Introduction:

Property has always been a hot topic when it comes to investment. Many people invest their hard-earned money in real estate and buy residential or commercial assets. But the investment becomes fruitful only when you consider some facts and take the right steps at the right times. 

Now the question is, are you interested in real estate investment?

If yes, then you are at the right place. We assume you are a beginner, so we will start from the beginning.

What is real estate?

Real estate is physical property; real estate is any property that is attached to the land. So, land and every immovable human addition to it falls under real estate; these include vacant land, farm, residential buildings, underground constructions, commercial buildings, factories and many others. 

This is how; estate property differs from personal properties like jewelry, vehicles, furniture and other moveable objects.

What is a real estate developer?

First, let us discuss what real estate development is. If we put it in simple words, then real estate development is facilitating the construction or deconstruction of real estate. Real estate is anything related to land and the things permanently attached to it. 

So, a real estate developer is a person who facilities real estate construction. This work involves arranging and coordinating everything related to the project; for example, financing, choosing the contractor, supervising the architect and dealing with sales and leasing agents.

Types of real estate developers:

There are generally four types of real estate developers based on real estate development.

Greenfield real estate developers:

Greenfield development involves developing underdeveloped real estate. So, a Greenfield real estate developer works on underdeveloped land and does his/her desired project. This type of work involves finding a plot, planning the construction, and executing the project. This type of real estate development needs a lot of funding. Apart from that, it may take a lot of time. 

Residential real estate developers:

Residential development involves developing constructions for living purposes. The main goal of these projects is to provide all the modern amenities that are needed for a comfortable home. These include proper water facility, electricity, proper transport facility and market reachability. Most real estate developers are Residential real estate developers.

Brownfield developers:

The word brownfield involves those lands where industrial developments were done but is now contaminated and left unused. So, Brownfield developers develop these contaminated lands and restore them to their original state. This work is just the opposite of Greenfield development.

Grey–field developers:

Grey-field development is synonymous with Brownfield development. But in Grey-field development, developers work with abandoned commercial sites instead of industrial ones. Unlike brownfields, Grey-fields are not contaminated, which makes them an ideal site to work with.

Things to remember:

There are numerous factors to consider when you are investing in real estate. These factors play key roles in making the investment a success. Here are some of the important things to remember when planning a real estate investment.

Property location:

Location is the foremost factor you need to consider. The location of the property determines the profitability of the investment. If it is residential property, then the required amenities, green field, market distance, school and colleges, and transport mediums decide the valuation of the property. Or perhaps you need a commercial property; then a quiet location with a low-density population won't generate enough profit.

Another point when considering a property location is the long-term view regarding the development of the area and the neighborhood. Suppose you bought a residential property, and some years later, someone establishes a noisy factory near your property, diminishing the value. So thoroughly inspect the property location before investing.

Valuation of the Property:

Valuation is another key factor in deciding on a property. If you want to finance the property, then property valuation is important. Always research the market valuation, then calculate the base valuation to determine the taxes, extra charges, insurance, and depreciation. Always compare the valuation of your property with similar properties to get an idea.

Purpose of investment:

• You need to decide the purpose of your investment. The lack of clarity on purpose may lead to unsuccessful investment. There could be many purposes for a real estate investment-
• You may buy a property for self-use. This will save you money on rent. Whether a residential or commercial property, owning it makes a difference in profitability in the long term.
• You may also buy a property to earn passive income through rent. This will get you a long-term value appreciation.
• Liquid money is a big concern in the real estate business. So, you can also buy a property to sell it after some time, generating medium to large profit. This profit depends on many factors like a short-term or long-term investment, market value, depreciation, etc.

Chances of Profit:

First, you are investing in a property to earn a profit. So you need to calculate the profit opportunities before investing. There are several ways you can generate profit.

• You can expect cash flow from the rental business.
• In the long term, you can expect an increase in your property's value due to your neighborhood's development.
• You can also earn an extra profit by renovating the property before the sale
• Investing in an old real estate property provides you with the benefit of depreciation.

Background check of the property:

You need to check the legal documents of the property before investing in it. These include the registration details, status of the property, the liability of the real estate developer, and time of possession if it is an old property.

Conclusion:

Any kind of financial investment in any field carries risk factors. In recent times real estate investment has been the safest investment you can make. But you need to consider these factors before your investment.