The Growing Interest for Self Sufficient Real Estate Development
India’s metropolitan areas are growing at an alarming rate, due to which there has been urban reconnaissance within a metropolitan area. This is where self sufficient real estate development comes into play not just on the outskirts of major metros but also with better models of urban planning in the case of new cities. But on the other hand, to engage in real estate development, there are great financial opportunities due to the ever scarcity of land which will always be valuable.
The Value of Real Estate is the Value of Land
Land is one of a kind, be it location or the characteristics of land and hence, it is an invaluable and non perishable asset. Land in particular is unlike other possessions that depreciate; it is stable and cannot be misplaced, stolen or destroyed. This no loss aspect greatly increases a lenders liquidity, as they can use this stability to make sound investments.
Leverage as a Competitive Edge in Real Estate Development
Leverage which achieves more profit using borrowed money is what defines the real estate industry. More often than not, developers take in 75% of the capital in the form of loans from banks or private investors against the sold asset. This arrangement enables developers to enjoy maximum profits while not having to carry the full financial liability themselves.
#### Example of Leverage in Real Estate
The Developing of an apartment building with; say a large apartment complex that sells for 1 crore per unit. And if the total cost is estimated at 85 lacs per apartment and the financing taken out accounts for around 75%, that means one would spend only 21 lacs per unit. Then, considering that one apartment is sold at a profiting of 15 lacs total units sold would return a difference of 70% investment; increasing selection of real markets and other establishments such as stocks.
## The Insatiable Need For New Construction in India
As long as India’s economy continues to grow, there will always be a need for newly constructed buildings. This demand is justified by –
- Deteriorating infrastructure requiring upgrades
- Rapid Growth in Population and More People Shift into Cities
- A Change in Family Dynamics and things like Lifestyle
All of these factors mean there is always a demand for more housing, for shops as well as more commercial real estate and so it shapes the need for real estate development.
Real Estate Development as a Path to Self-Employment
In the eyes of those who dream of achieving financial independence, real estate development is an industry that makes sense. Presented with such challenges allows one to be creative and self-sufficient while helping them to not only be employed but also benefit society in return.
Elation of being Part of Something Significant
Real estate development is not only a lucrative venture but it is also highly satisfying. Essentially, they are working with the economy because they are able to employ individuals—starting from purchasing land to construction of the building—and add millions to the coffers of the state.
The Role of Different Players in Real Estate Development
There are four primary groups of individuals who are the main drivers of real estate development :
- Speculators: Acquire land that hasn’t been developed in hopes for infrastructure in that area to cause an increase in value of that plot of land.
- Subdividers: Operate in acquiring land and appropriate documentation needed for the development to take place.
- Land Developers: monitor and add all of the infrastructure needed in the plot so that development of property can take place.
- Builders: Finally create and build residential, commercial and industrial properties on these lands.
Full-Service Development Approach has its Benefits
A developer who takes care of every step from the purchasing of land till the building construction gets the true worth at that time.Likewise, this method enhances the overall worth of the project, streamlines financing and provides greater returns. Success in this domain however rests upon diligent analysis, careful planning and recruitment of qualified professionals as consultants.
Why Does Residential Real Estate Seems to be Good for Starters
Another great opportunity for novices is to venture into residential property development. Good market responsiveness and the ability to penetrate ideal markets makes residential undertakings an achievable scale while enabling the developer to start a good portfolio. The ideal “Dream Location” can in addition increase the appeal and profitability of a project.
For more information about Dream Location and to search your dream property, please visit Dream Location on Google Map. Contact us today to know more about the best real estate deals in Delhi and North India; we will connect you to the right property investment.