All Topics / Help Needed! / Newbie 1st small subdivision

Viewing 11 posts - 1 through 11 (of 11 total)
  • Profile photo of figuringitoutfiguringitout
    Member
    @figuringitout
    Join Date: 2012
    Post Count: 8

    Hi all,

    Any info would be appreciated.

    We are looking at buying a home on over 1000sqm and are playing with the thought of subdividing the land at the back and selling it to give us some extra cash. The block looks very suitable (access etc) and many blocks around us have 2 homes on them so im sure it shouldnt be too much trouble getting approval. It is is the Maroondah Council VIC.

    Ive noticed that most people are building a 2nd home and onselling, is there any reason (other than the potential for more cash) why we should consider doing this instead of just selling the land?

    If someone could give me an idea of what costs may be involved it would be great also.

    I obviously have alot of homework to do if I am going to proceed but need to start somewhere. Cheers

    Profile photo of peiranyupeiranyu
    Member
    @peiranyu
    Join Date: 2012
    Post Count: 15

    Morning there,

    If I were you,
    1. first, I will get a planning permit approved. This would you about half to one year to get it (maybe even more, depends on).
    2. You can decide if to sell the land with permit. Do an analysis about the market at that time, calculate the profit to see which option give u more profit. (sell land or continue to build the house)
    3. If you want to continue, depends on how big the house, normally i will put the estimate building cost at $1500/m2. (don't forget the selling cost and accounting coast/ tax cost)

    cheers

    PEIRANYU

    Profile photo of figuringitoutfiguringitout
    Member
    @figuringitout
    Join Date: 2012
    Post Count: 8

    Thanks Peiranyu,

    I dont really want to build it just seems that everyone does. I am only looking to make a bit of cash from the excercise which I why I was considering just subdividing the land and selling that.  Having a planning permit in place would probably make the land more desirable to purchasers so I may still look at doing it but at this stage I am only wanting info on subdividing the land.

    Has anyone done this?

    Profile photo of Change Of PlanChange Of Plan
    Participant
    @change-of-plan
    Join Date: 2010
    Post Count: 40

    Hi,

    Whether you want to build a house or not, you may still need to submit house plans with the council.  Given the size of your land you may just be able to split the block, but it depends on the council and the planning controls.  I would talk to the council about your idea and see whether you could just apply for a planning permit for subdivision, or whether you will need to apply for a development and subdivision.  You would then have some idea of the scope of the project.  A lot of the blocks in Melbourne aren't large enough to be subdivided without house plans being approved, which may be one reason people are doing the development.

    Good luck with your project,

    Profile photo of Stacey SurveyingStacey Surveying
    Participant
    @stacey-surveying
    Join Date: 2011
    Post Count: 138

    Hi Figuringitout,

    Subdivision is a relatively straight forward process, it’s a matter of following the steps involved. I’ve uploaded a subdivision flowchart to my web page (link in signature) which I think would be a good starting point for yourself as it is based on Maroondah and Yarra Ranges Councils.

    First you’ll need an assessment of the site which many professionals can help you with (eg. Town Planners, Surveyors etc.). This is where the feasibility of the subdivision is assessed before you start spending the dollars.

    From here there are several options of which stage in the subdivision you can go to. For example you can just get the planning permit and sell without subdividing (as the permit has value), you can split the block into the two titles and sell the new lot at the rear or alternatively go the whole way and build. Maroondah council heavily encourages at least a building envelope is designed to lodge with DA. Strictly it isn’t 100% necessary but will save you much hassle.

    Firstly in all subdivisions a Feature and Level Survey with Site Analysis (or Neighborhood Description) needs to be undertaken to show existing conditions and is what is used in permit applications. Whoever is designing anything in the backyard, such as the subdivision extents, building envelope or complete dwelling will use this survey to work off.

    Once you have DA the subdivision is designed and a Title Re-Establishment Survey is undertaken. A surveyor will lodge all necessary forms and liase with council until the point where you’ve got the two titles in your hands and ready to sell or develop.

    If you like feel free to send an email and I can give you some more information.

    Regards,

    Profile photo of figuringitoutfiguringitout
    Member
    @figuringitout
    Join Date: 2012
    Post Count: 8

    Thanks Guys,

    That is the exact kind of info I was after, there is so much to take in when you get started!
     
    Kids are driving me crazy at the moment but I will re-read this later and have a look at your link Ashley.

    Thanks again.

    Profile photo of KeyStrategiesKeyStrategies
    Member
    @keystrategies
    Join Date: 2011
    Post Count: 155

    Hi

    The guy to speak to about this is Troy – Rookie Developer – He knows Vic rules – I specialise in NSW.

    Having said that the process is pretty much the same everywhere – Know your market – Speak to Council and engage a Surveyor or Town Planner that knows the area.

    You will need to take into account slope, position of services, setbacks etc – All the above Info is good as a starting point.

    cheers

    Profile photo of fredo_4305fredo_4305
    Participant
    @fredo_4305
    Join Date: 2009
    Post Count: 336

    There is a current article in the latest smart property magazine going through subdivisions and cost comparision between just subdividing and subdividedevelop. Alot of it may come down to money or time as to why people choose to subdivide. I am subdividing in QLD at the moment and will assess whether I pursue developing once the subdivision is complete. It has allowed me more flexibility and gives me more time until the QLD market hopefully picks up.

    Profile photo of figuringitoutfiguringitout
    Member
    @figuringitout
    Join Date: 2012
    Post Count: 8

    Thanks Fredo, lll pick it up tommorrow.

    Ashley, had a look at the link, its great, I am looking in Croydon so I would like to chat with you further, i will send you an email.

    Profile photo of christianbchristianb
    Participant
    @christianb
    Join Date: 2009
    Post Count: 386

    Figuringitout,

    I like the tag!

    You already have a lot of good information so I won't burden the thread unnecessarily, but I will make a couple of points that may be of some use.

    • You will almost certainly need a full Town Planning Permit (TPP) application to subdivide the land, regardless of whether you intend to build or not.
    • 1,000 m2 or more (the old 1/4 acre block) may give you enough room to subdivide into three or more. This may be worth considering as it costs much the same to subdivide into three as it does two.
    • I do a lot of these proposals and the maths is tied to the risk. I'll expand on that further below.
    • The cost to land a TPP will be in the vicinity of $25,000.

    The risk/reward scenario (why build when you can just subdivide?)

    1. The first risk/reward hurdle is permits. Once you have the permit you have the ability to make a decision.
    2. The second hurdle is subdivision. It costs money to subdivide – provision of services and conforming with regulations.
    3. The third hurdle is building. This is taking on all the risk, and there is an expectation of commensurate profit.

    At each of these hurdle points you should – assuming your advice has been sound – be able to make a profit.

    Selling land with a TPP is the least risk, and often the least reward.

    Selling part of the land "with plans and permits", after subdividing, is a moderate risk (in my opinion) for the reward.

    The construction is where most of the risk appears to reside.

    A prudent approach is not just to calculate the potential profit, but also the potential risk. And when calculating that proential profit do so as a percentage, rather than a dollar amount.

    Good luck with your endeavours

    Profile photo of figuringitoutfiguringitout
    Member
    @figuringitout
    Join Date: 2012
    Post Count: 8

    Thanks Christianb,

    I have to say I spent alot of time on your website the other day and got heaps of information from it.

    I think once I have gone through the first stage I will be looking at building, being a 1st timer I am hesitant but I know its only fear of the unkown, I dont usually do things by halves so I shouldnt start now, right?

    Im sure if I study hard and get the best team I can I will not regret going for it.

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