A real estate developer is a person who owns or manages apartment buildings, houses, and other real estate properties that are for sale to different individuals. Property owners may also use the term about large-scale mixed-use developments planned and managed by them. In some countries, the term “property speculator” is used instead of “developer,” typically with negative connotations due to the aggressive marketing strategies used by many developers.
When real estate developers buy land or property, they must pay for the development expenses, including marketing, legally preparing documents such as permits and property titles, and organizing financing. Once the real estate is an established area with a system of infrastructure (e.g., sewer and water lines), the developer has to tender for building contracts from construction companies that will build the roads, pavements, and houses/apartments following the agreed specifications. In addition to the developer managing all aspects of planning at a general level, they must also ensure that all municipal services are available in and around their real estate developments; this includes providing public transport services to all parts of the development to support housing access by non-automobile users such as cyclists and pedestrians.
Once all the construction is completed, the real estate developer sells the buildings (or land) to property investors and end-users.
Often developers will sell properties through real estate agents or via property auctions. In developed countries such as Australia, Canada, and Japan, land development and house construction are often regulated by planning law.
Some cities with planning regulations may also contain a unique district known as a “planned community”, which is essentially a particular type of condominium where all houses are built according to a master plan that cannot be changed once it has been agreed upon by the residents and municipal government.
Below is a list of the main related terms when real estate developers speak of their businesses.
Homebuilder: The real estate developer that builds residential buildings. The home builder’s role is one of the most labour-intensive roles in a development project. They need to find land, obtain all the building permits, and achieve a building permit before construction can begin.
Land developer: A real estate developer that plans, acquires, or sells undeveloped land for residential development, agriculture, or commercial purposes.
Land use developer: A real estate developer that acquires or develops agricultural land.
Investor: A term used to refer to persons who have the legal right, title or interest in real property and are entitled to a share of the rents, profits, income, and appreciation while they are in possession thereof. The owner of the land is also an investor. However, the term “investor” usually refers to one who buys property without intending to live on it; an otherwise unmarketable piece of land with no development potential is usually referred to as a “flip”. In contrast (and typically in the USA), a typical investor will normally purchase their home directly from the builder and pay rent concerning the house they occupy.