Pros and Cons of Becoming a Real Estate Developer
Real estate developers, part of the property management field, focus on the rehabilitation of existing real estate properties to the development of new properties that can range from subdivisions to skyscrapers. If you are considering a career as a real estate developer, there are a few things you may wish to consider.
| Pros of Becoming a Real Estate Developer |
|---|
| Higher than average income potential (about $66,000 mean salary as of 2014 for all property, real estate, and community association managers)* |
| Many professional certifications available* |
| Opportunity to be a catalyst for economic growth** |
| Continuing population growth should spur property development opportunities* |
| Cons of Becoming a Real Estate Developer |
|---|
| Job growth dependent upon economic stability* |
| High level of education required for many positions* |
| State licensure required for real estate brokerage*** |
| Potential for long working hours and extensive travel* |
Sources: *U.S. Bureau of Labor Statistics, **National Development Council, ***National Association of Realtors
Career Information
Job Description and Duties
Real estate developers acquire land and properties for retail corporations or investment firms through negotiation with brokers, organizations or other developers. You may prepare appraisal reports, market forecasts, statistical data and feasibility reports with the goal of fulfilling the expansion goals of a company. Many developers specialize in residential, commercial or industrial property development.
In addition to negotiating and providing financial analysis, you may be in charge of supervising supportive associates and sales agents. You will consult with public officials, construction contractors, utility companies, community organizations and lenders. Real estate developers consider taxes, zoning, land use restrictions and transportation issues in their proposals. You may also be required to arrange financing and construction contractors for projects. Often, long hours and travel to potential property sites are essential parts of the job.
Career Outlook and Salary Information
Job growth and income potential for real estate developers are extremely dependent on economic trends and recent declines in real estate investing may slow future employment opportunities. Stagnation or decline in property values may also impact your earning potential as salaries for real estate developers are often subsidized by bonuses based on sales and investment return.
The U.S. Bureau of Labor Statistics (BLS) projects an average employment growth rate (12%) for those in property management from 2012 to 2022. While economic downturns may negatively affect employment for many professionals in this field, an increase in number of senior citizens would provide the best employment opportunities for those with experience in senior housing or healthcare facilities. As of 2014, the BLS records a mean salary for property management professionals of about $66,000.
What Are the Requirements?
Skills and Attributes
As a real estate developer, you may be required to consult and negotiate with a wide variety of individuals with disparate interests. In addition to excellent negotiating skills, your work will require organizational, interpersonal, written and verbal communication skills.
Education and Licensure
As a real estate developer, your position may require you to engage in the resale of real estate properties. In order to do this, you will be required to obtain a state real estate license. Requirements vary from state to state, but generally include professional experience, approved academic coursework and the successful completion of an examination. For many career opportunities, you will need to obtain a minimum of a bachelor's degree in business administration, real estate or a related field.
Real Job Listings
Professional experience and advanced degrees are required for many real estate development positions. Specialized industry experience, knowledge of zoning laws and real estate regulations may also be essential. Here are a few real examples of job postings from May of 2012:
- A Miami investment group sought a project developer for real estate construction. Master's or doctorate degree in real estate was required. Preferred qualifications included three to six years of project management, as well as financial modeling experience. Base pay was $65,000 - $75,000 per year.
- A Chicago housing organization sought a director of real estate development to lead, analyze and propose financial structuring solutions. Five years of experience and a 4-year degree required. Compensation was $90,000 per year, depending upon experience.
- A large financial firm in New Jersey sought a real estate developer to work with portfolio and asset managers, as well as technology and operations groups, to implement and support a portfolio of $10 billion in property assets. Candidate must possess a bachelor's degree in information systems or a dual degree in finance. Preferred requirements included a Master of Business Administration degree.
- A New Jersey auto parts retailer was looking for a real estate development manager to support identification and completion of new stores and the relocation of existing stores. Candidate must have knowledge of negotiation, site selection, construction and contract law. A bachelor's degree plus three years of experience was required, along with a proven record of success.
How to Stand Out in Your Field
Specialized Advanced Degrees
In addition to coursework that fulfills licensure requirements, you may wish to pursue advanced degrees that prepare you for all aspects of real estate. Many universities offer a Master of Real Estate Development or a Master of Science in Real Estate Development. Graduate course topics may include property management, escrow, real estate finance, ethics and development law, construction management, capital markets and sustainable development.
Professional Certification
A variety of professional certifications are available for real estate developers. The National Association of Realtors issues several credentials, including the Accredited Land Consultant (ALC), Certified Property Manager (CPM), Certified International Property Specialist (CIPS) and the Certified Commercial Investment Member (CCIM). Other certifications include the Economic Development Finance Professional (EDFP) or the Housing Development Finance Professional (HDFP), which are issued by the National Development Council. Professional training certificates are also available through the Urban Land Institute, which include real estate development or real estate finance.
Alternative Careers in Development and Market Analysis
If property development isn't what you envisioned, you may want to consider other careers in finance or real estate development. The following options offer above-average income and either stability or rapid employment growth.
Urban Planner
Urban and regional planners participate in many of the same activities as real estate developers, such as property valuation and land use investigations. Other similar duties include consulting with contractors, public officials or community organizations, presenting development projects and adhering to zoning, building codes and other regulations. The key difference between these professions is that urban planners are largely employed by local governments, while about 20% of urban planners find work with architectural, engineering, management or scientific consulting firms.
Most urban planners receive a master's degree in planning, public administration or architecture. Based on BLS projections, these professionals should experience a 16% employment growth rate from 2010 to 2020, spurred by population growth and the increasing demand for sustainable design and development. Professionals involved in consulting services may have the potential to earn more than those employed by local government agencies. According to BLS 2011 data, urban and regional planners earned a mean salary of about $67,000.
Market Research Analyst
Due to increasing demand for consumer data and market forecasting, the BLS projects employment for market research analysts to increase by 41% from 2010 to 2020. Market research analysts provide forecasting for companies in a wide variety of industries. They evaluate market strategies and collect consumer data, translating complex information into written reports and oral presentations that include easy-to-understand charts and graphs. These professionals mainly find work as a company's analyst or in consulting services for a contracted firm.
Many of these professionals earn a bachelor's or a master's degree in business administration with emphasis in marketing and statistics. Some market research analysts choose to obtain the Professional Researcher Certification issued by the Market Research Association. According to BLS 2011 data, market research analysts and marketing specialists earned a mean salary of about $67,000.
