10 Things to Keep In Mind If You Want To Subdivide Your Property

July 4th, 2007 categories: Buying Land Advice, Down to Earth Information, Real Estate News

Farmers So you are ready to let some of your precious land go to another landowner, or even to a group of landowners, in hopes of using that equity to take a trip you’ve always been dreaming of, or pay off your kids college, or just not have to take care of it and pay taxes on it anymore. Whatever the reason, be sure you do your homework. These are just a few things I have learned that could save you a little stress. Good luck!

1. Talk to your Planning and Zoning authorities. Let them know what you plan to do and listen to them. If they recommend larger than one acre lots, don’t subdivide into one acre lots. Remember, they are thinking like the social engineers they are trained to be and talk all day to developers, engineers and occasionally a homeowner. So they do not always think about the cost or complexity to you, a lowly individual. So ask questions and listen, they will steer you in the right direction. Always write down who you spoke to, when, and what was discussed.

2. Start compiling a list of costs before you begin. Permits, driveway, engineering, aerial shots, improvements and a survey all add up and vary depending on the job that you are doing. Try once again to quote people or get it in writing. Just the cost of asphalt can fluctuates depending on the time of the year. Make sure you understand anything you sign and it states specifically what you will be receiving and when.

3. Find out if there is some leg work you can do yourself to keep the expense down. Find out from planning and zoning what you can do versus what an engineering company needs to do. An engineering firm will charge considerably more for something as simply as sitting at a community meeting waiting for people to show up. If it is a complex subdivision and will raise lots of questions from neighbors this may be worth the cost.

4. Hire a good engineering company: Get referrals from neighbors that have done the same. I have worked with two different companies and they were like night and day. Please get a referral from someone that has actually used the company. Be wary of a referral because they are a local business or friends, that is no guarantee of a good business.

5. Talk to your neighbors. Find out how they feel about developments that are going in the area. Without letting them know what your intentions are, you can get a good feel for whether they will “do anything to keep that from happening here” or whether they themselves are thinking of dividing in the future.

6. Expect the unexpected! As in any “project” there will always be something come up that could be a obstacle. Sometimes it just involves more time, or an unexpected expense, or even something as simple as missing a space on an application form. If you realize this happens in almost all cases, especially to someone who has not done this before, you will take this bitter pill easier.

7. Have lots of patience. Even when someone says, “We’ll get right on this” remember they have a different time frame than someone who only has this one task to focus on. In the same breathe, if they say check back in a week, be sure you do. Sometimes a gentle nudge gets more done, then waiting and getting upset when you realizing nothing has been done.

8. Don’t make any financial plans until you see the end in sight. It is so easy to spend what you hope to make before you make it. Remember nothing is certain in this business. You may not get neighbor’s approval, or a building permit, or find someone who is willing to buy. It’s a whole lot less stressful to not have bills that need to be paid off, in case this process doesn’t pan out as planned.

9. Be aware of capital gains. Talk to your accountant to see if there is some way of deferring the taxes or what the best route would be for you. After going through all the work and frustration of this procedure, the last person you what to siphon off 30% is the government. At least know for sure how much of your gains you will have to forfeit, it may make a huge difference.

10. Keep a journal of all conversations, date time and who you spoke to. This bears repeating again. It will save you many sleepless nights!