What’s a Land Developer and do I need to hire one?

With property prices ever increasing, land developing has become a popular practice and is expected to continue growing at 23% per annum. Land developers buy land or property which is currently not being used or is derelict and improve it with utility connections, roads, or by building upon it or repairing it.

Once these improvements have been made, they then sell the land or property that has been built at a profit. Some land developers work privately, employing contractors to help them at the different stages of the process.

However, land development companies are also available if you wish to hire a business to help you with a project.

When would I need a land developer?

Land development companies can be hired if you wish to purchase some land and build on it, or buy a property and improve it. This can be for profit reasons, for example if you want to sell the land off after the development, or more likely if you wish to build a house or property, or develop an existing one, for your own company.

The land development process

A land development agency takes on all parts of this process, and a large part of their work is to ensure at each stage that the management of risk is monitored and kept to a minimum. There are usually very large sums of money involved so all calculations need to be done and all factors need to be taken into consideration before any of the plans are put into practice.

The land developer must also be aware of and follow all local, country and state laws and regulations whilst planning and building.

  • The first part of the process is market research. The developers will carry out research into the area in which you wish you buy in order to establish what land or property is available. Any land or properties which are found in this process will then be investigated using land surveys, maps, deeds etc to see if they are appropriate for the suggested project. For example, if the developer wishes to build a number of houses on a land site, percolation testing may need to be carried out, or road access may need to be investigated.
  • Next the site will be selected based on the previous research and analysis, and its suitability for the project.
  • The developer will then identify and investigate all issues which are relevant to the planned project in relation to the proposed land or property, and will produce a preliminary business plan taking these into consideration. This will include all financing issues, whether funding will have to be obtained, who from, and when this has been identified, these companies or banks will be approached with the preliminary business plan.
  • If funding is approved the developer will then buy the land or property.
  • The project will then be designed using the measurements, characteristics and any restrictions which surround the land or property.
  • The developer will then obtain any entitlements which are needed for building upon the land or making renovations to any existing property.
  • The concluding financing of the project then needs to be conducted, which includes how much the construction will cost, labour costs etc. This will then be drawn up in the final business plan.
  • The construction then takes place. The land developer will be present at all stages of this process to ensure that the construction is up to standard and that it is following the guidelines and specifications for the project.
  • When construction is complete, if the development is to be sold or rented it will then go up for sale or the lease will go up. If the development is to be used by the contractor, then the business will go into operation.

How much will a land developer cost?

If you are planning to sell the land or property at the end of the development, then the land developer will usually ask for a cut of the profit. This will certify that they work to the best of their ability, as they will want to make sure that they receive the best price for the land or property. They will also guarantee that costs during the development are kept as low as they can be. All construction costs and initial buying costs will need to be paid by you.

What qualifications should I look for?

Many land developers enter the business from other areas that are related, for example architecture, construction and other such fields. An educational background in finance is usually a prerequisite by established development companies. Some universities also offer specific educational programs which have an emphasis on land development.

It's worth asking which of these applies to the land developer which you choose. It is also important to make sure that the developer you choose is a member of the Royal Institute of Chartered Surveyors.

Where can I find a land developer?

The RICS website has an extensive list of land developers, which is also divided into particular categories to make it easier to find a developer who specialises in your type of project.

What should I ask a land developer?

  • Have you done a similar project to this before?
  • How much do you think this will cost?
  • How long do you think this will take?
  • Are there any special regulations which we need to follow?

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