Considering Subdividing Your Property? 5 Questions to Ask Yourself

If you're thinking about selling off a portion of your existing land with a view to subdividing, there are a few big picture questions that need to be answered. The details and the subsequent best way to proceed will depend on the answers to these questions.

1. Is the Land of Sufficient Size?

Just because you might think that the land is adequate to host a new independent structure (or structures), your local council might have a different opinion. Land development is subject to very specific regulations. Check the extent of any permitted construction on the land, which is dependent on the size of the proposed lot. You might need to part with slightly more land than originally envisioned.

2. What Can Be Built There?

Were you planning to construct a single detached dwelling, multiple detached homes or even flats? Again, this is dependent on the available land, but zoning regulations pertaining to the height of structures, available infrastructure and street access will now come into play. These regulations can limit your endeavours.

3. Do You Know What Your Land Is Worth?

Whether you manage the project or sell off the land, you need to know whether the offer price is fair. In other words, is the offer from a developer significantly less than what you would make if you managed the project and sold the individual lots yourself? The latter option requires far more work, but the cost of this is difficult to quantify since much of it is just your time.

4. Will You Sell Off the Land to a Developer?

If it transpires that sufficient land is available and that the number of dwellings to be constructed make the subdivision financially viable, will you oversee the project yourself (hire contractors and be the point of contact for potential clients), or will you approach developers to purchase the site and proceed themselves in line with local zoning regulations?

5. Will You Manage the Project?

If you opt to manage the project yourself, can you arrange sufficient financing to see the project to completion? Will you be able to remain solvent if the dwellings don't sell as quickly as expected? Can you partner with a local real estate agent who can develop and implement a marketing strategy?

Most of the details cannot even be considered until you have an idea of the big picture when it comes to the legal restrictions and subsequent financial viability of your plans to subdivide. 

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