Subdividing explained in 6 easy steps.

Thinking of subdividing your land? If you’re completely new to the real estate and developing game you’ve probably got a bunch of questions about the subdivition and development process. If that’s true for you then you’re in luck today, because in this article we’re going to unpack, step by step, precisely what you need to do to develop real estate. So, read on to familiarise yourself with the process.
 
Step #1. Acquire Some Land
 
If you’re lucky, you already own a block of land that’s suitable for development. Ideally you want a block that is large enough to subdivide, that is zoned appropriately for residential development and that is free of major encumbrances.
 
If you’re not already a landowner, then you need to get on the hunt for an appropriate property. If you have an appetite to go at it alone then awesome, if not or you are time poor consider engaging a professional property development consultant.

Again, you need to consider the above aspects that make a property suitable for subdivision and development. In most cases, if possible, you are looking for a property that has an older rundown existing house – if the property is old and run down it usually (not always though) means you won’t have to compete with owner occupiers as they are generally looking for something they can move into and doesn’t look like it’s falling down!
 
It’s important, though, that you do adequate pre-purchase due diligence. This means considering the dimensions of the lot, the zoning, any encumbrances and even the gradient of the land. There are countless things that need to be considered so if it’s not something you have experience in then we highly suggest you look for some help. No matter how well you do everything else in the property development process, if you identify and purchase the wrong site or a site that has complications you weren’t anticipating it can cost you serious amounts of time and money – it’s critical that you need to get this first and most important step right.
 
The location of your property is also important, not just for the obvious reasons such as amenities, parks, schools, train stations and shops. You want to find undervalued suburbs where the property dimensions lend themselves to developing. You also want to identify areas where you can see developments, such as the one you are considering undertaking, have precedents in the area.
 
Step #2. Preliminary Design and Town Planning
 
The first thing you’ll do after purchasing a property is call in a land surveyor to do a re-establishment survey and a features and levels survey. This is a crucial step that needs to happen before your architect can begin working on your designs.
 
It’s important that you give the architect as much to work with as possible, including your design ideas and examples or inspirations you might have. You’ll also need to consider the character of the neighbourhood to ensure smooth sailing through the town planning process.
 
When your drawings and application are ready to go you need to submit it to the planning department at your local council for approval, and there’s always a wait involved. The wait time will vary from council to council, but they’ll eventually get back to you with a Request for Further Information (RFI). Ensure you respond to them with all the correct information quickly so you can keep the ball rolling.
 
Step #3. Construction Documentation
 
The third step in the real estate development process is to get onto your construction documentation. There’s a heap of paperwork you need to get done prior to your build. All of this is required by your chosen builder prior to beginning work on your project. We don’t have the time or space to go into heaps of detail here, but here’s a handy checklist that will get you heading in the right direction.
 
·       Working plan set
·       Engineering plan set
·       Energy plan set
·       Energy report
·       Civil plans set
·       Landscaping plan set
·       Soil test
·       Computations
·       Proposed plan of subdivision
·       Fixtures fittings and finishes specifications
 
 
Step #4. Construction
 
There are a few more steps in the process, and we’ll detail this in future blog articles, but eventually all your ducks will line up and your build will commence, and depending on the size of your properties and what type of build you’ve chosen you’ll soon have two or more brand new dwellings subdivided and ready to sell.
 
Step #5. Subdivision Approval
 
Once the builders are on site you need to get cracking on your Plan of Subdivision (POSD) application. Your land surveyor will give you a list of tasks to complete and relevant documents to get your subdivision approved. It’s imperative that you get this all done and completed prior to construction completion as you need all your properties on their own titles before you can settle any sales.
 
Step #6. Sell or Rent Your Properties

So, you’re at the end of the road. Construction is completed, you got subdivision approval and your new dwellings are all on their own titles. Now is time to put the properties on the market – either to sell or rent or a combination of both, the choice is yours!
 
At Little Fish we like to start the sales campaign at the beginning of construction, with the goal to sell the properties off the plan before construction is complete. We do this so we can settle them with the buyers as soon as the construction is complete meaning, we see our money straight away.
 
It’s not uncommon though for developers to wait until the properties are complete, furnish them and then run a standard sale campaign. Either way is fine, there is no right or wrong way – each has its pro’s and con’s so it’s really about what makes the most sense for you and your project.
 
If you’re looking to sink your teeth into your first development, then the real estate development step by step process we’ve laid out will definitely get you heading in the right direction. That said, if you have any questions don’t hesitate to reach out at any time.
 
Good luck and happy developing!

 

Author: Peter Kelly of Little Fish Property Developments

To put it mildly, Peter Kelly is enthusiastic about real estate. When he’s not looking at properties, or visiting potential sites, Peter can be found online at realestate. com. For him, it’s more than a job – it’s an obsession. Peter is a co-founder at Little Fish, where he currently heads up the projects side of the business.

Published on 23rd of April 2020 by Marty Stanowich
Marty Stanowich
Marty Stanowich

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