When delving into the world of property investments, one must consider the potential benefits of subdivisions and developments. These processes, while intricate, can significantly enhance the value of your property and maximise your return on investment. Subdividing and developing land involves splitting a single property into multiple sections, each with its own title, which can be sold or developed separately.
What is a Subdivision?
A subdivision involves dividing a piece of land into smaller lots that can be sold or developed independently. Some common types of subdivisions referred to in Western Australia include Strata Title, Dual Occupancy, Battle Axe, and Rural Subdivisions. Each type has its unique characteristics and suitability depending on the property and intended use.
Strata Title
Strata title is commonly used for multi-level apartments and townhouses, where individual ownership is combined with shared common areas like gardens or driveways. These areas are managed by a body corporate or strata company, which oversees maintenance and levies.
Dual Occupancy
Dual Occupancy involves building two separate dwellings on a single block, each with its title. This setup maximises land use and offers flexibility for ownership or investment.
Battle Axe Subdivision
A Battle Axe Subdivision involves subdividing a rear portion of a property, often accessed by a narrow driveway resembling a handle. This layout maximises land use while providing separate titles for each lot.
Rural Subdivisions
Rural Subdivisions involve dividing large parcels of land for purposes like farming, grazing, or rural residential living. These subdivisions offer spacious lots, often designed for agricultural use or country-style living.
The Benefits of Subdividing and Developing
Subdividing and developing land can increase your property’s value and has the opportunity to provide multiple revenue streams. Whether through selling the subdivided lots, building new properties to sell or rent, or simply holding the land until it appreciates, there are various ways to profit.
Steps to Subdivide and Develop
The process of subdividing and developing a property is complex and involves several critical steps:
- Research and Planning: Begin by researching local zoning regulations, minimum lot sizes, and other requirements. Assess the feasibility of subdividing your property and consult with professionals such as surveyors and town planners.
- Site Analysis: Evaluate the property’s site conditions, including topography, soil type, and access to utilities. Identify any constraints like easements or environmental factors.
- Engage Professionals: Assemble a team of experts, including surveyors, engineers, and legal advisors, to help prepare the necessary documentation and guide you through the process.
- Concept Design: Develop a concept plan for the subdivision that considers lot sizes, layout, and utility connections through a Licensed Surveyor.
- Pre-application Meeting: Engage a Licensed Surveyor to arrange a meeting with your local council to discuss the proposed subdivision and obtain feedback. If undertaking the project independently, you can choose to handle this process directly.
- Development Application: Submit a detailed development application to your local council, including plans, engineering reports, and environmental assessments.
- Review and Approval: The local council will review your application and may request additional information or changes. Once approved, the council will issue a development permit.
- Detailed Design and Documentation: Develop detailed engineering designs and utility connection plans based on the approved application.
- Construction: Carry out necessary construction work, such as building new roads and installing utilities.
- Final Survey and Plan Registration: Engage a licensed surveyor to prepare a final plan of subdivision and submit it for registration.
- Obtain New Titles: Apply for new titles for the subdivided lots through Peacock Settlements.
Costs Involved in Subdividing
The cost of subdividing a property varies depending on location, the complexity of the work, and the professional fees involved. Simple subdivisions may cost less, while more complex projects can be significantly more expensive.
Pros and Cons of Subdividing Investment Property
Subdividing an investment property comes with both pros and cons, offering opportunities to increase value and generate multiple income streams, while also presenting potential drawbacks such as reduced buyer appeal and high upfront costs.
Pros:
Increased Property Value and Equity
Subdividing a larger property into smaller lots often results in higher overall property value, unlocking equity that may not be accessible with a single, large parcel of land.
Multiple Revenue Streams
By subdividing, you create opportunities for multiple revenue streams. You can sell individual lots, build homes to rent out, or mix and match strategies to maximise returns.
Investment Flexibility
Subdividing gives you the flexibility to pursue different investment options, such as selling some lots immediately while holding others for future development, or renting out subdivided properties for long-term income.
Easier to Sell Smaller Blocks
In certain markets, smaller, more affordable blocks are easier to sell as they appeal to a broader range of buyers, including first-time homeowners or investors seeking lower entry costs.
Cons:
Reduced Appeal for Some Buyers
Smaller blocks created through subdivision may reduce the property’s overall appeal to some buyers, particularly those looking for larger spaces or more privacy.
Time-Consuming and Expensive
The subdivision process can be both time-consuming and costly, involving fees for planning, approvals, infrastructure upgrades, and legal work.
Market Fluctuations Impact Profit
The success of a subdivision can be heavily influenced by market conditions. Changes in demand or a downturn in the property market can affect the profitability of subdivided lots.
Subsidivide With Peacock Settlements Today!
The key to successful subdivisions and developments lies in thorough research, careful planning, and consulting with professionals.
By understanding the process and costs involved, you can maximise your investment and reap the benefits of subdividing and developing land.
Need more info? Contact us at Peacock today!