To be successful in your chosen field is very hard to ensure. Every business is such a risky thing. You will be giving your money without the assurance that you’ll gain your money back or you’ll lose it along the way. Many of the businessmen find investing in real state to be a profitable one; regardless of a property developer or a property investor.
If you are one of those who are aspiring to be a successful real estate developer or a successful real estate investor; then you may consider the different characteristics that may help you to achieve your goal. These characteristics may be your key factors in achieving a positive result in your chosen field of business or investment.
Before we talk about these characteristics of a successful Real Estate Developer and a successful Real Estate Investor, let us first define these two fields and the things that you need to know about them before you decide if you are really into business or investing in real properties.
In this article, you may get more knowledge about how these two fields work, what are the things that you needed to make your business to work and to be profitable, the things you need to prioritize in managing this business, the characteristics that you need to organize the business and many more.
To start, let us first define these two fields; real estate property development and real estate investment. We will also discuss the things that real estate property and real estate investors do.
Real Estate Property Development | What is a Property Developer?
Real estate property development is a process of building properties like houses, schools, hotels, apartments, beach houses, residential towers, office buildings and the like to generate income through the people who are buying or investing in their properties. It is also defined as the process of integrating tangible improvements (adding value) to real property.
Real estate developers have many roles to play and responsibilities to take care of. These are some of those responsibilities that you might include in your list if you want to be a real estate developer.
Key Responsibilities of a Property Developer
- Make a project plan.
- Conceptualize the plan and coordinate with the working team.
- Ensuring that all the things planned will be on the right track.
- Deciding whether to accept or not the changes in the things planned when not everything works well.
- Keeping regular updates with the progress of the project to the working team.
- Managing project finances.
- Writing business proposals.
- Gaining authority and approvals for developments
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Most of the time, property developers are also property investors. So, the above is in addition to the responsibilities of property investors, which we will look into below.
The above are the key responsibilities, but not limited to these, of a real estate developer. Not to forget under each responsibility, there will be multiple sub-responsibilities and tasks. Still, every business would be easy if you know what you are doing, and you have someone to help you with it.
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Real Estate Investment | What is a Real Estate Investor?
Real estate investment is the process of investing your money in real estate properties; either landed house, condominium unit, or business premises. This requires great decision skills as you have to choose which one is best for you based market moves, political trends (macroeconomics), local trends (microeconomics) and your investment strategy.
The landed house may give you the option of larger space and more privacy. You can do whatever you want to do here. You can even remodel it if you want to, but as said, you entirely own the place, meaning you also have sole responsibility for the maintenance and managing the renting.
On the other hand, condominium units are easier to lease out than landed houses, especially in big cities. But the main con of condominium is the association’s fee which every condominium owners need to pay. These are in addition to maintenance and managing tenants.
There are 3 key roles of a property investor, which as to:
- Buy new property,
- Manage tenancy of the existing property portfolio, and
- Sell your property.
According to the above three key roles, the investors’ responsibilities differ as noted below.
Key Responsibilities of a Property Investor
Now, let us discuss the main skills and responsibilities of a real estate investor. Here is the list that you may need to look if you decide to be a real estate investor.
- Applying the knowledge about the contract, the property and insurance laws.
- Accessing the services of media advertising.
- Analyzing financial data (applying advanced business math just like accounting, finance, statistics, MIS, etc.).
- Applying the principles and theories of financial management.
- Understanding government real estate sales regulations.
- Work with lawyers and conveyances to prepare legal documents such as contracts and agreements.
- Applying the knowledge of economic trends.
- Applying knowledge of written communication in sales work.
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- Applying real estate terminology.
- Arranging teleconference calls for meetings.
- Maintaining records, reports, or files.
- Able to attend seminars for continuous learning about the real estate market.
Responsibilities of Managing Rental Properties
Responsibilities related to managing your rental properties are below.
- Making presentations for potential rentals (or buyers) including the advising to your clients (potential tenants or buyers).
- Find ways to advertise your property. You may advertise through newspaper or TV ads.
