{"id":13244,"date":"2017-08-28T01:00:29","date_gmt":"2017-08-27T15:00:29","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=13244"},"modified":"2017-08-28T01:00:29","modified_gmt":"2017-08-27T15:00:29","slug":"land-subdivision-101","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/land-subdivision-101\/","title":{"rendered":"Land subdivision 101"},"content":{"rendered":"

A land division is the way developers create new allotments.\u00a0 When a developer or land owner creates a new allotment, they increase the value of their land holding by utilising the development potential of their property. This is often referred to as a subdivision, cutting an allotment into two or creating an additional allotment or a new title.
\nOne of the misconceptions surrounding subdivision is that the development of land always requires the construction of a house on the land and that this creates the profit of the development. This is most often not the case. For many projects, the underlying value of a property development is most often the land not the building.\u00a0 You can create a new allotment by undertaking a land division and then sell the allotment without having to build. This process is much less risky, more profitable and less time consuming.
\nStep 1. Conduct due diligence<\/strong>
\nBefore you buy a property for development, the first step is to undertake due diligence. This is the process of gathering all the relevant information that affects the property. This information is mostly contained in the Council searches that the agent obtains when selling a property.
\nThe search contains a list of all the information that relates to your property such as the zoning, the council rates, if the site is known to be contaminated \u2013 that is if there are any outstanding issues affecting the property and any previous permits for development on the property. The other important piece of information you will also need to check is the certificate of title. This document contains all the relevant information that applies to the property such as the owner\u2019s details, if a mortgage is registered on the property and whether there are any easements for services and utilities such as storm water, water, gas electricity.
\nThe most important factor which affects the development potential of your property is the planning and the zoning. You need to verify what the zoning for your property is and then confirm this with your local Council. You should then go to the local council and obtain any information they have regarding development within the zone. Councils generally have guidelines which they provide the public which often summarise the key points that need to be considered when you subdivide your property.
\nYou should also undertake market research: gathering information about previous sales in the area, looking at what is on the market now, analysing how much similar development sites are selling for. You also need to analyse how much your proposed development will sell for and this is also done by looking at other comparable sales and what is currently on the market.
\nFinally, before you start developing land you should always have a feasibility study or development strategy plan. This is a document that details your goals and objectives for your development and the risks and potential development profit from your project. It also shows the time required to complete the project.
\nThis plan is really important because it provides you with a guideline for your entire project and it helps you keep track of your goals. Often in development projects we get caught up in too much detail and lose our way. This is very dangerous because it can lead to the erosion of all the development profit and an overall bad return on the property investment. For example sometimes people forget about interest on their borrowings when they undertake a small project. They say I made a profit but often it takes them two years to complete the project and during this time they have paid a significant amount of interest which can often mean their profit is halved.
\nStep 2. Appoint your team<\/strong>
\nOne of the mistakes people make when developing their land is that they try to do everything by themselves to save money. This often results to severe which can be very costly. This also leads to a big loss of time which inevitably ends in more interest costs and a loss of development profit. To avoid this problem it is important that from the beginning of the project you identify which professionals you need to help you develop you land.
\nA typical team will include the following people:<\/p>\n