In recent years, a new concept has appeared in economic terminology - development activity. Development is understood as an entrepreneurial activity that is associated with the change of existing buildings, structures or land plots and leads to an increase in their market value.
Instructions
Step 1
Development is a new type of entrepreneurial activity that is associated with restoration, engineering, construction and other works. After completing these works, a qualitative change in the property takes place and its value increases.
Step 2
A developer is a company that creates a property and manages this process. The totality of all the work performed by the developer is a complex investment project in the real estate sector. When implementing a project, the developer strives to minimize risks and increase profitability. In some cases, the developer can only act as a performer and receive a fixed fee from the customer for his work. If the developer acts as the initiator of the project, then he is forced to take on all the risks.
Step 3
The life cycle of an investment project in development consists of several stages. At the first stage, the choice of a land plot for construction is carried out, a detailed business plan of the project and a feasibility study are prepared. At this stage, it is necessary to conduct a thorough market analysis and evaluate the expected financial results from the project, justify investments and prepare a project financing scheme.
Step 4
At the second stage, the developer must obtain all the necessary permits for the development of the territory or agree on all the terms of the lease. All these actions must be carried out before the start of the project.
Step 5
The next stage is the organization of project financing and the acquisition of an object for development. The source of financing can be equity or borrowed capital. Typically, developers seek to shorten construction times to keep costs down.
Step 6
Further, the developer must organize design and construction work. To perform these functions, specialized third-party organizations can be involved, sometimes large development organizations have their own divisions to carry out design and construction work. To mitigate risks at this stage, the developer should conduct constant monitoring.
Step 7
At the last stage, the sale of the finished object is carried out. In some cases, the developer can leave the property at his disposal and rent it out. At the same time, the developer must organize the effective use and further management of the property.
