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Sometimes known as real estate development, property development is the process of making changes and enhancements to a piece of real estate so that the property is capable of supporting a desired function. This type of activity may begin with the acquisition of real estate that is still in its natural state and will require clearing and leveling before any type of structure can be constructed on the site. At other times, property development involves acquiring real estate that already has structures in place and either adapting or replacing those structures so the property can be utilized 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 property developer will look closely at the current condition of the acquired property and determine what needs to be done in order to ultimately make the property capable of sustaining the intended purpose. For example, if the idea is to develop a planned residential neighborhood, the developer will consider what must be done in the way of running access to electricity, water, sewage, and telephone service that will accommodate the number of planned dwellings in the proposed neighborhood. In addition, the developer will take into consideration ways to develop road access to the property, the laying out of a grid of streets, and any zoning requirements that may influence how the development proceeds.
At times, property development is not about creating something entirely new on a piece of property, but about adapting something that already exists. In many cities, property that was once used for warehouses has been successfully converted into residential housing using the existing structures found on the real estate. Here the focus is on creating apartments or condominiums within those older warehouses, usually by adding wiring, plumbing and other essentials to the interiors and dividing the interior into a series of living spaces. As with any type of property development, the developer must still comply with local zoning laws and guidelines for construction, and keep in mind the need to create something that is likely to attract buyers for each of the individual units.
Whether involving residential or commercial property, the process of property development involves compliance with local standards and the need to make the space functional within the area. Many developers will evaluate the potential for success before purchasing real estate for development, then make sure there are no barriers to gaining title of the property. In some cases, the goal is to purchase property as cheaply as possible, make the renovations or improvements, then sell the property as quickly as possible as a means of earning profits in a short period of time. At other times, the goal is to develop a property so that it can provide a steady stream of revenue over the long-term, ultimately offsetting all expenses and allowing the owner to enjoy the profits.
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