While subdividing is often a great way to multiply the market value of a plot of land, a subdividing project can be very complex and get landowners in over their heads if they're not careful
Making efforts while planning for a subdivision project to constrain complexity and minimize costs can drastically increase the profitability of the undertaking.
If you avoid the following three commonly made subdividing mistakes, you can maximize the return on the investment of your efforts to increase the value of your property:
Neglecting adequate market research
Before you subdivide a large plot of land, you need to make sure that there is market demand for the smaller plots of land that you're going to create.
You can get some expert opinions on the most marketable plot sizes in your area by consulting with real estate agents or builders. The more opinions you get, the more accurate your predictions on the marketability of your plots will be.
However, you need to be as detailed as possible regarding your lots and their available amenities to carefully explain the exact situation to experts you are consulting. Small factors like access roads, utility availability, and infrastructure factors can drastically reduce the desirability of a plot of land. Make sure you are factoring all the pertinent details into your market research.
Not being aware of new impacts and municipal requirements
If your plot was grandfathered to you or exempted somehow from newer regulations, you should be aware of the fact that it might loose these exemptions after you subdivide.
If you find that your plots are subject to new impacts, it could require you to make enormous additional investments in capacity fees, impact fees, or the construction of new sidewalks, curbs, or gutters. This will of course cut into the profits offered by the subdivision project.
Creating the need for a new roadway
If all the plots of land you are planning to create will front a public roadway, your subdividing job should be fairly straightforward.
However, each plot of land you create needs to face a public roadway to be accessible to the new owners. If your plot of land is large enough to require that you create plots that don't front a roadway, you will have a much more complex and costly job of developing marketable subdivisions. With this in mind, try to lay out your lots so that they all front a public roadway.
Before subdividing, contact a local surveyor, like Burget & Associates Inc, for help.