When the land is subdivided into more than one lot, each lot is then sold to one or more buyers. This is more profitable than keeping the property as one residential unit. Smaller residential lots may be easier to sell than larger pieces of land. This increases the overall value of the land.
Other factors that complicate subdivision of property include whether the lot fronts an existing public road and whether you intend to build new roads, utilities and other infrastructure. Depending on the site design and layout, a subdivision project can easily escalate into a full-scale community development project. [4] X Research source
Find a title company. Your real estate agent or lender can recommend one with whom they usually work, or you can get recommendations from peers. The title company does the title search to make sure that the seller has the legal right to sell the property. [6] X Research source Once the title company verifies the validity of the title, they will release a title-opinion letter that states their findings. The title company will also issue title insurance. Title insurance protects the buyer should previous owners or debtors state they have a claim on the property. [7] X Research source During the title search, the title company scrutinizes old deeds to verify that the seller is the only owner of the property. The title search also uncovers any unpaid debts on the property, such as taxes, liens or loans. [8] X Research source
Consult a trusted real estate agent with local experience for advice on this matter. Get input from other builders who have worked in your area. Understand that the location of your property impacts its current value and how it might appreciate. Study the values of properties that are currently on the market in the area and others that have sold in the recent past. [10] X Research source For example, if you are planning to subdivide property to build residential homes, determine the home and lot size that will carry the highest value in your location. If most homes that sell in the area are smaller or are on smaller lots, don’t elect to build large, expensive houses on big lots. They won’t sell for nearly as much as they might in a more upscale neighborhood. An appraiser won’t be able to assign a value to a home that’s any higher than the highest home price in the location. So it’s wise to research the market and begin with an appropriate size and price in mind. [11] X Research source
Contact the the municipal planning and building department of the township or municipality to learn the property’s zoning category. If you cannot find the information there, research local laws on websites such as State and Local Government on the Net or the Municipal Code Corporation (Municode). [13] X Research source Zoning and local rules may affect the way the property can be used. The neighborhood might be classified for single-family residential, multi-family residential, transitional, or a mixed use such as residential plus commercial. [14] X Research source
This process is sometimes referred to as site development or technical due diligence. It is the process of evaluating the availability of and options for key utilities and infrastructure at the building lot like power, water, sewer and communications. [16] X Research source If you are buying a finished lot for sale, your agreement with the builder will cover these services. If you are buying a vacant or undeveloped lot outside of a neighborhood or established city limit, you will have to make plans for getting power, water, sewer and communications services to the property. [17] X Research source Electric and gas power can be brought to the property by the power company. Don’t rule out alternative or green sources of power: solar, natural gas, propane, heating oil or even geothermal. [18] X Research source Even if sewer and public water are available for a parcel of land, you may have to make arrangements to extend these services to the structures you plan to build. Consider alternatives like wells, and rainwater containment and filtration systems. Public sewer service is not always available. In these cases you may have to install a septic system. [19] X Research source Plan to wire appropriately for the types of communications systems you want to install, such as high-speed Internet, telephone and cable television. [20] X Research source Costs for site development can add up significantly. These costs include fees and permits and will vary depending on site and soil conditions, your development plans, and local fees and permitting costs. [21] X Research source The town or state may also charge you impact fees. These help communities pay for schools, infrastructure and other public costs associated with adding new homes to the community. Impact fees can conceivably be quite high. [22] X Research source
Hire a firm that employs civil engineers, land surveyors and environmental consultants with experience in your area. They will begin by studying the topography of the land and identifying critical resource areas that cannot be developed. They will use this information to draft approximate property lines. Then they will review local bylaws and present you with concept sketches that show you options for development of the site. Open-space subdivisions conserve open space with shorter roads and reduced lot frontage. Mixed-use developments include residential, business and recreational areas. Affordable housing developments not only help low-income people to purchase a home, but they can also turn sites with difficult constraints or little design potential into lucrative properties. Senior housing combines open space with accessible recreation and condominiums. It can be a way to attract new residents to an area without overburdening the schools. Once you choose the subdivision you want, the design firm will work with you to survey the land, delineate wetlands, design drainage and control erosion.
Once you have your subdivision plans all put together, go to the local planning board and schedule a pre-lodgement meeting. Bring your certificate of title and your subdivision plans. Show how big the property is, and identify areas for open spaces, existing and new houses, driveways and car parks. Urban planners on the council will review your proposal to make sure it meets local planning policies and guidelines. Don’t be surprised if they make recommendations for you to adjust or refine your plans. If necessary, meet with your team of architects, land surveyors and development planners to rework the plan to meet the council’s recommendations. Once you have met the above requirements, it is time to lodge your application. The township or municipality will accept your application and go through the process of approving it. This process can take anywhere from a few weeks to several months. Track your application by communicating with the council frequently to see if they have questions or need more information.
There is no way to accurately estimate how much it is going to cost to subdivide your property since so many factors impact the total cost. These include your location, property laws, zoning requirements, the size and shape of your property, whether or not there are any existing buildings on the property and the availability of access to utilities and infrastructure. [34] X Research source Land-subdivision costs may include a land survey, legal fees, application fees, clearing the site, supplying utilities, inspection fees and permit costs. [35] X Research source If you want to get an estimate for the cost of subdivision of a specific property, contact a land-developing firm in your area that has civil engineers, architects and land surveyors. They will have the knowledge and experience in your locale to be able to tell you what costs to anticipate.
You could pay as much as $10,000 on these fees, depending on your location and how many subdivisions you are requesting. For only two subdivisions, the cost will much lower.
