Subdivision is one of the quickest ways to manufacture equity, but there are plenty of traps to the unwary. We guide you through the process one step at a time to help you avoid the risks and maximise your profits.
A land division is the way developers create new allotments. 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. This is one of the simplest ways to make profit from development.
Development is not always about building
One 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. The land division is the simplest way to make the most money out of development without the lengthy time, effort and greater risk involved in the construction process.
This may seem somewhat confusing but it really isn’t. The fundamental resource required for property development is land. Land is therefore the key to making development profit not building. Building is really only one means to add value to the land. It is easier and more profitable to develop by subdividing land and not building. 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.
For your comprehensive step by step guide to subdividing your block of land, read the December issue of Your Investment Property magazine, out on sale now.
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