Real estate development, also called property development, is a business process in which existing buildings are renovated or new buildings are constructed on new land that has been purchased for building or on existing land parcels that are already developed. This type of development can be undertaken by individuals, companies or real estate developers who finance and coordinate the process of finding land and building properties on it. While real estate development is distinct from construction and house building, many developers manage the process from the initial concept through the construction phase and the final sale of the developed properties.
Real estate developers take the greatest risk in devising and financing projects and hence receive the greatest profits from the process. They need to find land and purchase it (or organize financing), create a concept or plan for the development, obtain the necessary approvals from local bodies, engage builders to undertake the construction process and finally sell or rent the buildings they have created at a profit. They are involved in the process from beginning to end and control and orchestrate all of the activities involved from the initial concept to the final marketing of the end product.
In some cases property developers only perform part of the process. Some developers, for example, source a property or land, create plans for them and get the permits from regulatory bodies and then sell the plans and permits to another party, such as a builder, construction firm or investment company, that actually undertakes to perform the building process. In other cases a developer may purchase a property that has plans and permits in place and then undertake the construction process so that they minimize the risk of plans being rejected and can commence construction quickly. Developers often work with a range of other companies and individuals during the development process such as architects, city planners, lawyers, engineers, surveyors and leasing agents among others. While there are various ways in which property development can be done the defining feature is typically that the real estate developer finances the deal, takes the major portion of the risk involves and consequently receives the majority of the profits from a successful project.
There is no set path that leads to a career in real estate development. Developers come from a range of backgrounds and disciplines including real estate, construction, engineering, urban planning, the legal profession and accounting among others.