Positive Gear Property by Subdividing

So many people think that subdivision or dual occupancy is a simple process, where you buy a block of land, split it into two, three, or four blocks, and then trying to sell it for a huge profit margin. However, in reality the process is more complicated then we may think.

The reason why it’s a complicated process is because for you to subdivide on a block of land it is vital to get approval from the local council, as each council will have their own regulations on what can be done, and what can’t be done. Remember, that getting approval from your local council can be a sluggish process, and there is a possibility that you may not even get an approval from the council. Therefore, if you want to maximise your time, and avoid wasting time, it’s important to consult the local council first and familiarise with the regulations of subdividing, or consider consulting a buyer advocate to assist you in the process.

For your property to be permitted for subdivision, it needs to comply with the council’s minimum lot size. Other requirements involve the width of the property, the overall area and zoning. Zoning is important when it comes to subdividing, as there are many areas where you cannot subdivide due to zoning. Requirements are accessible on most of the council websites.

 


Top Tip’s On Making a Profit by Subdividing

 

  1. Corner blocks are Hotspots

If you buy a corner block property for the right price, this is like finding gold. The reason is that corner blocks provide easy access for both properties, and it provides street frontage for both properties as well. Remember that if the corner block has guttering and a curb on one side, the council may ask you to complete this on both sides, in order to get an approval for subdivision. A 50-metre kerb including guttering could cost you $30,000, which could potential minimise your profit margin.

 

  1. Level or gentle sloping properties are the way to go

Before purchasing a property, try to subdivide on blocks that are level, rather than sloping blocks, as it will be cheaper and easier to subdivide. If you decide to subdivide on sloping blocks, it will require you to pay a lot more for extra services, and the council will demand a greater minimum size plot. For example, a minimum size plot for a sloping block may be 400sqm, compared to 300sqm for a level block.

 

  1. Find a property with a minimum plot of 600sqm

Every council will have their own guidelines on the minimum land size that you are able to subdivide on. But when you look at Melbourne/Victoria as a whole, properties that are larger than 600sqm are normally allowed to subdivide.

 

  1. Ensuring there is adequate room for a driveway

Most councils will require that the property will have enough space to build a driveway between the bound of the property and the house. Therefore, before you decide to buy a big block of land to subdivide, ensure these is adequate space for a driveway, this will range from 3 – 3.5 metre, comprising of any landscaping.

 

  1. Zoning Rules 

  2. Positive Gear Property by Subdividing.jpg

Ensure that you consult with the local council about zoning. If you plan to build a townhouse or a unit (example project), and make sure that the property is zoned for each of the structures.

 

  1. Property Structure

If you purchase a block, that has an existing property on it, make sure you get it inspected, to ensure that is has been built properly, in order to keep the cost of constructions to a minimum.

People often have the ambition to subdivide and try to make a huge profit margin, however they do not always have the knowledge to do so. However, Buyers Agents can assist you through this process of finding a property or a block that can be subdivided.

At Wise Real Estate Advice, we ensure all boxes are ticked and that sincere care is taken when providing a buyer with the wise advice and action required throughout the buying process. To speak to one of our friendly buyer’s agents click here to fill out an enquiry form or just simply call us on 1300 00 WISE.

By Mark Ribarsky.

 

 

More questions on Dual Occ. Projects? Check out our FAQ’s page

 

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Positive Gear Property by Subdividing
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Positive Gear Property by Subdividing
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Looking at building a property portfolio without negative gearing? Top tips to make a profit by using a subdivision strategy to positive gear.
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Wise Real Estate Advice
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