A real estate developer or property developer makes improvements of some kind to real property, thereby increasing its value. The developer may be an individual, but is more often a partnership, limited liability company or corporation.

There are two major categories of real estate development activity: land development and building development (also known as project development).

Land developers

Land developers typically acquire raw land (real property with no improvements or infrastructure) and improve it with utility connections, roads, earth grading, covenants, and entitlements. Infrastructure improvement provides a base for further development of built improvements. Covenants define the context in which future development of built improvements may take place (often in the form of deed restrictions on particular parcels: a sort of "private zoning code" limited only to those properties).

Entitlements are secured legal permissions from regulatory bodies (typically in the form of permits, but sometimes in the form of re-zoning or planned unit developments). Once these improvements have been made to the raw land, it is typically subdivided and sold piecemeal at a profit to Building Developers or individuals.

Building developers
Building developers acquire raw land, improved land, and/or redevelopable property in order to construct building projects. The buildings are then sold entirely or in part to others (usually for a significant profit), or retained as assets to produce cash flow via rents and other means. Some building developers residential real estate investment have their own internal departments for designing and constructing buildings (more common among smaller developers), while others subcontract these parts of the work to third parties (typical of larger developers).

The process of real estate development
Although the process for development of real estate varies from project to project, the various phases can be categorized roughly as follows (in approximate chronological order):

• Market research
• Site selection / feasibility analysis
• Due diligence / preliminary pro forma
• Property acquisition
• Project design / refined pro forma
• Obtain entitlements
• Financing / final pro forma
• Construction
• Lease-up / sales
• Operation (in cases where the project is retained as an asset)