Articles
The Reasons For Subdividing A Property
by Vision Surveys Land Surveyor Companies & Consultants PerthSubdividing might be a big undertaking, involving a lot of paperwork, investment and time – once done, the house construction gains its endeavour. Regardless of the subdividing and construction process, subdivision project management turns into a prosperous venture on grounds of being undertaken by professionals.
What is meant by Subdividing Land?
When one block of land is subdivided into two or more blocks, then the process is subdivision. Residential or freehold subdivision is the common subdivision type that involves splitting one land lot into multiple lots. Either the land could be Torrens or a community titled block – depending on the land owner and land management.
On the other hand, you could own a house or have purchased a vacant plot – then you would have your eyes on a Torrens title. This title is much more common when shared or common areas like driveways and other facilities are lacking. Strata and community titles enter the process in subdivision project management when the shared common areas are present. Usually, these are seen with the units and townhouses.
Generally, five types of subdivisions are permitted in Australian states –
i. Freehold / Residential SubdivisionOne existing block divided into two or more separate titles is Freehold/residential subdivision.ii. Strata SubdivisionOne block divided into apartments or units is a strata subdivision.iii. Bare Land Strata SubdivisonOne block of land subdivided vertically where the blocs will be divided has not yet been built is the bare land strata subdivision.iv. Battle–Axe SubdivisionDividing a land block for being axe-shaped for the new home to be built at the property's back is a battle-axe subdivision.v. Development SubdivisionOne large land plot sliced for allowing for multiple titles is a development subdivision.
Hence, subdividing is basically when a block of land is sliced into two or more separate blocks having their title. Based on the situation, these five subdivision types will have to be considered.
When you are considering a residential subdivision, and the steps are completed with the land being split into two, then you would wonder what is to be done next. The options include keeping the lot vacant, constructing property on it or selling the vacant land.
Why Do the Property Investors Have to Subdivide?
Subdividing seems good when you have a backyard and have planned to put it to productive use. It might be developed into a massive block or multiple smaller blocks. There might be any reasoning – subdividing is guided by a few general ideas.
The chief reason to subdivide property is to regenerate profit. After subdividing, when a land plot is sold, then the profit margin rises by 10% more.
On the other hand, when the new block is to be retained, then equity can be increased based on how much the plot is worth on its own as against how much worth as one block. Even it takes into account whether a new house is to be built on the house on the new block or whether it should be kept vacant.
If you are deciding to keep it and then construct it, then rent out the newly constructed house as an investment property. It is sure to be a passive income increase when geared positively, or the taxable income decreases when geared negatively.
In the end, the property investors have their reasons for subdividing the property. The reasoning is depended on what is decided to be done with one block being subdivided along with the financial goals.
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About Vision Surveys 
Land Surveyor Companies & Consultants Perth
27 connections, 2 recommendations, 142 honor points.Joined APSense since, October 30th, 2017, From Scarborough, Australia.
Created on Dec 7th 2022 04:54. Viewed 164 times.
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