When people see a large block for sale, they often think of subdividing.
While real estate agents often use subdivision as a selling point, the reality often isn't smooth sailing.
Property and land development rules differ between states and can change over time - meaning, some blocks aren't even eligible for subdivision. Each council will have its own minimum lot size.
It is vital you research your local laws and restrictions before purchasing a block or starting on your subdividing plans.
Here are three major things to consider before purchasing a plot for subdivision:
1. The property type
A corner block with two street frontages will have an advantage. However, you should stick to looking on the outskirts of cities for larger blocks of land. Just make sure there is still a demand to buy in this area.
2.Dividing your current plot...
You could subdivide the land on which your home is already. However, while this may make economic sense, you will lose control over what is built right next door - or how long it will take to build!
3. Subdividing and building...
If you subdivide and build, you need to make sure you can finance the project. Start with a realistic target of how much the completed property will be worth. Subcontract costs to make sure it's profitable.
You may also have to pay stamp duty, legal fees, service connections and council costs.