How is subdivision the Key to Growing Your Property Portfolio?
Subdivisions can be an amazing way to grow your property portfolio, but they need the right approach to truly pay off.Â
Rise High Investor Weekly Video #40 Subdivision, how to make a profit
Step 1: Understand Your Budget and Borrowing Power
Before anything else, figure out how much you can afford to spend. Talk to your mortgage broker and get a clear picture of your borrowing power. Know the numbers—like how much rental income or sale price you can expect—to make sure the project is worth it.
Step 2: Look for the Ideal Property to Subdivide
Not all properties are great for subdivisions. Look for large blocks (750m² or more, depending on zoning), wide street frontages, or corner lots. Flat or gently sloping land can also save you money. If you already own a property, check if it fits the bill for subdivision potential.
Step 3: Consult Your Local Council for Guidance
Your local council is the best place to start. Share your plans with the planning department and make sure your ideas fit their rules. This step can save you time and money before you commit to hiring surveyors or architects.
Step 4: Create a Detailed Cost and Budget Plan
Create a detailed budget that includes subdivision fees, construction expenses, and holding costs. Add a 15-20% buffer to cover unexpected delays or costs. Careful planning now avoids headaches later.
Step 5: Research Property Values and Rental Returns
Research rental and sale prices for similar properties in your area. If you plan to rent, calculate whether the rental income makes sense for your investment. If you’re selling, ensure the potential price delivers a solid return.
Step 6: Confirm Your Finance and Ownership Structure
Get pre-approval for your finance and confirm your ownership structure. It’s best to plan this before you buy, but adjustments can still be made when demolishing the existing house if needed.
Step 7: Work on Subdivision Plans and Seek Approval
Work with an architect or builder to design plans that meet council rules. Make sure they include enough open space and proper setbacks. Be patient—the approval process can take longer than expected, especially if you’re pushing boundaries.
Step 8: Start Construction and Finalize Titles
Once approved, start construction and decide the best time to finalize subdivision titles—either before or after building. This depends on what’s most cost-effective for your situation. Collaborate with your team to choose the best approach.
Step 9: Revalue Properties and Optimize Your Finances
After finishing, get your properties revalued. If you’re holding them, switch to a better finance product suited for long-term investments. This step helps you optimize your portfolio for the future.