No four-year degree is required to work as a real estate developer, but it’s beneficial. Not only will you learn and practice valuable skills, but you’ll start to make useful connections in the industry.
If you do decide to pursue a degree you could major in any number of fields, with an emphasis in real estate, capital markets, or urban planning. Fields of study to consider for a Bachelor’s degree include finance, construction management, architecture, or law.
Regardless of what you earned a Bachelor’s degree in, you could move on to a Master of Science in Real Estate, a Master of Real Estate Development, or even a Master of Business Administration.
If a Bachelor’s or Master’s degree is not in your plans, you can take courses to certify, or be licensed, in fields such as commercial real estate or investment management. Some real estate developers come from a construction industry background, gaining experience with master-planned residential communities, or commercial property buildings. All of this can help you be better prepared to tackle all the responsibilities of a real estate developer.
Whether or not you pursue formal education in fields related to real estate development, you’ll need to be able to do the following, or hire it out:
- Finance large-scale building projects – Most real estate developers aren’t funding their projects from their own pockets. It’s often necessary to find capital, sometimes as much as $3 million just to get a small project started. This means you’ll need to recruit investors for each new project.
- Purchase land – Whether you purchase the land outright or partner with the current landowner, you need a site. You may find out about a parcel of land before it’s for sale publicly, and you may be trusted by the landowner enough to be chosen as the developer.
- Analyze market needs – When you develop land, you want to be meeting an unsatisfied need in the area, so do your homework and see how you can be the answer to the community.
- Understand building and use permits – Before you can break ground, you’ll need to know what permits the space requires. Do the legwork and develop a solid plan based on the market research you’ve conducted, seeking approval from local authorities as needed.
- Renovate existing properties – If remodeling an existing property rather than building from the ground up, you’ll want to be familiar with what this process entails. How can you bring a building up to code, or incorporate the latest in technology and design to suit new demands?
- Lease or sell completed real estate – Once you have a finished project, you better have a plan for generating profit! Whether you sell or lease your property, you’ll want to aim for a return that is at least double your investment. This allows you to now only pay yourself, but to pay back investors.
You’ll also need to be able to oversee tasks such as:
- Keeping clients informed of the building process – And meeting deadlines!
- Calculating budgets – You’ll want to ensure you have enough money to purchase supplies, and everyone gets paid in a timely manner.
- Bidding projects to various vendors – When you’re developing a project, you’ll probably consult various architects, contractors, interior designers, and installers. To find the right one for your project, there will be a bidding process to get the best product for your budget that works with your timeline.
Joining a development team as an associate is a great way to get experience in the aforementioned areas. As you break into the real estate industry, you may find yourself carrying out entry-level tasks that will eventually lead to more responsibilities.
You can fly solo as a real estate developer, but you may find better support and opportunities if you utilise another company, or contact specialists like Lincoln Frost, who are more experienced in this field. You may also better find help in a company that specializes in a specific type of development.
- Brownfield – This refers to developing existing industrial or commercial property. An upgrade to structures or buildings is substantially less expensive than a new development, and brownfield development can have a faster turnaround time.
- Greenfield – This is a project intended to develop green space, such as farmland or fields in both urban and rural locales. While turnaround down may be longer, greenfield development does offer a lot more flexibility than when rehabbing an existing development.
- Residential – Whether a subdivision of single-family homes, clusters of townhomes, or apartment complexes, residential development is for habitation purposes. There’s usually significant demand for housing, the market could fluctuate rapidly, leaving you with a stalled return on your investment.
- Commercial – Any space that is being developed to generate profits is considered commercial. This could be profit from the initial sale of the development or continuous rental income.
As you can see, no developer can do it alone. You may start solo, but you may find it a more rewarding career if you establish your own firm, or join one already established.