Some properties seem ideal for subdivision, but it’s difficult to know until you start digging into the details. Subdividing can be a profitable investment strategy, but it’s worth completing a detailed feasibility study of physical, legal and cost factors to avoid unwelcome surprises.1
Before you start planning, check the neighbourhood for precedents that is, recent developments similar to what you are considering. If there are some in the area, it could indicate that the council may look favourably on your application.2
From there, consider engaging a consulting surveyor to do a site survey. They may also be able to assist with some of your due diligence before you start the subdivision process.1,3
Consulting surveyors can often help answer a lot of questions (including whether a subdivision is physically possible on that block) and develop engineering plans and council applications.You can also source expert assistance from a conveyancer, property lawyer, architect, urban planner or engineer to ensure everything is ‘by the book’.4
* Desirability of land to be subdivided to buyers and/or possible_tenants.
* Precedence and sales results of similar developments in the area.
* Is the land itself valuable enough to support the subdivision or do you need to build as well?
* Local council planning regulations, including land zoning, minimum lot size, setback and neighbourhood character requirements, rates and heritage listings.
* Access to water, sewerage, power, telephone lines and gas.
* Driveway access requirements.
* Fees, including those for lodging council applications and plans, stamp duty, legal assistance, surveying, development, civil works and service connections.
* Tax implications and interest on your loans.
* Time you have available to spend on the project.1,2,3
1. Chivers, Jo, ‘Subdivision can make you money, but there is a lot of potential for costly mistakes,’ propertyobserver.com.au, 22_March_2012.
2. ‘Subdivision Melbourne – The 5 tests your property must pass’. pillarandpost.com.au, 1 ovember 2009.
3. Consulting Surveyors New South Wales, ‘Subdividing land’. acsnsw.com.au, accessed 25 October 2013.
4. Devine, Aidan, ‘Land Subdivision 101’. your investmentpropertymag.com.au, accessed 25 October 2013.