Methods for Dividing Real Estate

Subdividing residential property is an option that homeowners and real estate investors consider when looking to maximize their returns. The method of accomplishing this is not standardized. Different jurisdictions have different rules and regulations. For location-specific information, it is preferable to get in touch with the local planning and development office. This post will provide you with some basic tips and guidelines.

Preliminary Considerations When Deciding to Subdivide Your Land

Get familiar with the concept of property subdivision. Subdividing land literally means cutting it up into smaller pieces. In most cases, landowners will partition their property to create several separate dwellings. In most cases, this will result in a rise in the land's market price.

After the land has been partitioned into multiple lots, the lots can be sold separately. This is a better financial move than maintaining the building as a single dwelling.

It could be easier to sell smaller residential lots than it would be to sell larger plots of property. The land's worth has increased as a result of this.

Think about what you stand to lose if you subdivide your land. Professionals in the real estate, construction, and development industries frequently subdivide properties. Due diligence is essential if you are new to the procedure, but it may be dangerous if you aren't careful. Determine whether or not your property qualifies for subdivision by evaluating a range of potential factors. Subdivision plans and applications can be costly endeavors if your land isn't suitable for one to begin with.

Think about how far-reaching your objectives are. Subdividing larger properties presents an even greater set of challenges. Subdividing a smaller piece of land (one that is less than an acre in size) into just two plots is easier. Complexity increases with project size. The process becomes significantly more involved once you begin thinking about subdividing properties larger than an acre into three or more parcels.

Subdividing land might be tricky if there are already public roads in the area, if you plan to develop additional roads, utilities, or other infrastructure, or if the lot is located on an existing public road. It is possible for a subdivision project to grow into a major community development effort, depending on the site's design and layout.

Initiating a Search

Inquire about potential limits. Verify that your proposed development won't be prohibited by any bylaws, covenants, or deed restrictions in the area. Any of these issues, as well as the presence of any liens or other claims on the land, might be discovered through a title search.

or lender for a referral, or you can ask around at your local real estate community to see if anyone has any recommendations. The title company will check the seller's legal right to sell the property.

After the title company has confirmed the legitimacy of the title, they will issue a title opinion letter detailing their findings.

Title insurance will also be provided by the title business. When a buyer purchases title insurance, they are safeguarded against claims made by former owners or creditors.

In order to ensure that the seller is the sole owner of the property, the title company conducts a thorough examination of all previous deeds. Unpaid taxes, liens, or loans are also revealed by the title search.

Try to predict how the economy will affect your newly divided property. Check to see if there is a demand for lots in your region. Put a reasonable price tag on them. Determine a lot size, layout, and price that will be competitive with similar properties in the neighborhood through market research.

For help with this, talk to a reliable real estate agent who is familiar with the area. It's a good idea to consult with local builders who have experience in the area.

Keep in mind that your property's current worth and future potential are both affected by its location. Look at the asking and selling prices of comparable properties in the neighborhood.

If you want to build houses on your land and subdivide it, you should research what size house and lot will bring the most money in your area. Building enormous, expensive houses on large lots would be a waste of money if the majority of homes sold in the area were smaller or were on smaller lots. They won't fetch as high a price as they would in a more desirable area. No appraisal is going to come in higher than the market value of comparable homes in the area. Therefore, it's prudent to examine the marketplace and set off with a reasonable target size and pricing.

Realize what kinds of permits or other regulations are needed. However, municipal zoning, subdivision, and property-development rules may still have an impact on your plans, even if there are no ordinances, covenants, or other limitations preventing you from subdividing the land. There are different stipulations for open space, minimum lot sizes, and building heights in each city and county. Before putting money into preparations to subdivide the property, it is important to investigate these laws. Zoning deviations can be sought and, if justified, granted.

To find out what type of zoning applies to a piece of land, inquire with the local planning and building authority. State and Municipal Government on the Net and the Municipal Code Corporation are good places to start looking for state and local legislation if you can't locate what you're looking for there (Municode).

The permitted uses of the site are subject to zoning and other municipal regulations. Single-family residential, multi-family residential, transitional, or mixed usetions. Single-family residential, multi-family residential, transitional, or mixed use (such as residential and commercial) are all possible designations for the area.

Verify that all of your parcels will receive the necessary maintenance. Not having public road access and services like water, sewer, and electricity will make the properties unsellable. Verify that these services are available on your lots and that they have the ability to support the additional homes you intend to construct there.

The terms "site development" or "technical due diligence" might be used to describe this procedure. Critical utilities and infrastructure, such as electricity, water, sewage, and communications, must be assessed in order to determine the viability of a building project.

If you're purchasing a lot that's already been built, the builder's contract should cover these extras. Buying a vacant or undeveloped lot outside of an established neighborhood or municipal limit means you'll have to figure out how to connect utilities like water, sewer, and phone lines to the site.

The utility company can wire the home for electricity and install gas lines if desired. Solar, natural gas, propane, heating oil, and geothermal energy are just some of the green and alternative options you should consider.

It is possible that you will need to make arrangements to extend sewer and public water services to the structures you intend to build, even if they are already available on the parcel of land. Wells and rainwater catchment and filtering systems are two viable alternatives to conventional water supplies. In some areas, you may not have access to public sewers. You might need to install a septic system if this occurs.

The installation of any number of different telephone, Internet, or cable TV systems will necessitate careful planning and proper wiring.

