What Is Subdividing Land?
Splitting property, or subdividing it, entails a property owner dividing his or her land into two or more properties.
Here we'll address surveying off part of a property to subdivide it. First, let's touch on why people sometimes choose to do this:
The decision to split or subdivide is typically spurred by the property owner wanting to sell just a portion of their property or to allocate a portion to family.
An investor divides land in effort to sell the parcels at a higher cost per acre and therefore profit more on the overall property.
Additionally, sub-dividing property can make it more obtainable in terms of price-point and therefore marketable since smaller portions of land--even if more per acre--cost less than a large un-divided property.
Note: Being a small town aficionado and resident myself, there can be a mindset among locals that subdividing land will affect the small-town vibe and bring in many 'outside' people. We're going to objectively review splitting property, still, without attached emotional sentiments, though.
Split a Property: Costs
Subdividing land is governed by regulations that exist at the state, city/town, or county level. Local officials hold the authority to deny or approve land division based on but not necessarily limited to certain considerations such as --
size of the property;
shape of the property;
placement of structures--houses, buildings, barns, etc.--on the property;
access to water, sewage, etc.;
local zoning laws
There's not a one-cost-for-all approach here. Fees are dependent on the local rates and the payment unto the surveyor, among other fees, which we'll cover below. The size of the property and its location, as well as the market, can affect the cost of the process to subdivide land. All-in, expect to be in the thousands. For large properties, these costs can indeed add up.
How to Subdivide Land / Split Property to Sell
These steps can act as guideposts for you, though processes can vary:
Research
Grasp the restrictions in your area. Are you bound by any covenants? Deed restrictions? What does local ordinance say? Find a locally recommended title company to conduct a title search to discover the answer to these questions and to uncover if there are any liens on the property in question.
Contact Local Offices
Get in touch with the local planning and zoning or development in your area to discover the necessary process you need to undertake. Simply visit your county website and go from there. Take good notes and stay organized in the process.
Ask one of these local officials if you should consult with a subdivision planner, specialist, or lawyer, and, if so, whom they recommend. It also won't hurt to ask for their recommendation on who to hire for the next step, to survey your property:
Hire a Surveyor
Choose a local surveyor or surveying firm. They will survey and plat your property as well as help vet its eligibility to sub-divide.
Apply
That's right, we're not done yet! Next you have to actually officially apply to divide your property. A submission may require but not necessarily be limited to the following:
Certificate of title issued by the title company after their title search
Your just-conducted survey/plat map
An application fee
Await a response
from local council. Some localities will require a public hearing.
Approved? Start planning . . .
Assuming you've been met with approval, any wheels you need to start turning into motion can begin to roll! Engineering? Installations? For instance, will you be building another house on the subdivided property? Installing a septic system? Needing to draw out more electricity and install a meter? Get to planning. Also ensure the surveyor or firm you enlisted places boundary identifiers.
Not done yet! Get Certification
Request certification after planning board approval. Certification verifies the approval of your impending projects or next steps.
Lastly, get new titles
When your property is officially sub-divided, obtain new titles with the title company.
How Long Does the Subdivision Process Take?
The process will vary from location to location and depends on a host of factors such as--
location and lot size
engineering and planning requirements
local processes, scheduling, and availability
Over-budget the time needed and even anticipate the process taking up to a year! Again, much depends on your location. Speaking of local, let's touch more on local fees:
Local Fees
There are fees beyond an application fee, covering your bases with your titles, and paying a surveyor or firm. Costs can really mount up, so be diligent in your research and record-keeping, remembering that the reason you're sub-dividing, such as for profit, should make financial sense. Local fees alone may range between $500 to $10,000 or even upwards for large properties such as ranches.
Additional places fees will add up can include--
tax map-updating fees
review fees
hearing fees, if a hearing is required
required Improvements, such as access requirements utilities, etc.
Tips for Simplifying the Subdivision Process
First, use all the local resources and recommendations at your disposal.
Often, locally provided services save you money and yield trustworthy recommendations and referrals.
Defer to an Attorney
An attorney, especially one adept within real estate dealings, can help you each step of the process. Additionally, if you've been told your property cannot be subdivided, an attorney could help you appeal this declaration. A good attorney will have your back and guide you to the point that no stone is left unturned and his or her diligence and pool or relevant contacts may save you money in the long run.
Splitting Land: More Money, Yes?!
If not for family-related purposes, the primary goal of splitting land is to achieve smaller lot sizes to sell at a higher price than if they were still bundled together, a phenomenon that earns you more money in the end.
Caveats exist, though:
The market is always changing. The price you could obtain for a lot at the outset of your subdividing process might drastically differ from the price you could sell the lots for once your sub-dividing process is complete.
Lot sizes that are 'too small' may strike people as unappealing. Don't over-split your property. Understand what the most desirable lot size is in your area for your target buyer.
Subdividing is an expensive process in of itself. Be sure the costs associated with subdividing validate your end goal.
In a Nutshell
Subdividing land is an official process with official stepping stones. It's not concrete from one area to another; understand the nuances in your area by reaching out locally and building solid connections along the way. Entrust and defer to local officials to help ensure you are going about the procedure correctly as is specific to your area.
Have you undertaken sub-dividing your property? If you need help selling a property, subdivided or otherwise, Lauren's specialty are country properties, from Texas gentleman's ranches to dude ranches of all sizes. Reach out here >