Hello forum members,
I am new to property investing. I have found a large block with a t/f house on one side. My initial research shows that I should be able to divide the block into at least two. I would then plan to sell the vacant block and keep the block with the house and rent out. Does anyone know if this land division can be done during settlement?
I would be grateful for any advice / help from anyone that has done this before. Many thanks
Markus
Speak to the council town planning officer to see if the council allows you to subdivide the land and what conditions, if any, they would place on this.
Speak witha surveyor. You will need one to produce a new plan of subdivision and lodge it with council. he should give you an idea of how long the process should take.
You can definatley begin the process during the settlement period, but it is likley to take a few months.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.PropertyUpdate.com.auThere’s quite a few developers through the forum .
You could track one of them down and ask .
Cheers
MkcThanks Michael for the advice. Great to read your posts as you are a seasoned developer.
Will give council a call, find a surveyor specializing in the area and take it from there. I will definately allow for possible delays in my scenario / sensitivity analysis.
Mck – Thanks also. Will search them out in the development forum and ask. Also have a few developers as clients ( I do foundations ) so I will ask a few of them also.
Regards
Markus
Markus,
Exciting stuff! Just a thought – you could probably actually include this stuff as terms in your offer to purchase – ie. 6mth settlement, purchase dependent upon subdivision approval from council??? Clearly with these terms you will perhaps need to be generous on price, but if the numbers work out it would give you some kind of protection, and hold the property for you while you go through the process of seeking council approval.
Now a disclaimer – I haven’t done this myself, so perhaps some of the experienced people on the forum can confirm or deny what I’ve just suggested???
Good luck!
Adam
Don’t let life get in the way of living.
Thanks for the advice Adam, will take it on board. I understand the need to offer a good price whith such conditional terms. When doing my analysis on the deal I will account for that. The profit margin should still be more than satisfactory otherwise I will move on to the next one!
Just read a property book and in it, a developer mentioned taking out an option. I assume the strategy behind it is offer a small option fee to take property of market . Conduct due dillegence including subdivision approval and exercise option if satisfactory. If not, walk away and lose the option fee.
To those that have done this before, is my summary right and would an average option fee be a few % of the purchase price?
Anyone used this strategy on a simple two block subdivision or is the option strategy more common on the bigger deals?
When appying for subdivision approval during settlement, I assume you would need vendor to sign application. Is this correct?
I would appreciate any thoughts / advice.
Regards
Markus[biggrin]
Hi Markus
You can use a Call Option for a small subdivision which you might look to flip or a large residential block which you might develop.
Just bear in mind in some States you still pay stamp duty on the Call Option but at least you can make the Option subject to you obtaining a DA on terms satisfactory to yourself.
I picked up one during the week here in Brissie which has a house on the block and i intend to cut off the side and construct a small lot on the spare block.
The conditions include that the Vendor must sign all applications in relation to the subdivision and also allow the erection of advertising signs or anything else as required by the local Council.
Richard Taylor
Residential & Commercial Finance Broker
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
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