Land development is the process of purchasing a parcel of land with the intent of either developing and building on it, or holding onto it for long-term appreciation. Land investing has an array of configurations, but will essentially provide the multitude of advantages from other types of investments; whether it be from selling the property, renting it out for passive income, or simply earning appreciation while performing little to no work.

A plotted development refers to a gated community or residential subdivision where people buy individual house plots. In addition to subdividing the land, the developer is required by law to provide the roads, parks and utility connections for the plots.

Before proceeding with the development, however, there must be evidence that the project is feasible or that market acceptance of the end-product (single family houses, offices, warehouses, etc.) is highly likely. This step is important even though the land developer may or may not be the developer of the final product. In other words, in the land development phase, the developer must anticipate and understand the demand for the final product (or products in the case of a mixed-use land development). For example, the economic drivers may alter the land use for residential, industrial, or for commercial developments.

In residential land development, it is common to find firms specializing in the acquisition of raw land in suburban fringe areas and developing sites for single family detached units or for multiple uses, such as combinations of single family units, multifamily apartments and cluster housing.

Based on the market segment in which the end use will likely sell, the land developer

  • Acquires land
  • Develops a land use and traffic circulation plan
  • Constructs streets, lighting, and subsurface improvements (utilities, drainage, sewage)
  • The developer then subdivides individual sites, and sells smaller sites to builders and project developers.
  • The developer may also retain some retail sites for later sale if the site has suitable highway frontage.