What is SubDividing?

To subdivide a piece of land is to make its parts greater than the existing parts. In property terms, if you subdivide a piece of land you can be cutting off an existing backyard to form a new separate property. It could be a vacant block of land that you are dividing into more lots depending on what the council allows based on the density for separate dwellings. An inner city block of 400m may be able to be divided into 4 new apartments whilst an outer new suburb might be required to have a minimum of 650m for each block of land and so a block size of 1000m cannot be further subdivided.

 

Location can count for everything with a subdivision and it helps to know the rules of developing when looking to do a subdivision. Dividing up land can also create situations in which properties share common land to access the road. This creates new rules and may require a body corporate to manage the property with two separate owners sharing common land.

A pure subdivision is a property investing strategy in its own right, but can be combined with development to make a higher profit. Options can also be used to purchase the right to buy property based on a subdivision that you may try and get through the council. Knowing what is allowed as far as land size, land use, connected services and the local council approval of other projects will determine how successful you can be with this strategy.

Land is a precious resource and has the unusual benefit of being an appreciating asset. Subdivision is also a great way to Joint Venture with developers or vendors where you can act as the middleman in the deal bringing it all together and being paid for your skill and knowledge.