The process of Real Estate Development calls for the active participation of the various parties involved in transaction- the property seeker, the developers, the financer, and the broker. Also important are the utility services providers like the water and the power suppliers and the designer. The developer could be operating on his own, but most of the times, is involved in partnerships with limited liability companies, or corporations.
There are two main divisions of development in the real estate- land development, and building development, which is also called project development.
Land Development
In land development the developers get hold of undeveloped land, which is also called englobo land, raw land, real property without infrastructure or improvements. The developer improves it with utility connections, roads, earth gradings, covenants, and entitlements. Improvement in infrastructure means that in future the completed improvements could be worked upon to set up better infrastructure.
Building or Project Development
In this sector, unutilised or raw land and, at times improved land is acquired by developers, to undertake the construction of building projects, which may afterwards be sold, either in parts or on the whole to others. These might be retained by the developers, in order to generate earnings by way of rentals, or leases. It is usual amongst larger developers to have internal departments, looking after the designing and construction of buildings. The smaller developers distribute these activities to third parties, in exchange for money.
The process of real estate development requires certain procedures to be followed. They could be explained as below:
Market research- it involves a systematic accumulation, entering, and breaking down of data about consumers, contestants and the market.
Feasibility study- it is the analysis of the feasibility of a certain project.
Due diligence- it is a voluntary investigation into the performance of an organization or an individual.
Option- it is a sort of security that expresses the right of a party to conduct business regarding an underlying security. It is different from an obligation though.
Entitlements- these are guarantees of the ability to approach certain benefits owing to rights or agreements as stated in law. Construction- according to real estate terminology it is the accumulation of infrastructure on a certain site, or a number of them.
Leasing- it is the right to occupy the property of a lessor, of a lessee, or a tenant, in exchange for certain amount of payment. The rights are exclusive and could be had only for the fixed time period agreed to in the contract.
Business operations- it involves running the property for the sake of earning income for the stakeholders.
