With the cost of housing rapidly increasing across Australia, property buyers have had to find new and innovative ways to expand their portfolios and maintain their profits. As a result, many first time investors and experienced investors are now turning to subdividing. All this gives rise to many questions like what does subdividing really mean? How do you start? And can you really profit from it?
What does subdivide & build mean?
Subdividing your property refers to the process of dividing land into smaller parcels. There are different kinds of subdividing, a strata title involves separating a single title into multiples, a second property involves splitting land into multiple lots and then building a property on the vacant land and a granny flat refers to a self-contained home extension.
Why do people subdivide & build?
People usually subdivide land for the purpose of selling or developing it. Of course, this is done with the end goal of making a profit from the subdivision. It can be a significant financial boost, allowing you to take advantage of rental returns and future capital growth as well as making use of under-utilised space.
How do I subdivide & build?
The first step in the process of subdividing is getting educated on council policies and legislation. Whether you are a first-time investor or an experienced investor, you cannot ignore the rules when subdividing land so it is important that you make sure your local town council allows property to be subdivided. You will also need to research the minimum lot size for subdivision and any other regulations that may be in place.
Once you are informed on local legislation and have chosen an area that allows property investors to subdivide, it is time to buy the land. This is a crucial step so don’t rush it! Consider whether you want vacant land or land with an existing building, though if you go for the latter make sure you get land with enough space for expansion or a second property.
Step three would be to put in the application to subdivide the property and wait. This can be a complex process, so check with the local council and contact professionals such as Investors Dream if required!