Property development involves making changes to real estate to support a desired function, either by acquiring natural land or adapting existing structures. Developers must comply with local standards and consider potential success before purchasing property. The goal may be short-term profit or long-term income.
Sometimes known as real estate development, property development is the process of making changes and improvements to a piece of real estate so that the property is capable of supporting a desired function. This type of activity can begin with the acquisition of properties that are still in their natural state and will require clearing and leveling before any type of structure can be built on the site. At other times, property development involves acquiring properties that already have structures in place and adapting or replacing these structures so that the property can be used for a new purpose.
When property development is focused on preparing real estate for use in some new purpose, such as retail space, manufacturing or even office space, a real estate developer will take a close look at the current condition of the acquired property and determine what needs to be done. to ultimately make the property capable of sustaining its intended purpose. For example, if the idea is to develop a planned residential neighborhood, the developer will consider what must be done in terms of managing access to electricity, water, sewer, and telephone service that will accommodate the number of planned homes in the proposed neighborhood. In addition, the developer will consider ways to develop road access to the property, the layout of a street grid and any zoning requirements that may influence the progress of the development.
Sometimes property development is not about creating something entirely new on a property, but adapting something that already exists. In many cities, properties that were formerly used for warehouses have been successfully converted into residential homes using existing structures on the real estate market. Here, the focus is on creating apartments or condominiums within these older warehouses, often adding wiring, plumbing and other essentials to the interiors and dividing the interior into a series of living spaces. As with any type of real estate development, the developer must still comply with local building zoning laws and guidelines and keep in mind the need to create something that can attract buyers to each of the units.
Whether involving residential or commercial real estate, the property development process involves compliance with local standards and the need to make the space functional within the area. Many developers will assess the potential for success before purchasing property for development, and then ensure there are no barriers to obtaining title to the property. In some cases, the goal is to buy property as cheaply as possible, carry out renovations or improvements and then sell the property as quickly as possible, as a way to make a profit in a short period of time. Other times, the goal is to develop a property so that it can provide a steady stream of income over the long term, offsetting all expenses and allowing the owner to enjoy the profits.
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