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Let's Talk Land - Part two

Updated: Jan 19

Subdividing your Land

Land is classified as a long-term asset, so if you’re fortunate enough to have a house on a large section, one way to capitalize is to subdivide. The key question when looking to subdivide is ‘What do you want out of it?’

It's crucial to do the numbers and be clear about what you’re trying to achieve financially. Whether you’re looking to sell off the land, or build and sell the completed build, understanding the costs, gains and risks are all vital.

First things first, you need to assess the feasibility. Can your site be easily and conveniently subdivided? Aspects that determine your lands feasibility to subdivide:

Size: too small and you’ll not be able to subdivide

Susceptibility to flooding, subsidence, slips, erosion, etc

Drainage – note, the provision of new stormwater or wastewater draining can be expensive

Access for vehicles and parking

Building zone: in Auckland, for example, if you live in a Single House Zone, each plot created by a subdivision must be a minimum of 600m². Whereas in a higher density Mixed Housing Urban Zone, each site must be a minimum of 300m². Checking local Council requirements for zoning rules and regulations is a must.

Costs Involved:

Planning Company

Geotech Report

Topographical Report

Survey costs

Legal fees

The subdivision process can be lengthy and costly, so make sure you do your homework. Subdividing typically costs between $150,000 - $200,000, this covers consent costs, development contribution fees, service connections, access and fees for planners, lawyers, surveyors and engineers. A licensed surveyor will guide you through the overall process and costs.

Building on your Subdivided Land

People generally look to subdivide to grow their wealth. Whether you’re building to live or building to sell, the key is not to over capitalize.

To avoid over capitalizing, you must be clear about its purpose. Do you intend to live in the home or are you building to sell? When you’re building to sell, it’s important to understand all the costs and what buyers would value in a property in your area. The spend for subdividing, funding, earthworks and build must match or be less than the end value of the completed home. Remember, don’t get overly invested in design and finishing if the home is an investment. Be practical and functional.

Over capitalizing when you intend on living there for 5 - 10 years is pretty hard to do, as you not looking for an immediate return on your investment.

If you plan to build to live within your subdivision, you might consider creating some covenants around the size and appearance of the neighbouring builds. Most modern subdivisions now include land covenants which are registered against the titles. These are effectively rules that the landowner must abide by when owning the land. This helps preserve what is important to you, as you’ll be living next door.

On-site meeting and inspection

We offer a free, no obligation site assessment, where we can meet you on-site and discuss the unique constraints of your site and how we can work with the land to get the best outcome. We get to understand what you’re hoping to achieve in your home and the sort of budget you have in mind. We’ll assess how suitable the land will be to achieve your desired outcome, and we will give you advice on what the possibilities are.



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