HVCO – Guide To Subdiving Land/Property

Home | HVCO – Guide To Subdiving Land/Property

Subdividing land or Property, or the process of splitting a single title into two or more smaller parcels can be a profitable for investors. To that end, we’ve brought you a guide featuring everything that real estate investors need to know about this process. In this piece, we’ll cover the benefits of subdividing land/property the steps you need to follow to make it happen, and tips for getting the best results.

The benefits of subdividing land

In truth, there are many benefits to using an investing strategy that involves subdivided land/property. With that in mind, we’ve laid them out below for your consideration. Read them over to get a better idea of whether property division may be a path you’d like to take.

Smaller Property/Land lots are often more marketable

First and foremost, smaller plots of property or land are often more marketable than big, lots. For one thing, they have lower price points, which will make them affordable for a larger percentage of buyers. Selling a large plot of land often involves marketing to a speciality buyer who wants to have a lot of acreage at their disposal. On the other hand, smaller, more average size lots are more likely to appeal to the masses, which increases your pool of interested buyers and your overall chances of getting an offer.

The potential for profit

Depending on market conditions, land/property division can be an efficient way to increase the value of a property. In some cases, two or more smaller lots may sell for more money than one big parcel. That said, if this is your goal, it may be a good idea to talk to a real estate agent before you start the subdivision process. He or she will be able to estimate the value of the subdivided land versus the value of keeping the lot as-is. Luxury Hub offers a valuation service as we have buyers who are seeking these plots once they have been developed. Luxury Hub also offers a Project Management service to develop these plots once split.

How to subdivide land/Property

Now that you know more about the benefits of separating land/property, it’s a good idea to take a look at the step-by-step process of how to make subdivision happen. Before we get started, however, it’s important to note that the specifics of this process are often decided on the council level. With that in mind, while this will serve as a general guide, it’s crucial to do your own research on any local planning laws or requirements that may be in place. Luxury Hub specialises in the planning requirements to develop & split plots of land/property.

Do your research

Whenever you’re dealing with land property development, there’s usually a strict legal process that needs to be followed. As stated above, these processes are usually regulated by the local council to that end, before you get started dividing up the land, you’re going to want to have a meeting with a local planning specialist and council to discuss the subdivision potential of your property/land. Luxury Hub has the specialist planning knowledge and carries this out on all land/property before purchase.

Typically, there are subdivision regulations that specify the allowable size of each plot or property, the type of street access required for each one, and requirements for necessary access to utilities like water and electricity. in addition, you may want to read over the property/land title deeds to find out if there are any restrictions on the number of times your particular land or property can be subdivided.

Carry Out A Property or Land Survey

After you’ve gathered all your information on the legal process of property/land subdivision in your area, on a particular site, the next step is to hire a licensed surveyor to do a land survey for Topography or a Property Surveyor for a full Site Scan. To start, the surveyor will take accurate measurements of your current land/property plot and the plots you want to contain within it, they will also flag the area to show the boundaries.

However, most importantly, the surveyor will work up a document known as a preliminary plan. A preliminary plan is a fancy name for a map that depicts details like land boundaries, access routes, flood zones, and any required easements. This will then be used by your architect for assessing what’s possible. 

Receive Planning Approval

Once your architect has finished their preliminary plan to your satisfaction, you will hand the submit to your local council for approval. Using an informal planning application called a Pre-App. The council may request or dictate changes that need to be made to the plan before approval is accepted or rejected by the council. Luxury Hub has the specialist planning knowledge and carries this out on all land/property before purchase.

Undergo the necessary engineering planning

After your preliminary plan has been approved, it’s time to start working with the architect on a detailed plan. This time, the architect will need to draw detailed plans for any construction work that you intend to do on the land or property including elevations, structural details, and surveys to ensure the plans meet the required planning guidelines given by the council. This could include anything from Transport surveys, Environmental surveys, Design and Access Statements, Biodiversity surveys and reports, Flood Consequences Assessment, Coal Mining Risk Assessment, Tree Survey, Pre-application Consultation Report, Drainage patterns or plans for adding utilities to the new plots.

Your architect will also have to draw up a set of plans to be approved by the planning department in the council.  Again, they may request changes to the plans before they give their subdivision consent and final approval. All told, the whole process can take from 9 months to 36 months to complete, so you want to be sure that you leave plenty of time to undergo this process.

Prepare and record the new deeds

However, after you receive final planning approval, the last step in this process is to bring all of the plans for the proposed subdivision to a property solcitor, who will help you through the process of dividing up the title for the new plots of property or land as well as the back-end aspects of dealing with an existing mortgage, if applicable, and undergoing the necessary appraisals for splitting the land..

Once all that is done, along with any necessary construction plans, you can work with your architect to submit a final title split plan to the land registry for approval. They will record the new deeds for the new plots of land/property, and once you have those in hand, you can go about selling your parcels.

Now that you have a better understanding of how the subdivision process works, odds are that you could use some advice on how to choose the right lots for subdivision. In light of that, we’ve brought you our best tips for tackling this process as a new investor. Read them over so that you have a better idea of how to get the most bang for your buck. Luxury Hub have plots of land and property with planning ready for development which we are splitting for investors and always have extra plots available. Land/Property can offer yields upto 15%.

Tips for subdividing land or Property as an investor

Look for houses with large lots

If you’re new to the process of subdivision, it can often be easiest to look for existing homes on large lots. It’s likely that these plots will already have the necessary infrastructure in place for subdivision in terms of utilities, which can lower your overall costs. Additionally, the value of the house will usually remain close to the same even if the house eventually sits on a smaller lot, which means that any additional lots that you create from the parcel will be a nice bonus to your income.

Consider buying adjacent parcels

If you have your heart set on buying a particular parcel, but it is small or oddly shaped and you don’t think it will divide easily into separate lots, you can always consider buying adjacent parcels. In this case, you can combine the parcels and create new lot lines however you see fit. Depending on the size, you may also be able to create more lots than you were originally intending, which will also add to your overall income.

Do your due diligence before buying

Lastly, if you’re investing in an unfamiliar area, you’re going to want to do your due diligence on subdivision ordinances before you put an offer in on a property. In this case, the last thing you’ll want to have happen is to invest your money into a property only to find out that you’re unable to subdivide. While this may create more work for you at the outset, it’s more than worth it.

The bottom line

When done right, subdividing land can be a profitable investment option. However, this process requires a lot of hard work and due diligence. If you’re thinking of undertaking subdivision as an investment strategy, you’ll want to make sure you have a firm knowledge base in the process before getting started. With that in mind, use this article as your guide for the process. Armed with this knowledge, you should be able to start thinking about whether subdivision could be the right investment strategy for you.

Letting with Luxury Hub

At Luxury Hub, we can help you find the perfect tenant, manage your property and achieve the highest rentals, with the best service, reasonable prices, and expert local knowledge. We’re up to date on all the latest legislation, too. See our other articles and downloads on our website.

If you have questions about managing a tenant or property, or need to find your next buy to let property, get in touch today. If we can’t help, let us point you in the right direction.