OK.. small amount of background info.. my mother has a mid sized home she purchased 25 years ago, which she now owes roughly as much as she did the day she purchased it (refinaced several times). Due to contuned increases in cost of living and other factors, she really cant afford to continue living there so is planning on selling soon..
My question/ideas.. I've seen a lot of people in my area/surrounding areas subdivide their lots and build multiple houses then sell them for a profit. My mothers house is built on a huge a block that could easily fit many small/mid sized places on it. Now I know she cant finance this expensive redevelopment herself but is the land (being quite sizeable) worth anything to someone else who would want to do something along the same lines ? Could my mother make more money by selling the 'land' instead of the 'house' per say.. (if it works that way ?)
Knowing very little about how these things work I'm basically looking for any advice on the best path she should follow.. Can she do anything 'better' than just putting the house on the market and selling it to the highest bidder ?
Regards,
Best thing to do is go into the local council and check that the block can be subdivided. The have a chat to the local agents regarding land pricing. You maybe able to subdivide the back off and sell it… then use those funds to pay off the current debt of you mums house… so she can stay there
Holly
RenoTeam wrote:You maybe able to subdivide the back off and sell it…She cant really afford to subdivide in the first place before offering it to a potential buyer ?
khorask,
It sounds like a good plan which may work for you. As reno team suggested pop in to the council and give a town planner surveyor a call to get their initial thoughts.For there to be a potential buyer developer the figures would have to stack up for that person before them to make any money out of it. You may find someone could take an option out on the property. They would basically be able to do the subdivision on behalf of your mother using their money, then on completion of the subdivision the transfer of money for the land would take place and in theory both parties walk away happy.
One thing to note is subdivisions are not a fast process and can sometimes take over a year to go through council.
What area is the property in?
Is there any way you or other members of the family can raise the costs for the subdivision?
Get an idea of the costs involved by talking to a land surveyor and the council.John
Pending the area subdivisions can either cost an arm and a leg or they can be surprising and be relatively cheap compared to what you are getting.
Have you spoken to your local council? Before you decide anything, go in to the planning department, let them know your dilemma and ask them what your options are. I've never found local councils to be unhelpful (seriously!).
Good luck!
I'll preface what I'm about to say with the following:
The profitability of any proposed subdivision rests with the value of the land, and the value of the land is most often a reflection of the location of the land.
That said, it may be possible to excise the house and a small amount of land from the rest of the property and sell the land onto someone else to with as they wish. This will require a DA/TPP and a proposed plan of subdivision at the least.
There are no doubt many different sorts of deals that could be set up around this proposal, but in the end it is perhaps best done by the land owner (or their agent) at the land owner's expense.
If time is not the most pressing issue, then an indicative plan of subdivision could be prepared – at a cost of hundreds rather than thousands of dollars – and this indicative plan could then be used to seek appraisals and opinions on the value prior to heading down the path proposed.
if there is room for a driveway at the side of the property there maybe an option to sell off the backyard, which may make staying in the property affordable or even may off the remaining loan.
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