Navigating the Financial Landscape of Construction Investments


Investing in construction is a multi-step task involving much expertise and risk throughout the process. Risk can be minimized with smart investment strategies, which are highlighted in this guide. If you’re looking to start or improve your career in construction and real estate investing, there are a few ways to navigate this landscape in the most ideal way possible, from location sourcing to the construction team you use. To create a worthy investment, some spending is required along the way.

Investing in Construction

Investing in construction or real estate can be a financial gamble no matter what market you’re in or what team you use. However, researching target markets and economies in the locations you’re zeroing in on is a great way to start a smarter investment path.

Budgeting and Planning

Planning is a crucial, unskippable part of the construction investment process. A great deal starts with a plan, after all. A consistent construction plan involves a flexible but tangible timeline, several deadlines, and a solid budget. A construction timeline will differ from a market research timeline, so incorporate enough time for each part of the project. Be certain all goals are integrated into the plan as well. If your construction investment is for residential real estate, aim for a good time of year for potential residents to move in, such as summer or late spring. As mentioned, flexibility is very important; however, hiccups will happen, and planning for those is key.

Regarding budgeting, you’ll want to pad it to include any emergencies. When calculating the lowest possible budget amount, add at least 10-20% to be extra safe and cautious. Hiring a real estate financial expert or investment mentor is a smart strategy if you’re unfamiliar with real estate budgeting.

Research the Ideal Market

Your investment can be far from where you live and work. Ideally, you’ll want the smartest market for your goals. Choose an area that is at least starting to experience high population growth and demand.  In a market that grows in popularity, the worth of your investment will likely increase as well. Metropolitan areas like Boston, Austin, Charlotte, or Nashville are great and typically evergreen in growth, but smaller markets can work, too, particularly if they’re near a bigger metropolitan area.

Finding a Location

The general market area isn’t the only important area to research. You’ll also want an ideal location within that market. For example, if you’re looking to build a new neighborhood community, you’ll want a relatively crime-free area with great schools and amenities nearby. Centrally located real estate is generally worth more, but be careful, as it also comes with a bigger price tag to invest in. A good financial balance may be smart.

Popular Features

It’s important to research popular features and amenities to incorporate into your construction that the recent population is looking for, such as energy efficiency. Open-concept floorplans are also popular lately. Commercial spaces with ergonomic, open office designs are also desired in certain markets. Be certain to research what is popular in the market you’ve chosen. However, you don’t want to go overboard, as this can hurt you financially. Clean lines, neutral colors, and open floor plans are budget-friendly features in many properties.

Sourcing a Construction Team

The right construction team can make your investment dreams come true at the right prices. You’ll want them to be highly experienced, use strong materials, and have a good portfolio for new constructions. You’ll wish general contractors to be licensed and certified and want to be certain of it. Licensing for general contractors varies by state and the requirements to obtain them. Some even require licensing for supervising roles, such as a construction supervisor license (CSL). For example, one of the aforementioned ideal markets, Boston, requires a CSL test in Massachusetts for any construction supervising roles. Researching license requirements in the area you’re looking to hire in can save a lot of problems in the future. 

Real Estate Agents

Working with a trusted real estate agent team that has a proficient portfolio in selling new construction in the type you’re investing in is very important. After all, you won’t have a return on your investment without interested buyers! It’s also good to vet out any real estate team you hire to ensure proper experience and certification.


Most investors will require a lender to get the ball rolling. Similar to other experts in this real estate field, you want to make sure they’re qualified and certified. You’ll also want to ensure they specialize in commercial investing to obtain the best rates and leverages. Your lenders, construction teams, and real estate agents should work harmoniously to get the best rates for quality work.


Investing in new construction is not for the fainthearted, especially in the financial area. However, it can be incredibly lucrative with the right planning, budgeting, and team. Be certain to research ideal markets, team member qualifications, and construction trends in the area you’re looking at to create the most financially savvy investment.