subdividing basics

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crashy
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@crashy
Join Date: 2003
Post Count: 736
June 2, 2007 - 12:41 am
I know ZERO about subdividing, and have wondered if it would be easier than my current hard slog known as renos.
how profitable is it?
how long does it take?
how much does it cost?
I know there are min land areas / frontage requirements depending on the council.
Is subdividing the next step after graduating from reno school?
Xenia
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@xenia
Join Date: 2002
Post Count: 1,231
June 2, 2007 - 1:10 am
crashy wrote:
I know ZERO about subdividing, and have wondered if it would be easier than my current hard slog known as renos. how profitable is it? how long does it take? how much does it cost? I know there are min land areas / frontage requirements depending on the council. Is subdividing the next step after graduating from reno school?
Takes around 3 months
Costs around $15000 (depending on where you are)
Profitablity depends on your own skills.
millions
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@millions
Join Date: 2005
Post Count: 355
June 2, 2007 - 9:42 am
It's a lot easier to do in a rising market. Helps if rents are rising. Hardly worth effort if there is heaps of land available in chosen area. If you purchase in an unpopular area you may have to wait for a boom to make an money on it. Consider tax paid on profits.
jc1979
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@jc1979
Join Date: 2007
Post Count: 8
June 7, 2007 - 1:25 pm
We purchased an investment property in the eastern suburbs of Melbourne….knocked it down and build 2 units. Bank valued the two properties together at $900k.We are now in the process of subdividing it. Cost so far is about $5k. Just getting the final papers done by the solicitor so unless he slaps us with a ridiculous bill then I think it will end up to be less than $10k.Banker rang me the other day and kinda suggested that they will now be valued at $500k each. But wouldn't give me a definate valuation yet. So yeh….definately worth doing if the land in the area is scarce.
YvetteF
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@yvettef
Join Date: 2007
Post Count: 2
June 7, 2007 - 1:57 pm
I admit I am a bit wet behind the ears when it comes to knowledge about properties and costings, but I have completed a subdivision on a residential block of land in South Coast of NSW.
So far my subdivision (which had existing council approval when purchased) has cost about 60K, I understand the approval can costs up to 30k and depending on the requirements (such as access road, sewer, electricity provisions) you might be up for a lot more than you think, not to mention the 15K council fees that my council require to be paid before going to lands and titles council.
Now that I have block on market I am finding that because it is a battleaxe block, some people are turned off it. Make sure you consider that when you estimate a final value.
Theres money to be made but just watch out for the cost that you dont get told about.
Alternatively get the subdivision approval and sell it off as a potential subdivision!
AmandaBS
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@amandabs
Join Date: 2005
Post Count: 549
June 8, 2007 - 1:09 am
Subdividing What is SubdividingSubdividing 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 castings, 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 requireWater 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 & 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 & Construction IndustryIf 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 StageAll 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. ConclusionLand 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.The above is an extract of a document off our website. From my experience triple the estimated time and double the costs!! 
jc1979
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@jc1979
Join Date: 2007
Post Count: 8
June 8, 2007 - 7:15 am
YvetteF wrote:
I admit I am a bit wet behind the ears when it comes to knowledge about properties and costings, but I have completed a subdivision on a residential block of land in South Coast of NSW.
So far my subdivision (which had existing council approval when purchased) has cost about 60K, I understand the approval can costs up to 30k and depending on the requirements (such as access road, sewer, electricity provisions) you might be up for a lot more than you think, not to mention the 15K council fees that my council require to be paid before going to lands and titles council.
Now that I have block on market I am finding that because it is a battleaxe block, some people are turned off it. Make sure you consider that when you estimate a final value.
Theres money to be made but just watch out for the cost that you dont get told about.
Alternatively get the subdivision approval and sell it off as a potential subdivision!
Yep we factored all those things in when we built the units. Seperate sewerage systems, water metres, cross overs, driveways etc. So all those were absorbed in the building cost.
The cost I described above only accounts for paperwork costs.
jtw
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@jtw
Join Date: 2005
Post Count: 57
June 12, 2007 - 8:14 am
Crashy, Each area has its own benifits and draw backs. As with reno's, subdivision is about creating a saleable product in the end. There is a process to follow and tricks of the trade you learn along the way like doing renos.
I am just finishing a small subdivision project in QLD and I must say that AmandaBS should be commended on that great post. The actual process can be very frustrating , but in the end very rewarding. I am not just refering to the monetary rewards but the satisfaction of finding something in the rough and polishing it to a saleable item that people fall over themselves to buy.
My personal experience has been to become very familiar with my local area , the local authority and the planning process. Over the last 2 years I have developed great contacts in council and professional services that will greatly reduce the 'friction' and delays in any future process. Because each council has it's own town plan and regulations, i intend sticking to the same area to capitalise on the knowledge and contacts I have made. How much will I make from my project, in excess of $500K.
