Planning to build a new home? Or an apartment complex? Real estate development involves a series of complex processes ranging from the acquisition of land to the construction of property – start to finish. All of which are critical in the real estate industry.
But what do real estate developers do exactly? What is their role in real estate development? To give you a better idea, we’ll give you a comprehensive rundown of what a real estate developer is and their responsibilities. We’ll cover the different types of developers, the skills that you need to become one, and their impact on the real estate industry. Continue reading to find out more.
3 Key Takeaways
Real estate developers oversee every stage of a real estate project and are the strategic force behind the success of many real estate developments.
Developers are involved in land acquisition, market analysis, legal compliance, financial management, and construction.
Beyond building properties, developers shape local economies, revitalize underserved neighborhoods, enhance infrastructure, and contribute to public services.
What Do Real Estate Developers Do?
So, what are real estate developers? Developers are either individuals or companies that take the lead in real estate projects. They involve themselves in all key areas of the development process.
As a property manager in Austin, we’ve worked with real estate developers when discussing ongoing building construction and property management strategies. However, their roles and responsibilities extend beyond that, including:
Planning and Visualization
Generally, the first thing that real estate developers get involved with is the planning and visualization of the project. It starts with the idea or concept, where they create a real estate property that meets a specific need, preference, or trend in the local market.
Land Acquisition
To put a plan or project in motion, real estate developers also need to handle the process of acquiring land. This includes assessing the location in terms of accessibility, desirability, and value. Developers also consider zoning regulations, road networks, and other infrastructure, and their impact on the development of the property.
Market Studies and Analysis
Similarly, real estate developers also conduct research and analysis on the local real estate market and its influence on the valuation of the real estate development. They conduct feasibility studies to see the economic, legal, and technical viability of the project. At the same time, the market analysis provides insight into the target market, trends, supply and demand, competition, as well as potential risks.
Legal Compliance and Permit Processing
Real estate developers play a crucial role in ensuring that the real estate project meets legal compliance requirements and permits. They navigate zoning laws and process construction and building permits so that the construction proceeds in accordance with local regulations.
Financing and Budgeting
Real estate projects need funding to start and move forward. Taking this into consideration, real estate developers also concern themselves with financial modeling and budget management. Developers make income and expense projections, financing plans, cash flow analysis, and return on investment calculations.
Building Development and Renovations
Finally, real estate developers are the ones to assemble the team of experts, professionals, and specialists who will bring all their plans into reality. They oversee the people involved in the building process, such as the architects, engineers, contractors, and the like. Real estate developers are present every step of the way, from construction to renovations, to ensure that each stage is completed according to plan.
What Skills Do Real Estate Developers Need?
Knowing what real estate developers do is one thing. But, if you want to become a real estate developer yourself, it is important to understand what specific skills you need to have and develop in order to succeed in the industry. Here’s a quick review:
Financial Competency – Real estate developers need to be well-versed in financial management, from budgeting to financing, cost analysis, as well as risk management.
Project and Time Management – When overseeing real estate projects, developers need to effectively and efficiently manage different stages of the building process. Time management is also key to ensuring that each stage of the project is completed according to the timeline.
Legal Understanding and Competency – In order to navigate the different legal requirements in real estate development, they need to have some legal knowledge. Understanding the different rules and regulations that you need to follow is key to meeting all relevant legal conditions.
Communication Skills – real estate developers work with different people, from the architects and engineers who create the design to the contractors who build it. Developers need to be able to communicate effectively with each party involved to ensure that the project goes seamless.
Impact of Real Estate Developers on Communities
Real estate developers do more than just acquire land and oversee building construction. Aside from handling each stage of the real estate development model, developers also influence local communities with each project in progress. With the real estate market valued at $3.9 trillion, developers continue to contribute to the growth of the industry. But how do real estate developers influence communities exactly?
First, real estate developers help shape the local economy by creating jobs for the local populace. Each project creates job opportunities for different people – from construction workers to engineers, real estate agents, and more.
Aside from that, real estate developments also help revitalize underserved areas. Developers targeting rural and suburban communities can help boost the value of the local properties, improve infrastructure, and attract further developments.
Lastly, developers can also contribute to improving public services. Typically, development projects come with infrastructure and public service improvements, such as roads, sidewalks, lighting, utilities, schools, and even police and fire departments. This is achieved through long-term partnerships between private real estate developers and the local government.
Take the First Step into the World of Real Estate
Real estate developers navigate a complex series of steps – from land acquisition to construction and legal compliance. They are the drivers who build and lead teams to complete a real estate project effectively, efficiently, and successfully. However, the long-term success of any real estate project is tied to effective property management.
As a property management company based in Texas, we at Stone Oak Property Management strive to help real estate developers ensure the quality of their projects. From seasonal maintenance tasks to tenant management, we are committed to providing the support that you need to achieve long-term success. Ready to take the first step into real estate? Connect with us to find out how our services can help.
