Property developers coordinate all the activities involved in developing real estate. Developers buy land, finance real estate deals, build or have builders build projects, create, imagine, control and orchestrate the process of development from the beginning to the end.
To become a property developer, an individual should have a sound knowledge of the local real estate market and a good head for figures. Professional qualifications exist for becoming a property developer, but practical experience is vital in this sector.
The chronological sequence of events is as follows:
- Research the market – by liaising with business contacts or property agents to identify what trends are developing in the market. This will include looking at social demographics, supply and demand, macroeconomic and local economic factors. When choosing the site they need to consider the higher returns obtained from locations which are not in the centre of the city that can be bought and developed cheaply. However. Properties in prime locations sell and lease better, even in bad times, so all these things need to be considered. Lawyers, agents or other professionals could help to draft contracts.
- Financing and planning permission – financing may be obtained from commercial banks, wealthy investors, fund managers or syndicate banks. For large deals, a range of funding sources may be necessary. Development loans are offered in staged payments, finalised at the end of each building stage. Professionals such as conveyancers and lawyers may be consulted to obtain the necessary licences or planning permission for development. This process can take a long time.
- Developing the property – developers may buy a piece of bare ground to develop commercial premises, retail units, offices, hotels, housing etc. or they may convert or renovate existing buildings. Help from professionals such as architects, surveyors, engineers, interior designers, builders, electricians and project managers may be required. The project will need to be managed and construction work supervised to meet deadlines. Health and safety regulations must be satisfied. Contractors and employees must have appropriate protective equipment.
- Marketing the property – the aim of the process is to yield a profit through the sale or lease of the property, so it is vital to keep control of costs and expenses. Agents may be brought into the process early on or later, to assist with sales, depending on the nature of the project.
Real estate development is different from construction, although many developers also manage the construction process. Developers usually take the greatest risk in the creation or renovation of real estate – and receive the greatest rewards. To summarise, knowledge is required of property, the markets, economics, finance, town-planning, the construction processes and the marketing of real estate projects. It is best to start small and work your way up.
Personal Requirements
Some satisfying aspects of this career include:
- meeting many different kinds of people
- finding suitable homes for individuals or families
Some demanding aspects of this career include:
- dealing with difficult clients
- spending considerable time travelling, including overnight trips
- can be stressful at times
Recommended Interests and Skills
- flexibility and the ability to work on a range of different projects
- an ability to work and function in high pressure environments
- an understanding and solid grasp of financial information; projections for financiers will have to be produced to update them on costs and investment capital provisions
- technical knowledge, to be able to complete applications for planning permissions and obtain relevant licences
- excellent communication and managerial skills
- marketing and sales skills
- project management skills including an ability to evaluate a variety of factors.
- a keen knowledge of costs and the ability to monitor and control expense.
- willingness to work long hours, both in the office and on-site.
How to Enter
Level of Schooling & School Subjects
National Senior Certificate meeting requirements for a degree course
National Senior Certificate meeting requirements for a diploma course
Each institution has its own entry requirements.
Compulsory Subject: Mathematics
Recommended Subject: Information Technology
What to Study
There are no prerequisite qualifications needed to become a property developer. You will, however, need to have sufficient capital to make an initial purchase.
There are now a range of qualifications available to prospective developers, which include:
Degree Studies:
BSc Property Studies - WITS & UCT
BSc Construction Studies – UCT
BSc Construction Management - UP
BSc Real Estate - UP
Diploma Studies:
NDip Real Estate – CPUT
Postgraduate Studies:
Diploma programme Property Development and Management - WITS
Introduction to Facilities Management - WITS
BSc Hons Construction Management - UCT
BSc Hons Property Studies - UCT
Employment
- large listed companies
- consultancies
- self-employment – can choose to build and develop personal property portfolios, either employing teams of construction experts or completing works themselves.
Further Information
National Association of Managing Agents (NAMA)
191 Vinko Street
Sinoville, Pretoria
Tel: (012) 543-0693
http://www.nama.org.za
South African Property Owners’ Association (SAPOA)
Paddock View, Hunt's End Office Park
36 Wierda Road West
Wierda Valley
Sandton 2146
Tel: (011) 883-0679
http://www.sapoa.org.za
Programmes by Study Institutions
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