California has not taken the ongoing housing crisis lying down. The state has implemented widespread incentives and laws to foster rapid development in the housing sector, making every jurisdiction accountable for meeting local housing needs.
The city of San Bernardino alone has committed to building over 8,000 new housing units before 2029, and the rest of the Inland Empire of California is following suit. Rapid real estate development is a huge attraction for property investors looking to cash in on the demand for housing, but it's also fraught with complications.
As an Inland Empire properties investor, it's in your best interest to understand the development process and what it entails. Read on to discover more.
Key Components of the Real Estate Development Process
Real estate development differs from building a regular home in several ways. It involves overseeing the activities required to bring a property to market, from purchasing the land to presenting the units for sale.
In some cases, real estate developers may also undertake major refurbishments of existing buildings and coordinate all the activities involved in bringing residential or commercial units to market.
Property development includes a creative process across several phases. These are the key stages of the development process:
Conceptualization
This part of the project begins with ideas. Developers carry out extensive market research to identify opportunities and earmark potential land for their property development.
Securing the land is a crucial first step, as all the other phases depend on its layout and location.
Planning and Design
At this stage, developers work closely with architects and engineers to bring their projects to life. They compile detailed designs, estimate quantities, and set up a budget for their project.
Once they have detailed plans in hand, they must carry out the lengthy permitting and approval processes. It can take up to 60 days to complete this stage and often requires a few adjustments along the way.
Financing the Project
Once the developer has achieved the necessary permissions, they must commence with construction within 12 months. Developers usually finance their projects via building loans, debt financing, syndicated debt, or equity financing.
In some cases, they may involve property investors at this stage or sell some homes off-plan to get the ball rolling.
Construction
During this phase, the real estate developer usually fulfills the role of a project manager. They plan the work, hire the necessary contractors, and ensure the building costs remain within budget.
Marketing and Sales or Leasing
As the development starts to take shape, the developer starts to market it aggressively. They may target property investors, homeowners, or potential renters, depending.
Fine-Tune Your Real Estate Investment Strategy
The high demand for Inland Empire properties makes this a lucrative area for property investors, and new developments are a good choice for prospective landlords due to price stability and a high demand for new properties.
PMI Inland Empire has many years of experience advising property investors on how to grow their portfolios and maximize their profits. Whether you're interested in buying into a new real estate development or an existing property, we can help you make profitable decisions.
Let us help you find your way in the Inland Empire real estate market.
