Home, Land, Property Buying and Selling - $25,000 to subdivide??!!

I recently bought a home on 16,000 sq/ft that includes a "2nd lot". It's on a rectangular-shaped piece of property. Most of the adjacent citizens/developers have divided their 16,000 sq/ft lot into 2 8,000 sq/ft lots. This would not impact on my home's functionality.

I checked the county records and my 16,000 sq/ft currently shows as a single parcel. I would like to divide it into two, thereby "creating" an asset- as buildbable lots in my area are going for around $100,000. I don't want to sell it, but it seems that I can create as asset where there really isn't one now (I don't think the extra space adds much to my home's value). I could then leverage this asset to borrow money to buy a rental. Alternately, we may build another house or duplex on the 2nd lot later.

However...big however...it looks like it would cost us $25,000 just to subdivide? That's how I understood what I read on the county's website. Does this sound right? If it DOES cost that much, would we need to pay that in order to build a second dwelling back there? Sheesh...we're just lookin for some free money already...too much to ask? lol

I don't know for sure but that figure might include things you don't need to do like paving a road and getting utilities run. Dividing a lot into 2 with both having road frontage should be cheaper. I subdivided a corner lot several yrs ago. It did require county approval. It also doubled the property tax - even before improvements were made to the lot :eek:

Usually there is an impact charge when hooking up to public utilities but this is normally due only at the time such hook up is installed.

The costs I encountered were, survey fees and county fees to hear the proposal and then recording fees when approved. You may also need to hire a lawyer depending on how things work in your locale.

I have a couple of questions...what have your neighbors done once they subdivided their lots?? Did they sell them?? Are there other people in your neighborhood that have the same size lot as you?
You already have an asset your 16k square foot lot with a house which you say once is subdivided you would not sell.
What are similar houses like yours going for in your neighborhood? as opposed to a house with 8k square feet? and of similar sized house?? Extra sized property "generally" is worth more than one of half the size.
I know that there are exceptions, to me it would not make sense to do this and incur the expense of doing so.
Your property tax no doubt would go up ie having two properties.

Mark_ms

Nothing is free. For the reasons you have stated for wanting to divide your lot, it would not be worth your time. Yes, the price is probably correct. It might not be quite $25,000, but I bet it is not far off. Sub-dividing is expensive. Then trying to leverage the value. The bank would probably only lend you maybe $25000 if in fact the lots are going for $100,000. About 1/4 the appraised value. This is a different value then the selling price. It is very possible, that you could lose money on this kind of a deal. I would wait and divide it when you are ready to build. Just a little correction in your terminoligy. In your initial letter you stated you and purchased a house on a 16000 sq ft lot, which included a 2nd lot. What you really did was buy one lot that could be divided providing the county lets you. Have a good day.

Hey thanks for the feedback. I left out some details as to not confuse the issue, but since Mark_MS asked:

The original 16K lots in the area are very rectangular and deep. What others have done is to get easements with the adjacent owners and put access roads in between the frontage houses that go back to the houses in the back sections. It looks like people subdivided and sold since it's rare that the front houses match the rear houses. I would say the majority of the neighborhood is laid out that way. it's pretty odd.

I'm going to take all ya'lls advice and skip it I suppose. Perhaps I'll wait until next year and borrow the money to build a duplex back there as a rental. I wonder if I can make that pencil out to a positive cash flow situation...but I suppose that is a question for another forum....

I am not sure what the $25,000 represents. You need to find that out.

Subdividing should involve:

a survey
title work
possible fees to the county/township
lawyer fees to get it all done right.

I can't believe it would cost anywhere near that, so find out if that number is some pie in the sky or what.

I will say, if you plan to do it, do it now. If you wait the local government could rezone in the meantime and effectively take this option off the table. You should probably review the exisiting zoning anyhow. You may find out it is not currently zoned for duplexes and would need a variance or non-conforming use but that is a whole other issue.

Good Luck!