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In the real estate industry, developers and promoters are often referred to interchangeably. And although they often work closely together, their roles are not exactly the same.
A good understanding of the difference between the two figures is key for those who want to invest in real estate projects or seek alternative financing to develop them.
What does a real estate developer do?
The real estate developer is the one who turns an idea into a complete real estate project. He is usually in charge of all the phases: from the acquisition of the land, to the construction, sale or rental of the property.
Your responsibilities may vary by project, but generally include:
- Search for and acquire land with potential.
- Study the technical, legal and economic feasibility of the project.
- Coordinate the technical team: architects, engineers and builders.
- Securing full or partial financing of the project.
- Supervise the work to ensure compliance with deadlines, costs and quality.
- To commercialize the final product.
This profile requires strategic vision, knowledge of the market and the ability to take risks. It is common for them to work with investors, banks or financing platforms such as wecity, where they can obtain part of the capital needed to move their idea forward.
What does a real estate developer do?
The developer is the figure that drives the execution of a real estate project. Its role is legally defined in Law 38/1999, on Building Regulation, and is linked to the steps prior to construction.
Its main functions are:
- Have title to the land or a right that allows you to build.
- Obtaining licenses and administrative permits.
- Commission project design and approve modifications.
- To contract the different agents involved in the work.
- Assume legal responsibility for construction defects.
- Deliver to the buyer all final documentation (such as the Building Book).
If you are considering promoting your own project, you may be interested in learning more about how to benefit as a real estate developer from the financing you will find in wecity through crowdfunding.
In many cases, the promoter and the developer are the same company or person. It is also common that the promoter is the one who drives the project and looks for a developer to manage it integrally.
Comparison: developer vs. real estate developer
The following box shows the most important differences between the two profiles:
| Feature | Real estate developer | Real estate developer |
| Main role | Executes the project from start to finish | Drives the project forward and assumes legal responsibilities |
| Beginning of the process | You can buy the land or get involved later | Must be the owner of the land or have the right to build |
| Relationship to financing | Seek funding and manage the budget | Can provide capital or seek external financing |
| Legal responsibilities | Not necessarily directly responsible | Responsible for construction and legal defects |
| Approach | Project management, marketing and final delivery | Legal and administrative management, permits and insurance |
Can developers and promoters collaborate?
Yes, and in fact it is very common for them to do so. In some cases, the developer drives the project, but needs technical or financial support to carry it out. That is where the developer comes in, who may assume part or all of the execution.
It can also happen the other way around: a developer spots an investment opportunity, but collaborates with a local developer who has the land and regulatory knowledge to expedite the paperwork.
These collaborations are usually based on specific contracts that clearly allocate functions, risks and benefits.
For a better understanding of this key figure, you may be interested in this detailed analysis on what a project promoter does.
And what is the role of the investor?
On platforms such as wecity, developers and promoters find an alternative financing channel that allows them to move forward without relying solely on banks or institutional funds.
At the same time, individual investors can participate in projects with different strategies: obtaining profitability via crowdlending (loans to developers) or via crowdfunding (participation in real estate projects).
More and more industry professionals are opting for financing formulasfor developers that combine agility, flexibility and access to diversified capital.
This relationship allows projects with potential to go ahead, and each party, developer, promoter and investor, to obtain benefits according to their contribution and risk profile.
Should you invest in this type of project?
Knowing the difference between a developer and a promoter helps to better understand the risks and opportunities behind each real estate project.
If you are thinking of investing through a platform such as wecity, knowing who is driving the project and how the operation is structured is key to making decisions with criteria and perspective.
