Property Subdivision Strategy in Perth

Property Subdivision Strategy in Perth2020-07-22T14:20:41+08:00

Is property subdivision a good development strategy?

To be able to make the most out of a property development, its essential to understand the different property development strategies and how to use them together. This page will discuss the three main strategies you can use so you can understand how they work by themselves, and how you can use them together. Its really important to get an understanding of the three main value adding strategies you can use and how to use them together so you can maximise your profit returns on each project. The three main strategies we help our clients to use are:

Property Subdivision

This is the first of the three fundamental value adding strategies used in property development, alongside renovation, and building. Subdivision can be used as a stand alone development strategy, or used in conjunction with one or both of the other two value add strategies. Whilst renovation and building focus on the refurbishment and construction of dwellings, subdivision is the land development component and is the process of subdividing larger parcels of land into smaller ones, individually titling them, and then selling or building on them.

Renovation

This is the second value adding strategy you can employ, whereby you would renovate or refurbish an existing dwelling that you are keeping on a development site. “Renovate and subdivide” is a popular strategy combination for many novice and experienced developers alike, offering the ability effect a value add and project turnaround in under a year. Provided the renovations are kept mostly cosmetic the need for planning approvals can be avoided in most instances, and a strict budget can be adhered to without the need to engage a builder.

Building

The final of the three main value adding strategies in property development is building. This strategy entails the design and construction of new dwellings on the development site, next to or on top of one another (ie. apartments). You can produce a choice or even combination of single, grouped, multiple or special purpose dwellings. What you produce will be driven by appropriate, profit motivated research into planning constraints around the site, market demand, and your budget. Building can occur either before, after, or concurrently with the subdivision process, depending on planning and financial constraints.

Not every project will be able to employ all three strategies, however if you are carefully and appropriately able to employ at least two of them, you are adding more value will usually be able make a better return than just using one strategy. If you can’t afford to do two or three strategies at once, thats ok too. There is always the possibility of staging your developmentĀ to employ two or three strategies on the one site, simply doing one after the other.

At FLYNN Subdivision Experts, we show our customers the best way to combine these strategies to and how to maximise profits on every project by combining the right strategy combinations and sequencing. If you get the order of the value add right, you will facilitate an equity uplift at each stage. You can then use sales proceeds/and or an increase in borrowing capacity against the equity uplift to fund the next strategy stage for the site. Once you’ve done a few staged developments, you might even have the money to do the next one without staging anything! The trick to making money in property development therefore is all about learning effective use of these strategies, and getting the order and combination right. How to do this is what we can show you too!

Property Subdivision in Perth, Western Australia.

In Western Australia property subdivision is mostly administered at a state government level, by the West Australian Planning Commission (WAPC). It is not administered by the local councils, except in some instances with smaller built strata subdivision applications.The WAPC is the overarching decision maker, and has the power to overrule objections made by councils (also known as local governments). Councils are not delegated authority to make determinations on green tile or survey strata subdivision applications.

Employing subdivision as a standalone development strategy is a good entry point for most novice developers, from a project cost and risk perspective. To optimise returns however, subdivision should be employed in conjunction with renovation and/or building. Even if the strategies have to be employed in a staged fashion (ie. doing one after the other) for financial reasons, combining strategies should be considered so you are able to maximise the potential for value adding and to make the best return on investment for yourself on each project.

Learning more about which development and subdivision strategies to use

Many of our customers begun successful property development journeys through our education services. Education has empowered them with the knowledge they needed to pick the right strategies, and make profitable and informed development decisions. Many are well on their way to becoming expert property developers in their own right, with guidance from the professional FLYNN subdivision experts team. To learn everything you need to know about strategy in more detail, there are comprehensive chapters and online modules on development strategies, staging developments, subdivision, and building in our 225 page Infill Property Developer Guide-book and correlating Online Course.

Property Subdivision Resources

Our subdivision tools & resources are available to assist you with your research into the subdivision process, regulations, and the cost to subdivide land in Perth.

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