Developing any land asset is a complicated and involved process. It’s one that requires exhaustive research and careful planning. Many people use the terms “land development” and “real estate development” interchangeably. However, while the two processes are related, they’re very different.
Raw land development is the process of transforming a plot of land into a level site that can accommodate buildings. This process also includes laying property lines and running utilities. A typical land development project consists of three key stages, creating a full life cycle. Get to know them so you can set yourself up for success on your next development project.
The process of developing land assets
Raw land development can be divided into three basic stages: pre-development, preconstruction and construction. Each stage includes several substages that compound on each other, and every successive stage is just as important as the next. The following steps will take you from raw, undeveloped land all the way to building construction.
Every successful development project starts with selecting the right plot of land for building. As you search for suitable sites and shortlist some potential options, here are the steps you should take.
- Research: You and your development team must educate yourselves on the plot itself and all surrounding areas. Consider things like access to major highways, proximity to existing commercial areas, visibility and more.
- Permits and zoning: Before you buy any plot of land, you should understand exactly what you can and can’t build on it. You’ll need to know all relevant government regulations and limitations you’ll face with a given parcel of land, and you’ll need to pull all required permits before moving forward.
- Feasibility: This is one of the most important stages in the pre-development process, consisting of a systematic study to predict the viability of building your project on a given plot of land. A comprehensive feasibility study covers vital data and information, including funding required to complete the project, government regulations, market opportunities and risk factors.
- Land acquisition: The final step in the pre-development process, land acquisition, refers to purchasing a plot of land that you’ve found to be suitable for your project. If you’ve done your research before signing the contract, you can have confidence that you’re making a wise decision for all relevant stakeholders.
You’ve found and acquired the perfect land asset. The next steps, consisting of the preconstruction phase, will determine how smoothly construction will proceed.
- Planning: Whether you’re simply prepping parcels to sell or you’re building on the land, you might already have a good idea of what you want the end result to look like. Involve architects and engineers in this step and establish a schedule. Once designs are finalized, revisit with local governments for project approval.
- Permitting: You’ll need to pull all permits to begin the construction process. Most developers complete research on permitting in the pre-development stage, so this process should consist of checking off permits you’ve already pulled.
- Horizontal construction: This phase includes any terraforming work like leveling and grading. It also includes running all necessary utilities before construction starts.
- Choosing a contractor: After you’ve settled on a budget, secured financing, completed project planning and prepared your chosen plot of land, you’ll need to select a general contractor to carry out construction.
With all plans and permits finalized, construction can begin. No matter the size or scope of your project, the construction phase is characterized by waiting, monitoring and managing. When complications arise—and they always do—you’ll need to work closely with your contractors to find the best way forward.
While planning and preparing is vital to the success of any land development process, it’s almost inevitable that there will come a time when you need to alter your plans. You’ll also have to abide with regular inspection protocols, which is another reason why choosing a reputable construction planning partner and general contractor is so critical. You need to work with teams you can trust to follow all codes and regulations so that you can keep your project on time and on budget.
Lay the foundation for a successful development
The land asset life cycle of any development requires a complicated development process with plenty of moving parts. The most important thing to remember is that you must do your due diligence and research before you move forward. Finding the perfect location for a development is never easy, but working with an experienced construction planning partner can make all the difference.
Sandbox Development is ready to guide you through the process from start to finish. From due diligence to construction management, we take a comprehensive approach to managing land assets, adding value, mitigating risk and maximizing efficiency at every stage of the land asset life cycle. Contact us to get started.