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Thinking of subdividing? Then you need to read this.

Posted by Development Ready on Jul 24, 2017

On its most basic level, property subdivision is a simple enough equation in which one plot of land is divided into two or more for a greater return on investment.

But if all a developer ever had to do was separate land into different partitions to begin a lucrative subdivision project, everyone would be doing it. Unfortunately the reality of the subdivision process is far more complex and isn’t for the timid or the faint of heart. Engagement in a subdivision scheme means facing a lot of bureaucratic red tape, which can lead to endless frustration if you don’t tread carefully.

Because of the immense potential for disappointment and aggravation, it’s wise to know exactly what you’re getting into when choosing a property for subdivision. The following are a few pointers for selecting an optimal subdivision block and avoiding possible pitfalls when preparing to submit your land for a subdivision permit:

Get intimately acquainted with your zoning laws.

The reason subdivision projects can quickly become more than you bargained for is that these types of developments don’t just depend on the property owner. Instead, a subdivision must meet the requirements of a local council if it’s to proceed. These requirements will always include zoning restrictions that will directly affect any development plans. Therefore, if a piece of land catches your eye, and you feel the property might be a good candidate for subdivision, you should get to know the municipal zoning status limitations that apply to that particular plot.

Your zoning status (and the zoning statuses of any nearby properties) may constitute a “make or break” for your subdivision project. Always check with the local council before any purchase. Acquaint yourself with their planning schemes, read their website thoroughly and/or request an interview to discuss property guidelines. 

As you’ll see, zoning is only one small part of your subdivision due diligence. When looking to subdivide, you’ll be responsible for amassing a wealth of information on your property. Some of this information can be provided to you by your selling agent, but some of it will be up to you to uncover through your own research. 

Consider the size.

Another determining factor in subdivision approval is the size of the property. Municipal councils each have their own minimum square metre requirement for a proposed subdivision, but, as a general rule, it’s best to stick to properties over 700 sq m. Be sure you’re aware of your exact land area before undertaking a subdivision project.

In addition, you should always take stock of your buildable space when reviewing your land size.  Your Investment Property Magazine advises, “Some councils will factor in every inch of land on your property when calculating your total block size, while others exclude driveways and easements.” Given that councils will often require you leave room for a suitable driveway (usually measuring between 2.5 to 3.5 m), it’s a good idea to think about driveway space when adding up your square metres. Bear in mind your plot should be large enough to accommodate council minimums as well as sufficient driveway land.

Know your topography.

The slope of your property will have an immediate impact on your ability to subdivide. Land area minimums per dwelling may change from council to council according to the topography of your block. “A decent slope could restrict what you could build there,” property lecturer Peter Koulizos observed in an interview, adding these restrictions are often applied so that municipal councils can “ensure the property has enough useable land” (i.e., that the slope won’t detract from the livable dwelling area). As such, you should always take your property incline into account before making any major development decisions. Remember, too, that any construction built on an angle will need added features such as retaining walls that are bound to increase overall costs.

Take note of your specific location.

As with any real estate endeavour, location matters. When scouting for potential subdivisions, you should consider the exact address of the chosen property as well as its surroundings. Corner plots, for example, will make for easy and convenient subdivisions that will yield plenty of desirable street frontage, while a property’s general proximity to shopping centres, schools and transport hubs will make the land more attractive to buyers and renters. Be warned, however: Councils will often request that you follow strict guidelines when it comes to your location. Prepare to spend extra if your block doesn’t meet local standards for guttering, kerbs, etc.

If you’re planning on building a housing complex, you should also take your neighbourhood’s residential density into consideration. It may be that your local government has placed a limit on these types of dwellings, and your application for subdivision may therefore be dead on arrival.

Be certain of your structure.

Last but not least, be sure to exercise common sense if you’re planning on subdividing an existing structure. Any building earmarked for subdivision should have a strong skeleton and be able to withstand major renovations. This aspect of your due diligence research will be essential for keeping costs low. Nothing’s worse than having to build an unexpected wall or redo an entire floor.

Though subdivision can bring you a great deal of profit, it also carries with it a great deal of risk. When it comes to deciding on a sub-divisible property, you should research your property to the point of exhaustion, ask an exorbitant number of questions and follow this simple rule: No amount of preparation is too much.

Best of luck. 

New Developments, Deals, Industry Trends, Property Advice, Industry Partners
New Developments, Deals, Industry Trends, Property Advice, Industry Partners
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