Single family homes have supported the real estate and construction industries for as far back as we can research. While bigger buildings make for a nice payday, most professionals in these industries have made their consistent payments working on small family homes, usually anywhere from one to four bedrooms. The construction and repair work these homes require can keep a small construction company and developers busy for years. However, times have changed and it seems that contractors and developers are all making their way to the bigger projects.
Real estate professionals and developers are focusing on bigger projects that include industrial buildings, offices, retail stores, hospitals, schools, condos, apartment buildings, storage units and more. Each property is needed within the community and therefore has a higher demand and perhaps, a higher payday involved.
Why Developers Are Done With Single-Family Units
Think of the work that has to go into building a house. Now ask yourself, where can you build a new house that makes sense financially? The fact is that most areas that are prime for new homes already have older homes in them. That means developers will have to buy, tear down and rebuild, all before even being able to think about selling or renting the property out for a smaller profit margin. Instead, developers and contractors have focused on the bigger projects to avoid issues with:
- Low budget: Someone who wants to get a house built may have issues with the financing and that means bringing the project to a crawl, having a constant struggle with getting approval on materials and so forth.
- Communication: Believe it or not, communication on a multi-million dollar project can often go a lot smoother than with a smaller project, especially a single-family home. The reason is because on bigger projects, the clients, the contractors, the advisors and everyone else involved knows what they need to do, what the job will require of them and how to complete their tasks. Smaller projects rely on people who can take on more roles and that leads to mistakes from inexperience or having too much on your plate.
- Neighborhoods: Believe it or not, neighborhoods are a big reason why contractors are heading to the commercial jobs. Trying to remodel or build a new home in a neighborhood can be a major headache, even with something as simple as parking.
- Tax incentives: Some states are offering tax breaks for people who upgrade their properties. Major commercial projects can actually get even better deals, in some cases, from local and state governments. The reason is because the project is improving an entire area, while creating jobs.
- Return on investment: It’s ok to admit that one of the reasons to make a change in the way you do business is because it can make you a lot more money. Larger developments usually mean larger paydays for the contractors, property owners and others involved.
- More property options: Finding the right house or piece of land to build on can be tricky as inventory remains low which is keeping the prices higher. However, every community has an area of their town where land can be purchased and built on for a much better price per square foot, especially when you consider potential profits. Additionally, you can select a larger property and find multiple uses for it rather than just a single use.
- Local support: Communities will want to see the area improve and grow and that does not often happen without the help of developers and investors. Local support is usually high for improvements made like this, especially if it is on a property that needs to be badly upgraded.
- Community need: Again, local support is key in situations like this but it can also help you to improve your chances of not only getting approval on purchasing, licenses and more, but it can also help you with getting things like funding, renters or businesses that want to set up shop on the property and more.
Construction workers have also taken an interest in commercial work, finding the jobs to be steadier. The more the demand and opportunity continues to go up for these types of businesses, the more the need will be for workers in this area.
Real Estate Development Entitlements, What You Need To Know
One of the benefits of hiring real estate development advisors is that you can have an expert team with you every step of the way. Along with hiring and managing contractors and subcontractors, advisors can assist in a number of other areas including entitlements. Real estate development entitlements include working in areas like:
- Rezoning: When a property is previously planned to be used in a capacity that is no longer an option or in use, rezoning the property for new use allows you to begin development plans to determine what type of use the property should now have.
- Permits: Following all city and state regulations are a must, especially when it comes to larger projects like this, That’s why your real estate development consultants will manage all permitting and work with the contractors to ensure that inspections are passed and the project stays on schedule.
- Design: The design of the new property will be influenced by what the local authorities deem the property can be used for. All of these aspects including where the buildings will go, parking and so forth, need to be considered and addressed when the design is being done.
- Road & utility: Shutting down roads and tapping into the city’s utilities means you have to make sure that you are following all regulations and doing everything by the book. Any mistakes can lead to major delays in the project which is not an option.
Larger projects will usually mean a higher profit margin for contractors and developers. However, without the help of the right team it can also mean more headaches and issues. That’s why working with the right consulting team in Portland Oregon can make a world of difference and help keep your company busy for years.