Subdividing a block

  • Building, 
  • Investment
  • Andrew Carroll

If you’re looking to tackle a subdivision to make a profit, the reality is that it’s harder than you think. Whether you’ve got a big block and want to subdivide, you’re keen to knock down your existing home and build a town house property, or maybe you have plans to create multi-level units, it’s important to do your research to be aware of the infrastructure cost that can easily blow out your budget.

A recent subdivision in Geelong

The cost of connecting your property to services including water, sewage, electricity and storm water drainage can vary depending on where your services are located and a number of other restrictions that may be apparent. These can easily become big ticket items that will cause heartache if you haven’t carefully accessed your site before commencing your project.

For example, if your site doesn’t have easy access to power, Powercor will need to install an underground power pit to your property which may then feed the group metering of the development to run power to the back property.

Storm water retention and plumbing is another variable cost dependent on your site.  For example, if the mains sewer is located in the neighbour’s property, you’ll need to negotiate with your neighbour to gain access to their land to connect to the supply. If you’re neighbour isn’t willing to cooperate then your sub-division will quickly come to a grinding halt.

Once all infrastructure pit falls are access a feasibility of the development should be done’. This investment in time will give you the best opportunity to maximise the desired profit you would desire for the outlay that is required. In my experience this is the step that most people forget to do because they are so excited about the development. In every investment you need to take the emotion out it.

Government changes are also issues to be aware of. Any development takes time and you must allow an amount in your feasibility for the what if’s. A recent change to Victorian legislation stipulates a new minimum garden area requirement when land is developed. Having the support from someone who is knowledgeable about the council planning permit fees and requirements will save you time and money.

For any novice, I recommend seeking professional help before taking on a sub-division. Working with a good surveyor and an experienced builder who regularly sub-divides properties will help you navigate through all the complexities from council town planning, civil works, through to the build. With meticulous planning a sub-division can be a rewarding project.

 

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