Sub-Dividing Property in Perth and Wealth Creation: All you need to know
Are you looking to buy and invest in Perth real estate? Have you considered sub-dividing as a potentially lucrative strategy?
Sub-dividing land can be very rewarding for astute investors. It involves selecting a property that’s located on a parcel of land that can be split into multiple portions. Each portion can be rezoned and developed independently.
While this strategy can involve sub-dividing large commercial parcels of land for redevelopment, such as residential housing, it can also be done on a much smaller scale. An average suburban quarter-acre block could be sub-divided into two dwellings.
The key is to ensure the newly developed properties can be sold for a sum that’s greater than the costs of buying and redeveloping the land.
HELP LIMIT URBAN SPRAWL
For many years, most of Perth’s new housing stock has come from expanding into greenfield sites. This urban sprawl has substantial drawbacks. It means people are having to live much further away from the jobs and services they require. It also means that housing is constantly encroaching on valuable farming land.
To help reduce urban sprawl, a new plan has been adopted. By 2050, the goal is to reduce greenfield development from 70% of all new Perth housing, down to 53%.
If urban sprawl is to be limited, there will need to be greater density in existing suburbs. To help achieve this, the government has set “infill” targets for all Perth councils. While the targets are not mandated, they are aspirational goals.
So far, Claremont council is leading the way when it comes to greater density, having achieved 159% of its “infill” target.
This trend offers opportunities for those considering sub-dividing property as an investment strategy.
CONDUCT DUE DILIGENCE
Before buying any property, check with the local council so you fully understand the process for sub-dividing land. Policies will vary from council to council.
Make sure you check any zoning regulations, council rates, stamp duties, legal costs and likely processing times.
It would also be a good idea to check previous sub-divisions in the area. This will give you some indication as to what the council is likely to permit.
Be prepared that you may need to engage the services of a town planner or surveyor. This can cost anywhere from $40,000-$50,000 depending on the complexity of the project.
You should also undertake an environmental assessment, as well as check for underground pipes, as these could impact redevelopment costs. The sub-divided property will require new water, sewage, telephone, electricity and gas connections. These all need to be factored into your thinking.
While there are many factors to consider, consulting the experts and doing your homework thoroughly will ensure you go into the venture with your eyes open.
By selecting the right block in the right location, sub-dividing a property can be a very lucrative investment.
HOW CAN MINT REAL ESTATE HELP YOU?
At Mint, we’re here to help you achieve your investment goals.
Our extensive portfolio of real estate for sale in Perth ensures you can find the ideal property that meets your needs.
If it’s properties for sub-dividing you’re after, we have numerous listings that could be ideal.
We’d love to assist you with your investment strategy and to help you achieve success. Please give us a call on 08 9284 6000 or click here to contact us.