Real estate development projects are notably complex, risky, and often lengthy, and the journey from conceptualization to completion is dotted with obstacles. What's more, project managers, architects, builders, construction managers, designers, land surveyors, and legal teams are only some of the key players involved in real estate projects.

To manage all this, it is crucial for real estate developers to have a clear idea of what the journey ahead looks like.

Below are the key stages of every development project and a few critical strategies to keep everything moving smoothly.

 

1. Pre-Development

Every real estate project starts with the pre-development phase. During this stage, the teams involved carry out their due diligence, complete analytical research, and ensure that the project will be compliant with local laws and regulations.

What's more, real estate developers build a network of contractors and third-party service providers and select the type of property to develop. Other key steps to be completed during the pre-development phase include budgeting, carrying out feasibility studies and environmental assessments, analyzing the market, obtaining the necessary permits, and acquiring the property or land to be developed.

 

2. Construction

After the permits are obtained and considerations about the property development are completed, the second step each real estate project goes through is the construction phase.

During this stage, developers will work with architects, investors, and construction companies to complete all construction tasks and ensure that the property is built to the predetermined safety and efficiency standards.

Although this phase carries fewer risks than the pre-development phase, a lot will depend on the ability of developers to secure funds, calculate returns, arrange permanent and temporary financing, and keep up with the set construction milestones.

 

3. Operation

Once the property is built, developers need to deal with the last challenge: ensuring that the property is occupied and yields the expected returns. During the operation stage, the parties involved will work with marketing agencies and real estate brokers to launch a marketing campaign, find buyers or tenants, determine a hold or selling strategy, and stabilize their occupancy level (usually at a 90% level).

Due to the financial and occupancy risks that this phase involves, developers can often benefit from working with specialized property managers.

 

How to Keep Everything Moving Smoothly Throughout Different Stages of Development: 3 Key Strategies

As seen above, the key phases of each real estate development carry inherent risks, which, at best, can delay the project and, at worst, it can lead to failure. The strategies below are critical for developers to maximize their chances of success.

 

Investing in Real Estate Development Software

Although real estate development projects are highly complex, new technologies can help. Real estate development software solutions such as the ones designed by Northspyre can help developers manage all aspects of a project - including budgeting, timelines, labor, and permitting - from a single interface.

 

Managing Costs, Risks, and Timelines

With real estate development projects lasting anywhere between six months and six years (or longer!), it is crucial for all parties involved to have a system in place to manage risks, costs, and timelines.

Liaising with the different contractors and thoroughly understanding the risks that each phase of the project carries can help developers safeguard their investment from unexpected obstacles.

 

Maintaining Communication Channels Open and Encouraging a Proactive Mindset

With multiple parties involved with any real estate development project, maintaining high standards of communication is critical to success.

Cloud-based solutions, Building Information Modeling (BIM) systems, electronically-stored information records, and the employment of technologies such as VR and blockchain can help developers support proper communication and ensure that data is readily available to the different parties involved in the project.

But don't forget that no two projects are exactly the same, and each might require a unique, proactive approach that will help developers overcome unprecedented challenges and inherent risks.