- Interviewing possible rentals and screening their documents to know if they are qualified.
- Able to answer the client’s queries about how the property’s quality. They may ask you about the maintenance process, the financing, appraisals or even repairing process. You should know how to answer all of those.
- Regular Inspection for property’s overall quality.
- Collecting fees and rents.
- Maintaining harmonious relationships with your clients (tenants).
- Negotiating real estate rental contracts.
- Investigating the client’s (tenants) background in finances and credit status for you to determine if the tenant is eligible to rent your property.
- Collects the deposit of rents from the clients (tenants).
- Secure great contacts such as with utility companies or contractors for the emergency maintenance problem of the property.
Responsibilities related to Selling Real Estate
Responsibilities related to selling your real estate are below
- Scheduling real estate closings.
- Applying interpersonal communication techniques such as sales techniques.
- Appraisal of the value of a real estate.
- Selling real estate property to clients (potential buyers).
- When you purchase new real estate, you have to be investigative if the client (seller) has a clear name and title for his property.
- Educate your sales agents so that they can have more sales techniques for them to get the sale/s fast.
- Inspecting (pre-purchase inspection) the property and informing the owner of necessary repairs and maintenance.
These are the skills and the tasks that you need to do if you do not have someone to help you. But you can Hire a Property Manager
for you lessen your work; just make sure to look for a responsible one. For you lessen your work; just make sure to look for a responsible one.
Property Developer vs Property Investor | How Real Estate Developer Differs from Real Estate Investor?
We already have defined real estate developers and real estate investor, but what is the difference between the two. Their similarity is simple; to generate money through real estate. Their difference is on how to evolve on their goals, the processes that they are going through and of course, and their responsibilities in ensuring their business.
A real estate developer makes money by buying land where he/she can build properties on it like houses or apartments. He/she can also buy a property that needed a major renovation. Simply explained, real estate developers build properties from nothing.
Real Estate Developers major task is to build properties or adding value to the property, where real investors mostly purchase properties and hold them for the long-term.
On the other hand, real estate investors are the buyers of the real estate developer’s projects. Often than not, they are buying the properties that are already developed and established. Their main role is to find tenants for the property they bought from the real estate developers or regular sellers. This way, they can grow money from their investment.
Role Models of Successful Real Estate Developers
To be a real estate property developer is not an easy-money business. You need to give extra effort and an extra piece of your time just to make sure is fine. Most likely you may need to work full-time in the field to be successful. You need to be knowledgeable enough about how the processes work.
These are the things that are present in the people that I will be introducing to you. They are the names that make it big in this field. They are the most successful real estate developer in New York. Let us know them one-by-one and be inspired by their stories of success.
1. Wang Jianlin
He is a Chinese-citizen known to be the richest real estate personality in the world. He has an income of $28.7 billion, which is his net income.
Mr Jianlin started in the real estate industry as a developer in which he builds hotels and shopping plazas.
Another two companies have been added to the list of his properties as he opened them in public. These are the Wanda Cinema Line which is a Chinese movie theater and the Wanda Commercial Properties.
He also announced that he will be spending $3.5 billion in buying a famous TV production company and American films. This move will surely be adding a great sum of money to Wang’s account.
2. Lee Shau Kee
Mr Kee is from Hong Kong and is the second-richest billionaire when it comes to the real estate industry. He came from an average class of family which cannot afford to eat three meals a day. But his hard work, intelligence and will to make his business grow, made him one of the wealthiest men in the world.
Henderson Land Development leads his real estate business.
3. Michael Otto
Mr Otto came from Germany and has a net income of $15.4 billion.
He is the third richest in the real estate development industry.
His wealth and business are divided among his family members. Their business has been spread out throughout other businesses besides the real estate’s industry like in the internet and financial services.
4. Donald Bren
Mr Donald Bren is known to be the fifth-wealthiest billionaire in the real estate industry field in the world. He holds the title as the first richest American in the real estate industry. He has a net worth of $15.1 billion.
