There are some very famous real estate developers around. Consider Donald Trump, for instance! That said, that doesn’t mean that everybody knows exactly what a real estate developer does. Indeed, there are quite a few complexities involved in this, not in the least because it involves millions if not billions of dollars per project. Randy Benderson felt it was time to shed some light on what this area of work actually is.
Randy Benderson Defines Real Estate Development
There are two key development activity categories:
- Land development. Here, unimproved land, without any utilities or roads, is purchased and built up from scratch. They set in different covenants, gain the necessary entitlements, grade the earth, zone it for commercial or residential real estate, potentially going further such as retail or multifamily properties, and plan and build the roads. They then sell it, or pass it on, to the project developers.
- Project or building development. As the name suggests, these are the ones that place the actual buildings on the land that has been prepared and developed for them. Sometimes, they purchase existing buildings and change them, which is also part of their job.
Why Is Real Estate Development Necessary?
Real estate development is a highly insecure area of work. Someone may get a scoop that there will be an interesting economic development in a place like Phoenix, Sarasota, or Tampa Bay, and gamble that this will also mean an increase in demand for real estate. However, they will have a huge amount of hard costs to pay for, and no guarantee that there will be a sale. This makes people wonder whether there is any point in taking these risks at all.
However, the money in real estate development, if it goes well, is very good as well. Since most developers work as part of a company, they don’t actually have any personal investment. This means the risk is cut quite significantly.
How to Make the Big Money
Some real estate developers, like Donald Trump, are incredibly wealthy. However, this is the exception and not the rule. Yes, the developers we see on the news have all made it big, but there are thousands of other property developers around who don’t make billions of dollars but just earn a regular income like everybody else. If you hope to become truly wealthy in real estate development, what you need is a whole lot of luck – or someone who will support you financially and already is wealthy.
So should you consider real estate development as a career? According to Randy Benderson, it is certainly a fascinating and exciting one. There is something special about seeing urbanization happen thanks to your efforts. If, however, you are only in it for the money, then you may want to consider a less risky career. Enter it with a realistic view and a commitment to incredibly hard work, however, and you may just find that it is perfect for you.