A lot of people look at the real estate land developer and find themselves a bit flummoxed by what the position actually entails. Certainly, most understand that developers buy and sell real estate. They are not, however, clear on what happens before and after a purchase that enables these people to traditionally make a tidy sum in profit. The field is a great deal more complex than it looks.
So, what is involved in land development?
In addition to having the capital to buy and sell property, a land developer also needs to have these skills or a professional staff to back up buys to make a successful go at the effort:
- Market research ability – Successful real estate developers not only purchase land, they also develop the property with buildings or other features. To take a piece of land and "add value" to it and make sure it sells at a profit, developers need to know what a local market lacks. For example, a successful developer would not likely build the 12 th apartment complex in an area where vacancies are high.
- Ability to exercise patience – A land developer does not make a huge profit overnight. In many cases, developers purchase land and hold it for a time before they make a decision on how to proceed. Even if an immediate project is planned, construction and development still takes time.
- Ability to navigate government and legal processes – Real estate development often involves a great deal of government and legal red tape. Once land is purchase, it often needs the proper zoning for development, permitting for construction and so on.
- Ability to oversee construction planning, design and fulfillment – To be a real estate developer, there is a need to actually turn the dirt on property purchased. For real success to happen, developers need to make sure their projects appeal to potential buyers or tenants. They also have to see those projects through the design and construction phase. A real estate land developer must wear many hats or have a company staffed with the right people to take raw land and turn it into a commercial, residential or industrial development.