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The development of real estate is a profitable and flourishing business. The business of real estate development is different from the business of construction. However, a lot of developers also engage in the business of construction. Real estate development activities include purchasing of land, selling it as such or after improving it, renovating existing buildings, or re-leasing them.
Real estate developers play a significant role by coordinating the activities and bringing designs into reality. A developer purchases land, finances the purchase, and then utilizes the services of other person or entity to build upon the purchased land. The person who builds is the builder and the person who coordinates all the activities is the developer. In the process of development, developers coordinate with various professionals like real estate agents or realtors, investors, architects, engineers, city planners, surveyors, etc. Real estate agents acting on behalf of a seller or buyer have a fiduciary duty to act in the best interests of his/her client.
Developers control the process of real estate development and take responsibility for the entire process. Undoubtedly, while developers take the biggest risk, they also get to enjoy the greatest benefits of the process. Developers can be individuals or large companies like Weyerhaeuser, who handle various arenas of the real estate business.
The business of real estate is an integration of various other fields and requires expertise. Interestingly, universities within the Unites States are offering formal real estate graduate programs like the Master of Real Estate Development (MRED) and Master of Science in Real Estate, aimed at benefiting developers.
Laws on real estate development vary depending on the purpose for development. The various purposes for which real estate can be developed are residential (like residential condo development), commercial, or for mixed use. Mixed use is when a building is utilized for more than one purpose. For example, some people prefer to have their house and jobs located in the same area. Such properties that give the facility of mixed use have higher commercial value than purely residential development projects. Commercial real estate development is also a very challenging task because it involves having sound knowledge of zoning laws. In the process of commercial development of real estate, you will also have to negotiate with government authorities and sometimes with representatives of neighborhood associations. It involves a huge initial financial investment as well. However, if you have resources and the skills, it is a very rewarding opportunity.
There are various organizations that represent commercial real estate developers. The NAIOP is one such organization and if you are a member, the organization will help you by providing opportunities for business, as well as continuing education.