All Topics / General Property / Sub Dividing

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  • Profile photo of EznEzn
    Member
    @ezn
    Join Date: 2007
    Post Count: 17

    I am in the process of composing a business proposal for potential venture capitalist. The business will have two function. Buy and develop land in established estates and, buy land and sub divide then sell off the land. I was wondering if anyone could help me with a few things with the sub dividing. The land that I am looking at currently has vegitation on it and will have to be cleared, levelled, sub divided and roads put through it. Depending on the land phone lines, power and sewer will have to also be installed.

    I was wondering if there was any formula that I can use for calculating these costs dependant on area. Also are any of these services supplied by council for free.

    If you dont know would you be able to supply me with the number or names of people who may be able to help.

    Cheers

    Profile photo of byronentbyronent
    Participant
    @byronent
    Join Date: 2007
    Post Count: 9

    I use a surveyor that also is a development consultant. He surveys my blocks and quotes what all costs will be. Very cost effective and works for me.

    Profile photo of AmandaBSAmandaBS
    Participant
    @amandabs
    Join Date: 2005
    Post Count: 549

    Hi Ezn,

    Well it certainly sounds like your biting off quite a lot. Here’s an extract of an article about subdividing of our website that may 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.

    AmandaBS
    http://www.propertydivas.com.au
    FREE online Property Resources

    “It is better to be inconspicuously wealthy, than to be ostentatiously poor…”

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