What is development

In recent years, the economic terminology has a new concept – development activities. Under development refers to entrepreneurial activity that is associated with the modification of existing buildings, structures or land and leads to an increase in their market value.

Instruction

1. Development is a new kind of entrepreneurial activity that is associated with the restoration, engineering, construction and other works. After these is a qualitative change of the property and its value increases.
2. The developer is a company which is engaged in creation of the property and manages this process. The combination of all the works carried out by the developer, is an integrated investment project in the field of real estate. During implementation of the project developer seek to minimize risks and increase profitability. In some cases the developer can only act in the role of the executor and to receive for their work a fixed fee from the customer. If a developer acts as the initiator of the project, he is forced to assume all the risks.
3. The life cycle of the investment project development consists of several stages. The first stage is the selection of a land plot for construction, prepare a detailed business plan and project feasibility study. At this stage it is necessary to conduct a thorough market analysis and evaluate the projected financial results from project implementation to justify investment and to prepare a project financing scheme.
4. In the second phase, the developer must obtain all necessary permission for the development of the territory or to agree on all terms of the lease. All of these actions should be carried out before the beginning of the project.
5. The next stage involves the organization of project financing and the purchase of the property for development. Source of funding may be own or borrowed capital. Usually developers strive to reduce the construction period to reduce costs.
6. Next, the developer must arrange for design and construction work. To perform these functions may engage specialized third-party organizations, sometimes large development organizations have their own departments for the implementation of design and construction. To reduce the risks at this stage, the developer continuous monitoring.
7. At the last stage of the sale of a facility. In some cases, the developer can place the object at your disposal and rent it out. In this case the developer should organize the efficient use and further management of real estate.