Will I do it again? if I find another gem in the rough, you bet I will. Is it hardslog ? not like renos (which I don't do anymore) it is more frustrating and requires confidence. Is it a step up from renos? No, it is just a different product that you are getting ready for a purchaser. It will come down to personal preferences, but also you own abilities and character.
JTW
CaptainMark
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@captainmark
Join Date: 2003
Post Count: 10
July 4, 2007 - 3:05 am
Hi guys,I'm trying to soak up as much information as I can, and have a couple of subdivision questions if I may:1.Lets say you get a bare block of land in a regular suburban neighbourhood, or a small town. If you were to purchase it for say $100k (hypothetical) then subdivide it into equal lots, is there a rule of thumb for what the two new plots would sell for unimproved? This is more out of curiosity that anything else I guess. I realise it's perhaps too basic a question, but any input would be great.2.Is this strategy of subdividing going to require more funds to start than a regular renovation strategy? Or perhaps more accurately, "how much more" than a regular reno? I must admit my interest is much more towards subdividing and developing, rather than renovation – but I guess I'll start with what I can afford if it comes to that. For those who have done subdivisions (especially in Brisbane) is there a normal amount of capital you'd feel that you MUST start with to do a subdivision? Again, perhaps too basic a question.Any input on the above would be brilliant. I'm really just trying to get a feel for what my current financial position will allow.Thanks guys,Mark
corhig
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@corhig
Join Date: 2007
Post Count: 37
August 19, 2007 - 7:11 am
jc1979 wrote:
We purchased an investment property in the eastern suburbs of Melbourne….knocked it down and build 2 units. Bank valued the two properties together at $900k.
We are now in the process of subdividing it. Cost so far is about $5k. Just getting the final papers done by the solicitor so unless he slaps us with a ridiculous bill then I think it will end up to be less than $10k.
Banker rang me the other day and kinda suggested that they will now be valued at $500k each. But wouldn't give me a definate valuation yet.
So yeh….definately worth doing if the land in the area is scarce.
Question for jc1979 – So you built another property on your block BEFORE you applied for permits ??!! Isn't that a little risky just in case you don't get the approval, or did you know what you were doing beforehand? I thought the council might make it a lot harder cos you'd already built, also you wouldn't exactly know their requirements, and might have to change things. I don't know much about sub-divisions, but am researching alot before I attempt anything. Just thought the 'normal' process was to have the block divided and approved before the build.
Tupuraki
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@tupuraki
Join Date: 2006
Post Count: 3
August 20, 2007 - 1:48 pm
Hi,
we just purchased our 1st house in Ipswich qld, on a subdividable block…. we were wanting to subdivide and put a removable house at the back of the block….. Has anyone had any experience with removable houses?????
also, i have friends who buys of the plan properties, they seem to be doing really well…. just wondering…. with all the time and effort that is taken into subdividing, renovating and building…. is the time and money better spent in just buying new properties???? And waiting for them to grow in capital gain???? with this subdivision we are looking at making around $100,000 but this will take around a year and the time and the effort is massive compared to just buying a buy new property??? Any advice on this one????

Phyllis
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@phyllis
Join Date: 2010
Post Count: 2
January 31, 2010 - 12:12 am
What is the difference in sub division and strata title, also what is the difference in both of the costs?
Phyllis
Phyllis
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@phyllis
Join Date: 2010
Post Count: 2
January 31, 2010 - 12:15 am
Where do you find out block sizes in comparison to house sizes, alsohow big a block needs to be to put a building on, i.e. if you had a 1000m2 block how man units could be put on it
Phyllis
Matt007
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@matt007
Join Date: 2008
Post Count: 259
January 31, 2010 - 12:40 am
So many variables involved…. are you doin flat land subdivisions, or subdividing an existing house block, doing it to buy and hold, buy and onsell, buy and build… costs will depend on the approach you're taking.
Doing flat land subdivisions can take longer, and cost more, eg: if you're doing a 10Ha block and subdividing into 3000m/2 lots, and then are you actually doing all the civil works like roads, gutters, sewer etc in which case you're up for infrastructure conbributions which in Qld anyway are about 5 times more expensive than any other state (and the biggest barrier to affordable housing in the state).
Doing a 'splitter' is a bit easier, and generally would cost between 10-20K depending on a multitude of things.. lot size, intended use, position of existing property and so on.. could take 4 months, could take 8 depending on Council and the plan they're working to.
You can do it under option or development agreement for larger lots of land, or a simple buy and hold with a splitter, or any way that you and the vendor can agree on really..as long as everyone is realistic about what they can take out of it.. as someone above said, contingency planning is key, if it can possibly go wrong then it probably will so plan for delays and costs..
