bankable business by renovating your own property!
Property developers can purchase unfurnished dwellings or buildings, equip them with the latest amenities, furnishings, and feature contemporary interiors to make the residence look more up to date and valuable.
Updating kitchens, bathrooms, installing new cabinets, adding further details, and marketing these buildings to the interested buyers will ensure that property developers receive a sizeable profit.
These property developers or real estate flippers can set a high selling price on these buildings and include the cost of the building, furnishings, and their own profit.
Real estate developers can partner up with investors or opt for hard money loans from credible private lenders to initiate renovation projects. These hard money loans do come with high interest rates; however, they can be repaid within a short time frame and make a perfect financing option for real estate investors.
Constructing Residential And Commercial Properties
This value-adding strategy takes property development to the next level!
Developers can begin by buying a piece of land, partnering up with investors, offering them equity in the finished real estate project, and hiring a builder to oversee the construction phase. This strategy entails that developers design and develop residential or commercial buildings atop a development site.
Real estate developers can construct apartments and dwellings according to the local zoning codes, market demands, planning regulations for the area, and the developer’s budget.
Developers can take out bridge loans to secure the real estate deal, take out hard money loans to complete the development project, and sell it off to earn massive profits and repay their short-term loans.
These hard money loans are ideal for real estate investors and property developers who need immediate cash flow to guarantee that their property development process doesn’t come to a complete stop!
Commercial And Residential Rentals
Another way property developers can create a lasting income stream is through developing property for rentals.
Once they have utilized their value-adding strategies, real estate developers can choose to keep the property and not sell it. This way, they can subdivide their renovated or newly constructed property into various dwellings, rent them out to tenants and enjoy a steady source of monthly income without any expense! They can also make these dwelling into vacation rentals, residential rentals, or even commercial offices. These tenants will pay a fixed amount of rent every month, which ultimately goes up with the rising inflation and continues to benefit the real estate investors!
Moreover, they can quickly liquidate their property and sell it off to interested buyers if they need a significant return on their investment.
Are you on the lookout for a commercial hard money lender in Atlanta, GA? Commercial Private Equity has all the right real estate financing solutions for you!
From offering commercial hard money loans to lending bridge loans to homeowners, real estate investors, and even large corporations, Commercial Private Equity has been serving the real estate industry for the last 75 years. Our company works with borrowers on drawing up suitable terms for their hard money and bridge loans. Moreover, we offer a no-cost application process to our clients and have one of the lowest interest rates in the country.
You can get in touch with our team to learn more about our commercial hard money loans and secure one at the earliest.