The Difference Between a Real Estate Dealer, Investor, and Developer

There are different paths to a great career in real estate, and choosing the right way for you depends on your researching the differences, and knowing what you enjoy. So, if you are interested in getting into real estate investment, these are three of the key career paths you should consider. 

Real Estate Dealer

As a real estate dealer, your job is principally concerned with the buying, renting, and selling of houses. A real estate dealer, in much the same way as an art dealer, is focused only on holding property short-term before selling it, and not for long-term investments. Real estate investors and real estate professionals can both be classed under the umbrella of real estate dealers, but they have differences as well. Keep in mind that, as this will be your main source of income, you’re likely going to be subject to FICA tax.

Real Estate Investor

Real estate investors are generally people who are looking to buy a property and then rent it out over a long period of time in order to secure a long-term profit. You might even decide you would like to hire a property manager to deal with your properties and help make the right decisions for you. This will typically not be your main source of income, but, rather a side job to bring in alternative revenue. Real estate investors could be individuals, or they might be specially formed LLC companies, designed for the purposes of investing in property.

Real Estate Developer

Real estate developers are a little bit different to the other two on this list, and it’s important to understand why. Principally, a real estate developer is someone responsible for both renovating and re-leasing existing properties, as well as purchasing raw land that can be used to develop and build new properties and housing projects. You are going to need qualifications to do this, and a college degree is a must. This is a highly lucrative career path should you choose it, and it is important to make the most of this now by understanding what you need to do in order to achieve success, as well as the complexities involved in things like planning, zoning, conversion, and permits. 

All three of these have their advantages, but each has negative elements to them as well. You need to know what is required of being a real estate dealer, investor, or developer, how they differ, and what you can do to pursue a career in each. Keep in mind that in general there are implications (such as tax) that differ between the real estate roles, so if you plan on buying real estate in a different State, recognize that there may be slightly different regulations from your home State. Better understanding the nuances of each of these rules will help you know what your role is in terms of the State, taxes, management, and upkeep, to make a good investment.