Noobie questions from investor wannabe

Hi Mashilu,

Looks like you’ll need to keep looking! If you consider subdividing a property again the following article off our website may be of help:

What is Subdividing?
Subdividing is when a piece of land is split into two or more pieces (ie separate lots). The process is controlled by the local Council. Planning codes and procedures vary significantly between Councils and also between States and Territories, as do the relevant fees and charges.

Factors to examine when considering a Subdivision
• Local town planning regulations

Land zoning restrictions
Minimum size of lots
Access to water and sewerage services
Setback requirements
Minimum building envelopes
Parks and open space
Easements
Vehicle access including Council refuse collection
Storm water management
Increased noise from new development
Environmental and heritage issues

Hidden Costs
A subdivision can take several months (and sometimes even years) to complete so you must factor in your holding costs such as:
• Interest
• Rates
• Land maintenance – (eg slashing and weed control)

Many astute Developers make the purchase contract for the land subject to the acceptance of a Development application approval with Council. This is usually done with an option agreement (see your Solicitor for more information)

Dividing the Land
Before you rush out and build a new dividing fence in your backyard, you should first consult your local Council for specific guidelines and costings, as it is imperative that the property is divided correctly. Any errors at this stage will cause major problems further down the track.

The Process
Most Councils require a Development/Planning Application to be lodged, together with details and drawings of your proposal. A Town Planner or Surveyor can assist you with this process, and they may also be able to give advice regarding conditions that the Council is likely to require.

Before lodgement of the Application, you can ask the Council for a “Pre lodgement” meeting to discuss your subdivision and determine what issues will need to be addressed in the Application.

When the Council receives your application, they may require you to erect a notice board for public viewing. The purpose of the board is to alert the public of the proposal by providing details of the subdivision. The Council may also write to the owners of the residents of the neighbouring properties advising of your intentions. We suggest that you contact the Council to find out what procedures your local Council uses.

Additional information the Council may require
Water and Sewerage
• Are existing services available?
• Can the existing infrastructure cope with increased use or need upgrading?
• Is permission required from neighbours to access property?

Storm Water
• How will storm water run off be managed?
• Is a drainage pit required?
• Are tanks required to regulate the flow of storm water?

Noise
• Will existing main road traffic noise affect the subdivision?
• If so, how will this be reduced? (Fences and/or earthworks)

Soil Conditions
• Do the soil conditions (eg.sand, clay) impact on road and footpath design?

Other issues
Footpath
Lighting
Signage

Issues for the Developer to consider
For the Developer there are also other issues to consider such as:

“Wasted” land due to unusual configurations
Steep slopes
Flood-prone land
Other planning overlays (ie restrictions)
Other factors that may reduce the number of lots and so profitability.

Approval of the Development Application
The approval process for your Application may take several months depending on the complexity and size of the subdivision.

You will then be issued with a conditional approval covering topics such as:

Developer to supply a plan of survey and mark land with survey pegs
Road reserve
Easements over stormwater, water and sewage mains
Requirement that storm water pipes be designed to cope with a “1 in 100 year” event.
Dust control
Hours of permitted work (usually Mon – Sat 6:30am to 6:30pm)
Headwork contributions to be paid by Developer
Open space (parks)
Social infrastructure
Road infrastructure
Water infrastructure
Sewerage infrastructure
Street scape contribution
Disposal of cleared vegetation
Entry walls or features
Connection fees to live sewer mains
Road (width, pavement depth, footpaths, kerb and channel, ramp profiles)
Street lighting
Fire Extinguisher (Battle axe blocks)
Underground electricity and phone
Erosion and silt management
Maintenance period of roads
Retaining walls
Fire ant inspections
Portable long service leave for Building and Construction Industry
If you are not satisfied with the Council’s decision, you may apply for a review.

Operational Works
Before work can begin, you will need to engage the services of a Civil Engineer to design and draw the sewer, water, road, footpaths and any other Council requirements.

This is a separate application usually referred to as “Operational Works” and attracts additional fees and charges.

Final Stage
All civil work will require Council and Engineering certification. When the subdivision has been completed to the satisfaction of the Council, you can then apply to register each separate title deed.

Conclusion
Land subdivision is a $mart way to fast track profits into your investment portfolio. However, as with all investment decisions, thorough research is necessary in order to balance the level of risk associated and ensure that the process runs as smoothly and quickly as possible, and that the best, most profitable outcome is achieved.

Happy house hunting,

AmandaBS
http://www.propertydivas.com.au
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