Three Critical Precautions for Purchasing Land for Subdivision
Land subdivision can help you maximise the overall potential of a piece of property. In simple terms, large tracts of land are difficult to sell because they are too expensive, and most people do not need an overly large lot. If you create smaller allotments, the price of each will be low, but the total earnings will exceed the maximum price for a whole large plot. In addition, small sections are affordable for most potential buyers. However, you should keep in mind that the benefits earned through dividing land will depend on the specific property. Here are essential precautions for choosing and purchasing a piece of land for subdivision development.
Consider the Property Zone
If you have basic knowledge on land development, you should already understand that there are zoning laws in place. In addition, there are different rules which apply to properties in specific zones. Therefore, when thinking of purchasing land, you should check out the relevant zone and its regulations. A profitable tract of land in one zone might not be as suitable or as beneficial if it is another zone.
This is particularly true in terms of size. For instance, there are restrictions on the minimum sizes of lots in different zones. Urban areas can have small lots, but residential zones outside towns will often be categorised as low-density properties. Therefore, if you choose a piece of land, you must ensure that it can be divided and be profitable according to the regulations of that zone.
Conduct Property Searches
You should conduct thorough property searches as early as possible to avoid wasting time on an unsuitable piece of land. A search will help you identify issues which could interfere with your plans for subdivision development. For instance, you should check on any potential problems, such as contamination. If the area has natural hazardous materials or was a former landfill, you will find out through searches. It is also important to learn if the area tends to flood during storms. In addition, check whether there are future government plans which could interfere with your development or its profitability.
Evaluate the Potential
Finally, it is essential to conduct an objective evaluation of the financial potential of your preferred piece of land. If the property will not yield significant profits after subdivision, you might needs to consider alternatives. You should check out the local real estate market and evaluate the average price of lots. In addition, consult a specialist surveyor to check the land and provide an estimation of the number of possible lots.