A real estate developer plays a vital role in developing new and existing communities. They develop land for a useful purpose and by doing so they create jobs and investment opportunities for wealth creation. Before looking at their role, let’s first establish what is meant by the term real estate and the types of real estate.
What Does a Real Estate Developer Do?
Real estate came about in the 1600s and was a legal term to identify a royal grant of estate land. All land in a country belonged to the royal family (the crown). Therefore, real estate could be loosely regarded as a sub-division or a change of ownership, in exchange for loyalty to the crown. “Real” comes from Latin, and means existing, actual, or genuine. “Estate” comes from the old French word “estat” which means “status” and translates to “estate” in English.
Real estate includes the surface of the land and what is above and below it. It includes anything permanently attached to it. Critically it includes the rights of ownership, including the rights to possess, lease and sell it. Ownership also includes permanent improvements to the land, whether natural or man-made. This includes bridges, fences, water, minerals, and buildings.
Types of Real Estate
Broadly speaking there are five types of real estate.
Property used for living in. Sometimes referred to as domestic property.
Property used for the purpose of generating revenue. Domestic apartment complexes can also be regarded as commercial property.
Property used for manufacturing, production, distribution, storage, and research and development.
Property that is undeveloped, vacant, or used for agriculture, including timber.
Property used by the public, such as cemeteries, government buildings, libraries, parks, places of worship, and schools.
Real Estate Developers
The function of a real estate developer is to develop vacant land or to redevelop what is already on a parcel of land. In order to develop the land, they first must own it. The developer must agree to finance either with institutions or by finding investors.
The first job of a developer is to identify a property to develop and then to decide what type of development would best suit it. The real estate developer will decide what is best after surveys, market research, and investigating any legal or regulatory restrictions. Once this is done, the real estate developer will then become the project manager, appointing architects, building contractors, and marketers. The developer will liaise with regulators as well as potential customers, some of whom might have particular requirements.
Belief, Risk, and Reward
Organization skills and connections are crucial to becoming a successful real estate developer. They are good at negotiating, working in a team, and learning on the fly. However, a key characteristic of real estate developers is that they are risk-takers. A developer will take on a calculated risk when they believe in their vision. A good developer is a leader who inspires a common vision and purpose.
Additional Reading: Challenges in Real Estate Development
Graves Development Resources | Land Developer in Omaha, Nebraska
Graves Development Resources (GDR) has been designing and building the market’s finest neighborhoods since 2000, with over 5,000 homesites and important commercial development projects throughout Douglas and Sarpy Counties.
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