Thinking of Subdividing? Here Are the Factors You Need to Consider First

If you’re thinking of subdividing or developing a piece of property, there are several factors you need to consider to determine whether or not that will be economically feasible.

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If you’re thinking about subdividing a piece of property or developing it and then selling it, you first need to determine whether taking this step is economically feasible.

Some parcels of land can be used for high-density development, but a lot of them can’t. This means you need to consider factors like how close your land is in proximity to the nearest city limits, whether your water lines and utilities are available and strong enough to service the number of rooftops you plan on building, how the land slopes in relation to the nearest sewer, etc.

Another factor to consider if your property is somewhat larger (50 acres or so) is whether the road accessing the property can handle the type of traffic that comes from being near the city limits. By and large, you can fit two and a half to three homes per acre on a developable property. By “developable”, I mean that the roads, sidewalks, and infrastructure can allow the fire and police departments to service the community properly.
 

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When a developer invests in a property, the most affordable part is the land, itself.

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It’s important for you to remember that when a developer invests in a property, the most affordable part is the land, itself. The expensive part is building the infrastructure and adding all the off-site improvements (i.e., water lines, sewer lines, gas lines, sidewalks).

On a 50-acre property, you can build anywhere from 100 to 150 homes. If you add that much traffic—say, two cars per household—to a county road that doesn’t have curbs, gutters, and proper stormwater planning, that can create a plethora of problems. Adding stoplights and turning lanes can cost up to $250,000, so that alone can make a property economically unfeasible for development.

Every property is different, and there are many other things to consider before you decide to subdivide and/or develop yours, but these are just a few factors to educate yourself about before moving forward.

If you have any other questions about this topic or you’re curious about what’s going on in our market, don’t hesitate to reach out to me. I’d be glad to help you.