Real estate development is highly regarded and considered as one of the best investment options in the market. The handsome returns in the business together with low risks make this business one of the best. However, it is not always cozy with real estate; the investment comes with its set of hurdles which investors have to overcome to reap the benefits the industry promises.
One of these hurdles is high initial costs associated with the business. Put simply, developing a commercial property in real estate is a very complex process packed with legal and regulatory challenges. Succeeding in this industry requires careful and successful navigation of all these hurdles and challenges. Â As an investor or potential investor you need to familiarize yourself with all these challenges and hurdles to succeed in this business. That said, here is some information about the legal and regulatory hurdles in real estate.
Land Restrictions
Real estate development is not an open field where anyone can just do anything, the space is well governed. Every real estate developer or investor or developer is required to adhere to local and federal zoning laws. These zoning rules and regulations determine where dictate things like where one can build what and when. Â Put simply, the zoning land restrictions determine how an investor develops an area.
As an in investor you have very little power and say over these regulations. Â For instance, there are some areas which restrict constructing high rise buildings. As an investor with business interests in such an area you might not be able to develop whatever property you wanted to develop and can only do what the zoning and regulations say you can do. Â This in particular can be a challenge as it limits investment limiting investment out in the end.
Environmental Restrictions
Real estate development gives consideration to the issue of environment a lot. Environmental impact assessments are very necessary in this business as they help determine the impact of the development on the environment. By the laws of the land, real estate developers are required to ensure that their development complies with air quality, waste management regulations and water quality.
 Building Codes and Relevant Permits
The real estate business is not just about dreaming about the business, getting the finances and getting started no, there is more to it. Even if you wanted to invest where with what money you must first of all adhere to a certain building codes. Â If the area you want to invest at does not allow commercial high-rise you must adhere to that.
Apart from that, you must get all the necessary documentation that either precedes or accompanies this process. Acquiring some of these permits and licenses can take time and money discouraging some investors. Â In fact, if you do not have the required patience you cannot invest in real estate especially commercial real estate because of the high regulations and permit charges this industry attracts.
Conclusion
Commercial real estate development is good but it comes with its own set of hurdles. Â For instance, the legal and regulatory hurdles involved in this business possess a big challenge to potential investors. As an investor you need to carry your background checks on the industry to determine its requirements and involved hurdles then determine how to overcome them.
