Real Estate Articles Real Estate Articles
Alternative financial solutions for real estate developers
Abdulrahman bin Ali Al-Qout
With rising interest rates, the sale of residential units In general, rising interest means increasing the cost of borrowing, leading to additional costs for buyers and reducing the purchasing power of many people, however, there are some alternative solutions that real estate developers can adopt:
-
Providing alternative financing options:
Developers can collaborate with local banks or other financial entities to develop special financing programs that meet the needs of buyers. These programs can include flexible repayment periods, grace periods with deferred repayment, or interest reductions for the first period of the loan.
-
Focus on your target market:
It may be beneficial for real estate developers to direct their efforts towards certain categories of people who may be better able to buy real estate in a rising interest rate environment. For example, small affordable housing units could be developed targeting youth, students or low-income families.
For example, small affordable housing units could be developed targeting young people, students or low-income families.
-
Providing additional packages for buyers:
Real estate developers can provide additional packages to buyers to make properties more attractive. These packages may include a price reduction, providing appliances, or covering administrative finance costs.
Real estate developers can provide additional packages for buyers to make properties more attractive.
-
Expand into new markets:
It may be beneficial for real estate developers to explore new markets or areas with high investment opportunities. There may be areas where demand for real estate continues despite rising interest rates, offering developers opportunities for good returns.
-
The trend towards real estate (commercial-industrial-recreational):
Focusing on developing these properties can be a good alternative under rising interest rates. These properties may be more stable and provide financial returns in the long run.
6- Growing rental portfolios:
It is true that their returns are low to medium (%4 - %6) but they are a good source of cash flow in turbulent market conditions.
Remember that these alternative solutions may vary in their efficiency and suitability depending on the market and local conditions. It may be best for real estate developers to consult financial experts, economists, and real estate consultants to assess the situation and choose the most appropriate solutions for their projects.
Real Estate Expert
