Making profit through property development can be quick and easy – or not! While any property development project has its risks, by doing your homework and getting the right professional advice, subdividing an investment property can be both fun and profitable.
Before you purchase a property for profit, talk to the team at Stratawise – we’re here to help with all the information you need to help you make the right decision.
We’ve pulled together some helpful advice and tips on how to find a property with the best potential for subdivision, and what you should know before you sign on the dotted line!
Where to look.
It’s all about location, right? Well – yes…and no!
If you’re checking real estate guides, you’ll see some suburbs and locations demand higher prices because they’re considered the ‘best’ locations. But remember, you’re buying, not selling, so why buy at the higher prices? You don’t make any money on a property until you sell it. Look for areas on the ‘fringes’ of the more popular suburbs, the up-and-coming ones that will be ‘hot’ later when you’re looking to sell. It’s more important to choose a site that is near schools, transport, parks and shops – if you can find all this in a cheaper suburb, then the only way is up!
Do your homework.
Go for a drive. Check the real estate listings. Find out what properties in the areas you are interested in are selling for. Know how much you have to spend, and how much of that can go towards the property itself, and how much you will need for stamp duty and bank fees, any demolition costs and council fees, along with the design, build and project management costs of your project. A property financial specialist can help with this.
Empty site or already developed?
An empty site gives you a clean slate on which to start, but you’ll be paying for the fact someone else has paid for the demolition. If there is an existing property on it, you’ll need to consider whether you keep it and subdivide to a battleaxe block, for instance, or demolish. If you’re willing to demolish, check the home first for asbestos – you’ll need a specialist demolition company with approval to remove and dispose of any asbestos. Find out more here.
Who are you developing for?
Well, you, obviously – you’re the one who will benefit financially. But you won’t be the one living there, so think about who your target is. Professionals? Families? Downsizers? Understanding who your potential buyers are will guide the design of your development. For instance, a family may want a larger site with more outdoor area than, say, a young professional. This is where lot size, density and zoning come in. What does this mean?
Get familiar with local planning policy.
Before you purchase a property to develop, talk to the planners at your local council or shire. They are the ones who will be approving your development application, so it will need to comply with their planning policies and regulations. These consider such things as:
Most councils have their Town Planning policies available for viewing online. Our subdivision team has plenty of experience working with councils and obtaining planning approvals, so a good place to start is right here.
But wait, there’s more….
Flat, symmetrical land is generally easier and cheaper to subdivide than sloping or hilly or unusually shaped sites, as well as being easier and cheaper to design for and build on. For instance, siteworks and retaining walls will add a considerable cost to your investment.
Last but not least, a corner block will add to your return, as a subdivision could provide for two properties each with its own street frontage, address and access, and people will generally pay more for this. Find out first about kerbing and crossovers, however – there could be costs here from the council that might negate any extra investment.
Finally – talk to the experts.
Get the full rundown on profiting from property from the Stratawise experts. Experience is everything when you’re investing in a property to subdivide and develop, so you want to maximise the potential, and we want to help you! Subdivision is what we do best – see what we do here…