The expenditures associated with a site's development can quickly mount up. Fees and permissions are included, and their total amount will change based on factors like the current state of the land, your plans for development, and the cost of obtaining the necessary licenses and permits in your area.

Additional impact fees could be levied by the municipality or state. These aid municipalities in covering the costs of new housing developments, such as public services and infrastructure. It is possible that impact fees could be rather substantial.

Subdivision Application Submission

Check the title's availability. Title companies are the ones who conduct the actual title search. There may be outstanding taxes or liens on the property that can only be discovered by doing a public records search. A title search was probably performed before settlement if you already owned the property. However, a title check should be done before settlement if you plan to subdivide the land after purchasing it.

The method should be checked out on the ground. Get in touch with your local planning, zoning, or development authority. A lot of useful data about your town or city might be available online. Otherwise, give them a call. Inquire about the possibility of subdividing your land. You should research any regulations or laws with which you must comply.

Plan the subdivision's layout. To get the land planned out, you should hire a developer or a civil engineer. The number and size of subdivisions, as well as other details, will be laid forth in the plan. Access to the properties should be shown on the plan as well.

Work with a company that has localized expertise in civil engineering, land surveying, and environmental consulting.

To begin, they will examine the landscape's topography to locate irreplaceable natural resources and regions off-limits to construction. Using this data, they will draw inferred property lines. Then, they'll go over the zoning restrictions in your area and provide you with some concept drawings of potential layouts for the land.

With fewer houses and smaller lots, open-space developments can preserve natural areas.

Residential, commercial, and amenity space all coexist in a mixed-use development.

Sites with difficult limitations or little architectural potential can be transformed into profitable properties through the construction of affordable housing, which benefits those on lower incomes.

Common areas, leisure centers, and condos all come together to create ideal living conditions for the elderly. This strategy has shown promise as a method of luring new people without overwhelming the local educational system.

The design firm will work with you to survey the site, demarcate wetlands, design drainage, and implement erosion control measures once you've decided on a subdivision plan.

Check out the grounds. There might be surveying options in your area. If you can't do this yourself, you'll need to engage a private surveyor or engineer to do a survey and draw up a plat. A "plat" is an accurate scale map of a piece of land that details its various subdivisions. It shows things like property lines, flood plains, roads, and access rights. It gives a detailed description of the property in legal terms. Any parcel of land that will be subdivided must be accompanied by a plat.

Please apply to the appropriate government department. The decision on whether or not to grant your petition rests with the local planning board. Be sure to enclose a plat map, title certificate, and application fee with your submission. Your case will likely be decided at a regularly scheduled meeting of the planning board. Other times, a hearing will be open to the public.

When you are ready to lodge your subdivision plans with the local planning board, you should contact them to set up a pre-lodgement meeting. Don't forget to bring your subdivision drawings and title certificate.

The size of the land should be indicated, along with the location of any buildings (both old and new), driveways, and parking spots.

The council's urban planners will look over your plan to make sure it jives with existing regulations. Don't be shocked if they suggest tweaks and improvements to your plans.

Discuss the council's suggestions with your design team, which may include architects, land surveyors, and development planners.

To submit an application, you must first ensure that you meet the aforementioned criteria. If you submit an application to a city or town, it will be processed and approved. The time frame for this procedure can vary from a few weeks to many months. Keep tabs on your application's status by maintaining open lines of communication with the council to find out if they have any questions or need any further materials.

If you need a planning or zoning waiver, file for one. You do have options if your land is deemed ineligible for subdivision or if your subdivision application is rejected. It is possible to restart the process by requesting a planning or zoning exception or waiver. In many cases, planning boards will approve exceptions after a second look if they are deemed reasonable.

Funding Property Division

Learn what goes into calculating the final price of a subdivision. The final price depends on a number of factors. Size, location, and intended purpose of the land all factor in. Subdivision counts are also a factor in total costs. The price will increase proportionally with the number of planned subdivisions.

Countless variables contribute to the overall price of subdividing property, making it impossible to provide an exact estimate. Factors including your geographic location, local zoning regulations, the dimensions and shape of your property, the presence or absence of any structures on the land, and the ease with which you can connect to the city's infrastructure all play a role.

A property survey, legal expenses, application fees, clearing the site, supplying utilities, inspection fees, and permit costs are all things that could be added to the total price of subdividing land.

Contact a local land-development company that employs civil engineers, architects, and land surveyors to find out how much it would cost to subdivide a piece of property. They will be familiar enough with the area to give you an accurate estimate of prices.

Take care of the local application fee. This fee is to be paid to the relevant government agency along with your application. Possible additional costs include those associated with a hearing, recording, review, and updated tax maps.

Depending on your geographic location and the number of requested subdivisions, you could spend as much as $10,000 on these costs. A lot of money can be saved if there are only two separate communities.

Recompense the surveying staff. It costs money to hire a surveyor. The cost of a survey will vary with the size of the property. The surveyor's fee could be anywhere from $500 to $2,500 for a smaller piece of land. Surveying and platting larger properties can be significantly more expensive.

Make the necessary repairs to the property. Costs may escalate greatly due to these prerequisites. It is common practice for subdivision approval to be contingent on the applicant making certain alterations to the land. Common examples include utility and sewage lines, as well as access roads. The price tag for these sorts of upgrades sometimes runs into the tens of thousands of dollars.