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5 Challenges You May Face in the Real Estate Development Industry

By Mike Wheatley | April 10, 2022

Real estate development is an interesting and lucrative industry, but like all lucrative sectors, it also comes with a number of challenges. Anticipating and having the ability to meet those challenges is important.

Fleet Management Issues

Construction can't happen without supplies and fleets to deliver them, but this may be easier said than done. Nearly everyone has become aware of the precariousness of supply chains in the past couple of years, but many different things can cause these types of issues even when there is not a global pandemic. Fleets that are prepared for this can weather these issues, particularly when they have the right tech to do so. Having effective fleet monitoring can be helpful because being able to track vehicles using real-time data allows you to communicate clearly with others about where they are located. This technology can also help you monitor performance and identify ways to improve. In all, GPS fleet tracking software and solutions can help a fleet be more efficient and save money whether or not supplies are a problem.

Site Choice

Another potential challenge in real estate development is choosing the right site. There are dos and don’ts of buying land for sale or development. First, you may face opposition from people who live in the neighborhood. It's important to understand what that opposition might be and how to respond to concerns. The other problem that might arise is that the site might be unsuitable in other ways. There might be environmental issues, zoning problems, or issues with competition. You also need to be smart about the market, understanding what is needed in any given area.

Construction Safety

When construction is necessary, you must make sure that the site is operated in compliance with Occupational Safety and Health Administration guidelines and that all hazards have been identified. Falling, issues related to material handling, and slip and fall injuries are among some of the most common hazards that workers may face. These types of incidents have both a human and a financial cost. There are other problems that can arise that may not leave anyone injured but which can still be expensive to fix, such as bad weather that causes delays or utility lines laid in unexpected places.

Cost and Design

It is a truism that renovations and construction work nearly always cost more than you anticipate, so this is not necessarily disastrous as long as you have accounted for cost overruns. The trouble can arise if you fail to consider how both delays and cost of materials can contribute to those expenses. Choosing the wrong architect can be costly as well if there are problems with the design. Be sure to choose an experienced real estate development firm, and consider an indemnity policy as an owner to supplement any existing liability insurance.


Getting the right permits can also stall a project, and the difficulty in obtaining them can be exacerbated by several of the points discussed above, including site choice and design. While this is largely a matter of identifying and filling out the right paperwork, this part of the process can be time consuming, and it's important to allow enough time at the beginning of the project to get everything through the system.

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected].
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