Development vs Construction
I am reading IRS Publication 925, "Passive Activity and At-Risk Rules". In Real property trades or businesses paragraph it lists development and construction as two separate trades. Scanning the forums, I do not see anybody touching this topic and I feel it would get a great response with all the potential in the forum space.
Q: What is the difference between development and construction?
I consider myself a developer. I hire a general contractor to do the work for me. Developers develop property by buying the property having designers and architects draw up the plans then hire a general contractor who performs the construction side of the work. So developer is the top of the food chain then comes the gc.
They are in the same ball park but not the position.
Hi-In my circle, development is the drawing of lot lines and the installation of utilities and streets. Construction is what happens on the lots that the developer has recorded.
KV
Along with the above, I tend to think of development as what happens before construction starts...
Great Points above. One observation: A contractor is capped by the market place on how much he can charge ( maybe 20-25%) and still win bids. A developer can make a 100% (or more) return. More risk more reward.
Contractors become developers later in their careers but it rarely goes the other way.
I don't know about top of the food chain Joshua lol, we have alot of bottom feeder that get paid well also but have to agree with Scott the Developer has the deal before the contractor comes to the table . The GC are a critical part but not the first part and not the last part . The developer is form concept to finish that why his return is bigger but he takes more risk.Contracor the name says it all he is contracted out to do a major task for the developer. The developer is the one who develop the deal and see it threw from concept to finish .After Developer pays contractor property designer cost of capital minus expense etc he gets paid .Contract has a set pay based on bid and change orders for the project.
I do both, but to me, development is "curb down", ie: roads, grading, clearing, utilities, stormwater, etc... construction is vertical construction, or "curb up".
So if you buy a plot of land and subdivide into let's say 10 lots, get it ready to build on by installing the infrastructure, that's a developer to me, then a GC comes in and buys lots to build on. At least that is how it happens around here...
This essay argues that the polarization of our public debate over embryo-destructive research may be due, to a large extent, not to different valuations of individual human life but to different conceptions of the process of gestation, with one group treating the process as a making or construction and the other treating it as a development. These two incompatible models of reproduction are shown to explain the various positions commonly encountered in this debate over the treatment of embryos, and to a significant degree those encountered in the debate over abortion as well. Finally, the historical, theoretical, and intuitive strengths of each model are examined.