Basics of Real Estate Development

Jul 6, 2017 Property News

Basics of Real Estate Development

Before you get into real estate development there are a couple basics that you need to understand. Most importantly are the different types of real estate development and where you want to fit into the market. Types of Real Estate Development There are two main types of real estate development – land developers and building developers. The first, land developers, center their real estate development around improving the property without adding any buildings to it. In some cases this can involve clearing and updating the landscape for future development, and in others taking the land and adding utilities for additional future development.

Most real estate development involves doing both. What this means is that a land developer will take a piece of wild or unimproved property, clear it out, flatten it to make it habitable then add in the needed utilities to support whatever is planned to go there whether it be commercial or residential property.

The second type of real estate development is building development. Builders will take a piece of uninhabited property and add structure to it. Generally speaking after development these properties are sold to other parties who will either rent it out, hold on to it for future sale, or use it for their needs. Builders in general will not hold onto the property, but in some cases they may and simply rent them out themselves.

In addition there are many real estate development companies that have both land and building development. These companies will take raw unfinished land and turn it into finished properties with structures that they can then sell off or rent out.
If you are interested in real estate development you can check to see if you local college offers any courses in it. Many schools around the country have full departments dedicated to this complicated and highly specialized field. These courses will offer degrees in land development, but since many of the people that enroll in these course go on to form their own companies the degrees are of little value.

One thing for sure when it comes to real estate development is that it takes a lot of money to get started. However, many development companies are incredibly profitable even in today’s fluctuating real estate market. It is up to you to decide if you have the necessary assets and motivation to make money in this difficult and competitive field. Take the time to do some research before making your decision.