Part 1: Tips for landowners on the benefits and obstacles of subdividing their land
Landowners with large properties have the option for subdividing their lands. Subdividing is the process of dividing your land into smaller lots that are then sold off as individual lots to buyers. This means that the seller can make more money by selling only what they want. Moreover, smaller land sizes mean that prices will be affordable and thus, attract more buyers.
Landowners that are looking to sell land have to deal with the following before they put their land up for sale:
- Deciding on the size of the lots – While smaller lots mean more buyers, larger lots could lead to higher prices and thus, more profit. Selling larger lots is also more complex. Landowners have to consider the potential size of the land they want to sell, based on their own needs and priorities.
- Limitations – There might be numerous restrictions that prevent you from subdividing. Local laws, ordinances, neighborhood rules, and deed conditions could all prohibit subdividing. Landowners are advised to sit with their attorneys and then decide if they can challenge or work through these restrictions.
- Determining lot factors – Just because you have land to sell does not mean that there will be buyers. The size, shape, amenities, location etc. all play a role. Once all these are decided, look at the housing market in your area and see if you can sell lots at reasonable prices. Real estate agents and builders can help with this.
- Additional costs and requirements – Landowners will have to spend money on subdividing. Expenses could crop up from anywhere. Moreover, subdividing could mean that you have to comply with newer regulations. These could be to plant trees, build roads, sidewalks, gutters etc. Consider all of these before you go ahead with subdividing.
The key to successful subdividing is preparedness. Understanding everything about the process can help you divide land in a feasible manner that is beneficial. Learn more in the next part of this series.