Do you think sub-division potential matters if you're using a never sell strategy?

[jerrybee]

Or would it only help people looking to eventually sell or develop? I mean sure, every bit helps, but I imagine for buy and hold investors, it would be a much less compelling part of the decision making process? Or am I wrong about this?

 

[thatbum]

I'm not sure what you mean. Subdivision potential is a critical factor when assessing a property's value and future growth potential.

Things I would care about even if I was a buy and hold investor.

 

[Propertunity]

....and to add, you may have a buy, hold & never sell strategy, BUT sometimes life happens and you need to sell for reasons unforeseen at the time when you first purchased.

 

[serendip]

You could buy / subdivide / build / hold both which would have a massive impact on the overall value of the property. I'm firmly in the 'it matters' camp.

 

[jerrybee]

Thanks guys, answer should have been obvious - not thinking today

 

[Big Will]

You could buy / subdivide / build / hold both which would have a massive impact on the overall value of the property. I'm firmly in the 'it matters' camp.

This is what I was thinking.

Buy it
Hold it
When able to subdivide and build
Profit with 2 or more properties.

Also you never know what your future holds.

 

[Terry_w]

Estate planning considerations and loan side needs to be considered too. Buy 1 property and chop it into 2 means can diversify lenders and leave one property to each kid rather than 1 to both, example

 

[see_change]

I'd hold a different view .

It depends on the situation .

If some thing has subdivision potential , then you are likely to be paying a premium for it , so the rental return is likely to be less , so you will either be able to buy less , or will need to put more money in to hold it . When we're buying standard IP's I don't worry about subdivision potential .mwe're not buying those locally and I wouldn't think about doing a long distant subdivision .

We have done two subdivisions on the north shore in Sydney on PPOR's , but neither were advertised as subdivision potential , and neither complied with the council guidelines ......

so we had to work around the edges of the system . Very good return but you needed to do what you were doing . We stumbled on the first one , but sought the second out . Took about six months of looking at every property that came on the market in our local area to find the second .

Cliff