Mark Upton, Sub-Division Expert and Director of Upton Properties.
Property subdivision is becoming an increasingly viable way for individuals to secure an additional source of income, gain increased flexibility or simply maximize the value of a site. However, should you believe your property is a candidate for subdivision it’s always advisable to approach the opportunity from an informed standpoint and to seek professional advice prior to pursuing any particular option.
“In many instances subdivision is attractive because the ‘sum of the parts is essentially always worth more than the whole’,” states Mark Upton, sub-division expert and director of Upton Properties, an estate agency situated in Newlands, Cape Town. “Increasingly, homeowners on larger plots of land in suburban areas are considering subdivision either as an attractive investment possibility or as a way in which to adapt their lifestyles to better suit their changing needs,” he explains.
“Many people entering retirement, for example, simply don’t feel ready to make the move into a retirement village but rather wish to remain in their existing surrounds, without experiencing a relocation along with all the necessary adjustments and upheaval that may entail,” says Upton. “By remaining where they are, however, they may continue to experience the higher property rates, security issues and maintenance costs that are part and parcel of residing on a larger property. Subdivision is often an attractive option in these cases,” he explains.
“Firstly, it allows the individuals to remain on the property they’ve come to know so well, but reduce their costs. Secondly, it can provide increased opportunity for income generation, particularly in challenging economic times.”
Sub-division as a concept is a good one says Upton, but people need to conduct the appropriate research and seek advice from a reliable estate agent. An agent should be able to advise what type of property will sell or rent easily and whether it is a viable option to sell the land alone or go that step further and build. Considerations such as the impact on the value of your current home, parking, separate driveway access and so on, also need to be taken into account. “It’s often a good idea to explore all options available to you, in these cases,” says Upton. “In some instances, subdivision can mean that a developer can situate a number of homes on your existing plot – plus an entirely new home custom-designed to your current requirements.”
Some of the points to consider are as follows, he says:
Your neighborhood or vicinity
The current development climate sees the Cape City Council actively encouraging ‘densification’ in earmarked areas – particularly those close to major roads and public transport. This has been the case for some time. The drive to densify increases the rates base for the council, of course, but another real benefit is that development through densification creates jobs and boosts the local economy.
“However, what you’re able to do in one suburb may differ greatly from another – and how your property is zoned is important. For example, a 2000sqm plot in Newlands or Claremont may be able to be sub-divided into multiple plots, whilst in Constantia you may discover there are regulations that restrict you from subdividing at all. It all depends on the neighborhood and it’s current zoning legislation”.
“The location of the existing house on the site is an important factor when considering subdivision. If it’s situated in the middle of a small plot this could pose a challenge to further development, whilst a corner property can prove an advantage because you can create two separate access points to the property. If your site is next to a National Road application will have to be made to the National Roads Agency for permission, as your subdivision may affect their future plans. If your site is zoned agricultural, then an application will have to be made in terms of the Act 70 of 70 (Sub-division of Agricultural Land Act)”.
Whether a site is sub-divisible is usually dependent, of course, on the size of the site and what council regulations are for your suburb. Your local Town Planner or Land Surveyor can advise you of the possibility of subdividing, the minimum site size requirements in your area and other factors such as building lines and maximum allowable floor areas.
Once you’ve considered your environment, your neighborhood and the likelihood of being able to sub-divide, you can decide on one of several options:
1. Sub-divide the land, keep your house and sell off the plot/s.
2. Sub-divide the land, keep your house and build on a plot or plots
3. Sub-divide the land, keep your house and build another house or flats on the property to yield a regular rental income
4. Demolish the house and sell off the plot/s.
5. Demolish the house and develop the land into a security estate, townhouses or a block of flats.
Demand is relevant to the area where you live, so again, speaking to a local real estate agent can help you to answer this question. “We’re seeing a growing need for cluster- or security estate style accommodation in Cape Town’s Southern Suburbs in particular,” says Upton. “Not everyone is looking for a large home on a sizeable block that requires constant maintenance. This also provides another option for people to buy into an area they might otherwise not be able to afford.”
“The main consideration is to establish whether you believe your property is worth something more to you and whether you would like to stay on the property and perhaps enjoy a rental income, or reap the rewards of selling or developing the land,” says Upton.“If you decide to go ahead with any of the sub-division options, you’re pretty sure to be better off in the future. At Upton Properties we can help you through any land subdivision process you’re considering in the Southern Suburbs, and recommend good partners who’ll assist you in the process,“ he concludes.