WikiWealth

Home > WikiWealth Blog > What Exactly Is Real Estate Development

A professional developer plays a prominent role within the real estate business. A professional developer's job duties involve acquiring and developing properties.

Typically, acquiring a property is to further develop it into either residential or commercial properties. These can include larger complexes to residential homes to commercial businesses.

How You Can Get Started In This Type Of Development

If you are someone that has an interest in advancing in the real estate industry as a developer, there are plenty of ways to do so.

A lot of those that are developers end up getting a start by becoming real estate agents. Once they've been in the industry for some time, they begin to purchase property on their own and resell them for a profit. This is known as flipping properties. As soon as they've flipped enough to secure their real estate capital, they then use that capital to work with a professional planner and builder to design their properties.

Some of those that get into being real estate developers end up getting their start in the construction profession. One can build homes or other types of properties for years and they gain the connections they need to find experienced architects and even asset managers to help them develop various larger-scale projects.

Another option to get into this field is by working alongside a development company or a consultancy firm for a specified type of property. This is typically the most traveled path for those that don't have the entrepreneurial itch.

What Does The Process Look Like?

The process for the development of real estate can be a very complex one.

Usually, it begins with a simple concept and completes with a developed property that is in a position to either be leased or purchased by someone. A developer has the requisite experience and skills to effectively identify an opportunity when they see one and who has the requisite connections they need to finish the project.

However, the developer will need to research everything beforehand and come up with a budget that can be maintained to ensure it's viable.

If the developer has the requisite funds to complete the project under budget, they will meet with the various local officials that are needed to get approval. Throughout this entire portion of the process, the developer will be tasked with talking about the project and how it will benefit the local community as a whole.

From there, the developer will come up with initial designs and submit the preliminary applications. In a lot of instances, a public hearing will be held. During this, the local members of the community will be able to express any concerns they may have and ask any questions about the development.

If there is approval, the following step requires getting all of the finances in order and signing the contracts. As soon as everything is done, the development can begin.

When the project is completed, the developer will have to get all of the requisite permits. From there, they will be able to sell the property or lease it out.

Residential vs Commercial Development

A developer typically chooses to do either residential or commercial development. There can be major differences between both.

For example, any commercial real estate development project is typically going to be much larger in scale than a residential one. A larger scaled commercial building is typically going to be much more complex and it will require a lot more financing. Not only do the construction materials have to be better and longer-lasting, but more materials will be used in total.

Because of the differences, any commercial property project is likely to be much more than a residential one. Likewise, the schedule for developing one is going to be much tighter because it usually requires you to work with shareholders overseeing the process. Whereas, with a residential project, you are typically only going to be working with a single-family or a couple of homeowners.

Mark Sigurdson
CEO and chief editor at WikiWealth, I'm a proud father of two, passionate about value investing and ways to grow wealth through strategic investment analysis.

 Write a reply!

Add a New Comment
or Sign in as Wikidot user
(will not be published)
- +