For many common investors, small subdivision projects have become a popular way to make money. They are dependent on surveyors to finalize a subdivision marketing plan. The many planning modifications allowing for higher-density dwellings that are taking place in Perth's suburbs have undoubtedly been the driving force.
One of the concerns that these developers frequently pose is whether it would be preferable for them to sell the lots after the subdivision process is complete or to construct them first. At every deciding stage, a subdivision marketing plan has a major role, so the developer does not regret the decision later.
Generalizing the favor of one side or the other is impossible because every case is different. Understanding the main benefits and drawbacks of each option is a good place to start, though.
Selling The Land
Selling the divided lots provides the developer with an instant infusion of cash and the opportunity to start work on a new project right away. Of course, this is presuming that the lots can be sold without too much difficulty, which isn't necessarily the case. The subdivision marketing plan directs all the do's and don'ts. With this approach, a respectable profit can be made, although the majority of success stories include the developer keeping the property for a while before constructing.
Anyone who has sold land understands that it can be challenging to get top prices due to the ease with which one lot can be compared to another and the likelihood that buyers will be seeking to make a profit themselves. That is why, a subdivision marketing plan is needed for a systematic decision.
Selling the subdivided lots is more successful in locations with limited land and high population densities. Innovative tactics can include working with a builder to market the property as a home-and-land package or selling the land with authorized plans and permits already in place.
Constructing And Then Selling
The building appears to be a riskier choice because the developer is responsible for covering the cost of development. Longer timeframes and additional hassles are also factors to take into account. In this case, the subdivision marketing plan stands out somewhat differently, because the cost of construction is also included.
However, the profit will typically be more than when selling the land alone, in part because building often adds value above and beyond the cost of construction. Additionally, while selling a stunning new home to an emotional customer, it is simpler to obtain a strong price.
Additionally, construction opens up new possibilities. One option is to hold onto the properties and take advantage of the high rental revenue and depreciation allowances if, for example, selling the completed residences proves challenging, so is creating a subdivision marketing plan.
The best option for your situation requires careful calculations that take into account the danger and work needed, as well as the potential end values and various prices involved. Importantly, numerous tax ramifications could materially influence the choice. As a result, before making any decisions, you should consult with your surveyors and builders. A detailed and carefully framed subdivision marketing plan is the perfect starting booster to finalize the decision.
