Subdividing or creating a strata development on your property are clever ways to make the most out of capital growth and rental income.
If property development is something you are keen to explore but you are unsure exactly what strata development and a subdivision entails, Summit Developments have outlined just what you need to know:
What is subdivision?
The subdivision of property allows you to add additional homes to a block that may previously have only held just one residence.
Changes in R-Codes can unlock the equity of land by allowing a greater density of housing via a strata subdivision.
Subdividing and building a strata home boosts the value of your block.
By building a brand new home and selling it, typically will bring you a greater profit than if you just subdivided and sold the land vacant.
Benefits of property subdivision
• Secure a profit by selling vacant land.
• Provide an opportunity to build dwellings for sale or as a rental investment. When renting the properties, you can generate a source of income, taxation benefits and capital gains.
• Provide the option to develop your land over time in stages. Many property owners do not realise staggering the development could benefit their financial position and give rise to development opportunities.
• Be your own property developer. Rezoning has provided options for land owners to become property developers, which is rare in many developed nations.
Things to Consider:
Speak to the experts.
When searching for a block to subdivide, ensure you speak to a professional builder. The team at Summit Developments will carry out an initial review and feasibility study.
The team understands the requirements of State and local planning codes and policies to determine the possible development yield.
We are experts at investigating if there may be factors which would influence the yield, for example, easements, road widening and setbacks.
Summit can also complete Return on Investment (ROI) assumptions based on different yield options to determine the optimum yield to maximise return, whilst mitigating risks and capital exposures.
Is your block suitable for a strata subdivision?
It is vital you understand what type of property development is possible when looking for land to subdivide.
Having clear knowledge of what is possible – whether that be subdividing your backyard or developing a vacant block – is vital.
Find out what local council zoning laws are to help determine what is possible for your development.
How can your land be subdivided?
A rear strata, triplex or duplex development, narrow lot townhouses, grouped housing or multi-units and apartments are just some of the options for your block.
However, the type of development is depended on local R-Codes. The team at Summit are experts at what type of development is permitted in each local government area.
Thank you to Summit Developments, Senior Development Architect Quentin Lau for your tips for this blog.