What is development
What is development
In recent years, in economic termsThere was a new concept - development activity. Development is understood as entrepreneurial activity, which involves the change of existing buildings, structures or land plots and leads to an increase in their market value.
Instructions
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Development is a new kind of entrepreneurialactivity, which is related to carrying out restoration, engineering, construction and other works. After the completion of these works, a qualitative change in the real estate object takes place and its value increases.
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A developer is a company that deals withthe creation of a real estate object and manages this process. The totality of all the works that the developer performs is a complex investment project in the field of real estate. When implementing the project, the developer strives to minimize risks and increase profitability. In some cases, the developer can act only as an executor and receive for his work a fixed fee from the customer. If the developer acts as the initiator of the project, then he is forced to assume all risks.
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The life cycle of an investment project inThe development consists of several stages. At the first stage, a choice of land for construction is carried out, a detailed business plan for the project and a feasibility study are being prepared. At this stage, it is necessary to conduct a thorough market analysis and evaluate the expected financial results from the project, justify the investment and prepare a scheme for project financing.
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At the second stage, the developer must receive allnecessary permits for the construction of the territory or agree on all terms of the lease. All these actions should be carried out before the project begins.
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The next stage is the organization ofFinancing of the project and acquisition of an object for development. The source of financing can be own or borrowed capital. Usually, developers tend to shorten the construction period in order to reduce costs.
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Further, the developer must organize design andconstruction works. To perform these functions, specialized third-party organizations may be involved, sometimes large development organizations have their own units for design and construction works. To reduce the risks at this stage, the developer maintain constant control.
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At the last stage of the saleFinished object. In some cases, the developer can leave the object at his disposal and rent it out. In this case, the developer must deal with the organization of effective use and further management of the property.