He owns the Irvine Company that manages hundreds of office buildings, shopping centers, thousands of apartments, hotels and golf clubs.
5. Stephen Ross
Mr Ross takes advantage of his knowledge of federal laws as he uses it to start his career in dealing with investors for real estate development. His net income has reached $7.4 billion. He uses his knowledge and experience in the development of high-quality buildings like apartments, office-spaces, and condominiums.
He is now working on the Hudson Yards Redevelopment Project which is the largest real estate development in America. This aims to transform the 28 acres of Manhattan into retail space and offices.
6. Richard Le Frank
Having a net worth of $6.4 billion, Le Frank also belongs to the list of the roster of successful real estate developer. His family started their family-owned real estate business in 1968. Being in real estate gives them a billion-dollar net worth.
7. Rick Caruso
Mr. Caruso owns the highest-grossing shopping center, which can be located in Southern California.
He has a net worth of $3.5 billion making him be included in the top richest man in the real estate industry.
8. David Lichtenstein
Mr David Lichtenstein has a net worth of $1.4 billion.
He was born to a public-school teacher parents. He has seven siblings that are the reason why he never had a chance to go to college. But because of his wit and will in this business, even his first attempt has gone because of bankruptcy, he still managed to be successful in his way.
He wrote a post entitled, “How to Make a Billion Dollars in Real Estate”, that truly shows how he managed to rise after a great fall.
Many more people are successful in this field that is not included in this article. But these people are yet the best real estate property developer that has been recognized.
Role Models of Successful Real Estate Investors
Real estate investors also play a big role in the real estate industry. At the same time, they also earn too much from their wealth.
But earning as an investor will not be possible in a day. You need to wait for the needed time when to generate passive income from your investment. You don’t also need to just wait, but you have to wait while doing things, buying more properties and managing the existing to make your investment successful.
In doing that, you might be interested in hearing the stories of the following real estate investors, who are the most successful in this field.
Let us hear their stories and make them our inspirations.
1. Donald Bren
Mr Bren is also one of the most successful when it comes to investing in real estate. He has a 110 million worth of real estate under his name making him be a multi-billionaire. He started his real estate business with a $10,000 loan in the bank.
2. Stephen Ross
Mr Ross is the chairman of the company that is responsible for America’s largest real estate project. That company is named as Related Companies. This company has developed over $30 million worth of real estate properties, spread out across the world.
These two gentlemen are the most known real estate investors who have been successful in their business.
Key Attributes of a Successful Property Developer
We have stated that to ensure that you will be successful whether you decide to be a developer or an investor of real estate properties; you need to have positive characteristics.
Here are the lists that we have gathered that may also be helpful for you.
Let us start with the real estate developer.
Real Estate Developer must have the following characteristics:
Ø Real Estate Developer has a vision and mission.
Any business has its vision and mission. This vision and mission serve as your guide on how to manage your business. Without them, you will find it hard to reach your goal because you do not have anything that guides you throughout the process. Vision is your goal and mission is your way of how you are going to reach your vision.
Every businessman needs to be knowledgeable not only on his business but on different fields in the market. You have to remember that the very first one who needs to know your business is you. Lack of knowledge might be one of your weaknesses that will hinder in achieving your goal.
No business had become successful without having a problem. Everyone experience a problem because it is a part of being successful. But you won’t be successful if you don’t know how to solve your problem. You have your friends and business partners; you can ask them for suggestions if you can’t think of any more way but as much as possible, solve it first for yourself. Practicing solving your business’ problems will eventually give you the courage to solve any problems yet to come.
Ø He/she has great connections.
Real estate business is not just about building property. It also includes communicating with different people like engineers, brokers, clients, buyers, attorneys, bankers, contractors, and many more. If you have great connections with these people, then probably, you’ll succeed in your business since you have many people to help you with their skills.
To have a good connection, you need to keep open communication with these people. Try to speak with them as often as possible and discuss with them the things that will make your business grow more. Not to forget to help them too.
