Unlike passive investment where you purchase a home, rent it out and wait for it’s capital value to increase over time, subdivision requires your active involvement. This type of investment has lots of financial upside but requires you to roll up your sleeves.
One form of subdivision is to purchase a raw parcel of land to form a large housing estate. Another version is to build on an existing property with a second dwelling. Examples are duplexes and dual occupancy properties.
Subdividing can also include creating an entire new block of townhouses or units. This is usually in medium-density areas on land allotted for that purpose by a council encouraging residential development.
Then there is the possibility of purchasing an existing apartment block to separate or strata the title. This way you can sell single units within the complex.
Steve McKnight, a property investor and author, wrote about a successful purchase he was involved in which illustrates the idea of subdividing. “We bought eight previously strata-titled dwellings as an entire package deal and we’re just going to sell them off individually.
“We haven’t had to do any of the development work, it’s all been done for us. But we had the advantage to buy wholesale in terms of purchasing all eight units and then selling retail, by selling them off one at a time.”
If you have a question about real estate, or would like assistance in locating a property, feel free to phone me, Noel Thompson Principal Professionals Logan Lifestyles at either Browns Plains 3800 4000, Marsden 3200 4495, Springwood 3808 5544 or Waterford 3299 7733.
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