Start by talking to council before you even buy the thing.. see whether they'll even look at it.. see what they want, work WITH them rather than drop something on them witih little or no consultation..
How do you find blocks? Hard work. Splitters you'd need nothing less than about 1000m/2 preferably more, small lot housing maybe less depending on the plan. Agents, research, RPData, newspapers, driving around, hard work.
Learn to read the town plan. They're all public documents on the various council websites that will tell you what you can and can not do on a block.
If it was easy everyone would be doing it
christianb
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@christianb
Join Date: 2009
Post Count: 386
February 2, 2010 - 6:53 am
Phyllis wrote:
Where do you find out block sizes in comparison to house sizes, alsohow big a block needs to be to put a building on, i.e. if you had a 1000m2 block how man units could be put on it
Phyllis
It varies from state to state, and from council to council. Strange but true!
It also depends on proximity to the nearest city centre, transport and community facilities.
In some cases the size of the allotment will also affect the density permissible.
Perhaps if you can give some details of the "what and where" there may be some handy hints on the "how".
thecrest
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@thecrest
Join Date: 2004
Post Count: 992
February 7, 2010 - 4:30 am
Thanks Amanda, nice post, suggests to me that I stick to what I know and use experts for subdivision unless I want a steep learning curve and can afford mistakes.
cheers
thecrest
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Mystery
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@mystery
Join Date: 2006
Post Count: 87
February 7, 2010 - 9:55 pm
Tupuraki wrote:
Hi,
we just purchased our 1st house in Ipswich qld, on a subdividable block…. we were wanting to subdivide and put a removable house at the back of the block….. Has anyone had any experience with removable houses?????
also, i have friends who buys of the plan properties, they seem to be doing really well…. just wondering…. with all the time and effort that is taken into subdividing, renovating and building…. is the time and money better spent in just buying new properties???? And waiting for them to grow in capital gain???? with this subdivision we are looking at making around $100,000 but this will take around a year and the time and the effort is massive compared to just buying a buy new property??? Any advice on this one????
Have you spoken to Ipswich council about the possible sub-division yet? We have recently received DA approval for a dual occupancy development. It may not be the same in your suburb, but where ours is in Redbank Plains they require 800m2 min for dual occupancy, 900m2 for sub-division and 1200m2 for sub-division on a corner block.
Don't forget to allow for the council contribution cost in your calculations … ours is $14,000 to go towards concrete paths in the shire. This is on top of all the other costs associated with the development application process.

Good returns can be made with the right structure for your block and affordability, … research all aspects to maximise the capital gain/rent return. We have just gone through the exercise of doing a numbers breakdown as to the best option for us ….
a) knock down existing house and build a 2 storey duplex
OR ….
b) reno the existing house and build a detached 4,2,2 new house.
Although both options would make money we found that plan b, offers the best return for us. With plan a, we found that by knocking down the existing house it makes it an expensive block of land.
Good luck ….. keep us updated
Martin
mittagundi1
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@mittagundi1
Join Date: 2010
Post Count: 1
February 10, 2010 - 8:37 am
I’ve done several subdivisions – one to completion (ie with services attached) and one to a selling with “plans and permits”. Check first on the zoning in the area i.e. residential one or green wedge – this will dictate what you can and can’t do and then check out “overlays” which seem to really impact on costs for example our current property means a minimum average block size of 2000sqm and a minimum council contribution of 10k per block (five blocks). Will we make good money? yes but the time frame has been almost three years just for permits. We will sell an existing home (fully renovated) and four blocks of land. We would make more if we constructed on the new blocks but holding costs and cashflow mean we will sell some of the land first at least.
The simplest subdivision we have done has been a single 650sqm lot with a renovation of an existing house on the front of the block and a new small two bdrm unit on the back – we designed the two bdrm unit so we can rent it out as two single dwellings and so this is cash flow positive. After the renovation of the front property we sold this for the same amount as we had bought the whole site for originally meaning with sub division costs and renovation cost the back block cost us a little over 40k
Subdivision is definately a good option but make sure you can afford the drains on your cashflow as you do each project.
Lesleyo
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@lesleyo
Join Date: 2010
Post Count: 1
February 11, 2010 - 11:27 am
I noticed someone up above has done a subdivision at Redbank Plains. My husband and I are considering the same only this is our own property we are subdividing. Would love to be able to talk to some who has done this in this area over the phone or face to face to ask heaps of questions from someone who has done it. If can't do that. Roughly how much does it cost from start to finish … as in being in a position to sell off the subdivided block and to sell it do you have to have the electricity etc. connected. Thanks for any help.
therock1
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@therock1
Join Date: 2006
Post Count: 21
February 14, 2010 - 9:39 am
CGT for Subdivsion.
What CGT will i be up for if i subdivide my block and sell off the block off the land? (QLD)