A residential land developer is essential for building build-to-rent communities. These professionals manage a significant portion of the process that leads to future success for investors. Not sure what a residential developer is? Then read our guide to learn exactly what they do and how they affect build to rent developments. This is essential for any BTR investor to know, as it can affect the outcomes of your investment if you choose the wrong developer for the job.
Interested in investing in luxury communities of single family rentals? Get in touch with our experts now to learn more about communities built by Landfinity.
What is a Residential Land Developer?
A residential land developer develops land to use for residential communities. Essentially, they take raw land and turn it into a finished community. From there, build to rent investors can purchase the property and begin renting to tenants for profitable passive income. This is the team that affects everything from the layout of the community to the individual designs for each house in the community. They are particularly important for BTR development, as renters want a lot of things from single family rental communities.
Tasks a Residential Land Developer Performs
So, what exact tasks does a residential land developer perform? They basically control and manage the entire development process, from finding the land to putting the finishing touches on houses and commercial buildings in the community. There are many different moving parts to this process, each requiring a significant level of expertise and knowledge not only about land development, but also the local market for BTR renters. Here are some of the processes the developer handles:
The Developer Identifies Prime Locations and Purchases Land
One of the very first things the developer does is find and purchase land. This requires a great deal of research and experience. After all, choosing the wrong location can have huge ramifications on the later profitability of the community. As such, the residential land developer must choose wisely. This means identifying good locations that will have high demand from renters. Otherwise, the community could end up looking like a ghost town.
Additionally, it’s important to ensure that they can turn the land into a residential community. Some land just isn’t a good fit for building houses on. In other cases, zoning laws forbid certain types of development. The residential land developer takes all this into account when looking at potential acquisitions and makes highly informed decisions on where and when to purchase land for development.
The Developer Subdivides Land for Maximum Future Profitability
After acquiring the land, the developer then subdivides it into different lots. These lots will become property lines where private homes and yards will sit. This is critical for build to rent communities, as these renters are looking for the space and privacy that single family homes offer. It’s critical to divide the land in the right way to create the right amount of space and privacy for each home, yet optimize the amount of space to keep profits high for future investors. Subdividing land also requires a lengthy planning and permitting process, including drawing up plans and submitting them for approval before beginning work on the land.
The Developer Makes Raw Land Constructable
Next, the residential land developer transforms raw land into land that we can build on. Before any construction can begin, there are several steps that need to happen first, including grading the land, building utility connections, and creating roadways. This allows construction crews to come in and start building the homes for the master planned community development.
Grading the Land
Before construction begin, crews need a nice, flat surface to start with. The problem is that most land isn’t perfectly flat with compacted soil. Therefore, one thing the land developer does is land grading. This involves leveling the land and making sure the soil is compact enough to build on. During this process, they’ll also build any necessary drainage structures like retention ponds to protect the land from pooling water.
Adding Utility Connections
The residential land developer also needs to create utility connections to the land. This includes things like water supply, sewage, electricity, as well as things like cable and internet. With raw land, these aren’t built in, the developer must construct connections that go from the individual lots to the main connections from the city or MUD. Once again, this requires significant planning, permitting, and work to ensure the community has everything it needs.
While a lot of the equipment needed for land grading and utility additions can drive over bumpy dirt roads, a lot of construction equipment cannot. Therefore, it’s often necessary to build roads before construction can begin. Things like individual driveways and sidewalks might wait until later, but creating the main roads for the community is a must. As such, the developer needs to plan roadways that suit the community plans, get approval from any overseeing authorities, and build them.
The Developer Constructs Buildings
After the land is developed, then we can begin construction. The construction phase includes designing and building homes and commercial buildings in the community. These are all crafted to draw in high earning renters as well as successful commercial renters for business corridors. The developer manages this entire process from start to finish, creating a cohesive look for the community through things like architecture and landscaping while also providing a variety of options to suit different types of renters from the target demographic.
Why Invest in Communities from a Seasoned Residential Land Developer?
As you can see, the developer has a significant impact on every part of the community development process. They determine the location of the community, how many homes are built, as well as the exact design of the buildings in the community. Therefore, it’s critical for investors to choose the right developer. Otherwise, you may end up with a poor performing real estate investment for your fund. Make sure you choose communities built by experienced developers to reduce risks for your portfolio.
Landfinity – Trusted Luxury Residential Land Developer for Investors in Texas
Our team at Landfinity offers decades of experience in land development, residential construction, and commercial construction to create complete communities that attract high earning renters. We specialize in build to rent community development to appeal to single family renters that are willing to pay more in rent to live a suburban life. Our team creates luxury communities in major markets in Texas. Our communities are the ideal investment opportunity for institutional investors looking for long-term real estate investment income. Contact us today to learn more about our communities.