Nobody had been successful without going out in their comfort zone. Always take the risk if it is worth trying for. Study all the possible gain or possible lose you’ll get. If the gain weighs more than the chances of losing, then you should take the risk.
The real estate field itself is risky. You might need to have lots of guts to succeed. Everything that is too-good-to-be-true things might not be your way into success. The harder the process that you’ll go into, the more chances of assuring that your business will succeed.
Whatever we have around us is a product of creativity. Every big thing starts with a small idea, which was thought in advance by developers. Those imaginations were put into the process and are now great products. That is the reason why a real estate developer needs to be creative because he/she needs to foresee what would be the in-demand features or designs of houses shortly so that it will still attract buyers.
Ø Industrious and persistent.
Great creativity and too much knowledge with no hard work will be useless. Be industrious and persistent until you reach your goal. Giving extra will receive extra. You should give you extra time and extra effort so that you can assure your business will succeed. To be industrious is not all about giving your time but using your knowledge into action.
Being confident is a big factor in assuring that your business will go well. No one will trust you if you don’t yourself too. Confidence will give you the ability for decision-making, problem- solving and risk-taking. You won’t do those things without enough level of confidence. Build your confidence as you build your real estate property portfolio.
These are not the only characteristics that you need to have if you want to be a successful real estate developer who wants to succeed but having these will be a big plus for you.
Key Attributes of Successful Real Estate Investor
Real Estate Investor must have the following characteristics:
Ø Great long-term planner.
Planning ensures the success of a business. Through planning, you can foresee the problems that you may encounter in the process and solutions that you can do to solve that problem. By planning, you can also design your techniques and strategies on how you are going to make your investment successful.
Being an investor needs to have lots of knowledge in different fields like in financial and accounting, real estate properties, economic status and a lot more. Having the best knowledge of the field you are dealing with is a great thing to ensure that you will succeed.
Ø Team player.
Since you are working with a team and you’re the leader, you need to remember that to be a good leader; you need to be a good follower. In this case, you’ll be a good team player.
Lead your team with a heart and not only as a leader. To be kind but with authority will ensure that your team will respect you and will follow your plans. Try to make open communication with them and ensure that you’ll hear their suggestions and make the most proper feedback on their actions.
Since you will have your tenants as your clients, you need to be honest. Try to open up with them the issues that you are handling the property and let them a part of your growth. Through honesty, you will establish a harmonious relationship with your clients, which would make every transaction an easier exercise.
Not only to your clients (tenants/purchases) but have you also needed to be honest with your team and business partners. They will be your best partners in doing the business.
Ø Be focused.
An investor who wants to be successful needs to have a great focus. Any problem must not shake him/her; instead, he/she must always be ready to solve problems. Being focus on anything that you are doing will be one of your great strengths. Always stay in focus and focus on planning the success of your business and investment strategy.
Real estate development is different from real estate investing. They are different in many things. These include the roles and responsibilities of the developer and the investor. However, most of the time property developers likely to be property investors too.
There are many factors to consider in achieving the success of your business. Investing your money in real estate, whether you’re a developer or an investor, is a risky thing. But you can lessen the risks if you know your responsibilities and you were able to do them properly. Keep in mind the things to be done, and focus on striving for your business success.
Another factor that can be a great help is having the best positive characteristics. Having the stated characteristics will not ensure the success of your business but surely, having those will be a plus point whether you are a developer or an investor.
I have stated in this article the characteristics that you should have if you want to enter this industry. These may not be all the needed characteristics, but having these is a great advantage.
There are lots of people who had been successful in these fields. They are the people who have a net-income of billions of dollars and still counting. Their stories were written all over the internet. You can search for them and let them be your inspiration if you are truly aspiring to be a successful real estate developer or real estate investor.
If you are asking if it is worth developing a real estate or investing in real estate, the answer is a big YES. But it is not as easy as 1, 2, and, 3. Everyone who wants to be successful in this field needs to have great courage and determination.
All of these are just guidelines. Still, to be successful in this field depends on your will and hard work.