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In New Zealand, subdividing your section is an increasingly popular way for landowners to make a smart investment and create opportunities for their families. However, for those in the know, the process is notoriously complex, with a range of factors to consider to ensure regulations are met and that you’re making the best use of the land you have.
We had a chat with Will Batts, Franchise holder of both Sentinel Homes Counties & Franklin, and Sentinel Homes Auckland Central, South & East, about his experience delivering subdivision projects that work for both investors and homeowners looking to build for their future.
When we first started to discuss subdivision as an option, Will was quick to point out how it makes a lot of sense from a financial perspective. “Typically, density is always more profitable,” he explains. “The opportunity is significant, and it always is when you're providing more, like multiple dwellings on one existing site. As soon as you add an additional unit, it's an exponential jump. When you provide another home, you're immediately hitting a certain price point.” He also explains that when managed properly, subdividing your property is a solid long-term investment. “Even if there’s a downturn in the market, if you can hold on to it for a while, you're probably going to do well. You don't have to sell it immediately, and there’s the option to rent the property out.”
But the benefits that come from subdividing aren’t just for those looking to grow their property portfolio. “The opportunity is you can set yourself up for retirement,” says Will. “A lot of mum-and-dad developers will do it with their kids. There’s all kinds of clever ways you can finance these, and families work together to build multiple homes to provide for their loved ones and have them living literally next door.”
Subdividing property can be a daunting task, with key considerations that can make or break a project, which is why Will was keen to point out how crucial it is to have a knowledgeable, experienced team leading the way. “The critical thing is managing your risk, and the best way to manage your risk is to get an experienced team behind you,” he explains. “We don't try to say that we're going to protect you from every possibility, but we mitigate risk in accordance with industry best practice so you know that everything that can be done is done.”
An example of this is how the team manages the vital stage of ensuring key services such as water and electricity are provided across your build. “When you have an experienced consultant, they know based on experience what needs to be done and what the worst case scenarios might be,” Will says. “Having this insight means that we can have more confidence in our planning and have contingencies in place for what we know could happen. Once we have all these plans in place, the actual building and subdivision works are pretty straightforward.”
Will explains that a huge part of their role in subdivision projects is to make a tricky and high-stakes process easy to understand and navigate for their clients. “We’re here to be your trusted guides because these are generally more expensive projects with more variables,” he says. “Therefore, you need experienced operators that know what they're doing and can walk you through the process.”
Through years of experience, the Sentinel team has broken down the process into three stages. “The first stage is the feasibility stage,” Will explains. “That's where we’re gathering 2information before any money changes hands. You're getting reports from consultants, you're getting high-level quotes, you're doing some rough sketches and location plans. This gives us a solid basis to see if the project is viable, and if so, build a meaningful and relatively accurate preliminary budget estimate.
“The next stage is to get resource consent for the subdivision and overall site layout, which is a pretty tried and true process. We've got some of the best consultants in the industry working with us, which gives us the confidence that everything across engineering, environmental protection, and subdivision consents are all covered.”
“Then the third stage is building consent, which is gaining consent for each planned dwelling, providing compliance with building codes, and locking in the internal plans and external details of the houses.”
Will points out that although the initial feasibility phase is in depth, it’s a small investment with a potentially huge payoff. “We're helping people unlock their land and charging very little in that feasibility phase because it has the potential to lead to a build project, which is our core business.”
With his unique experience as both a property developer and professional architect, Will has a keen insight into why other providers have failed to break ground on subdivisions in the past. “I'd say the major thing is they fail because the key constraints are misunderstood early, not because they're difficult, and that comes down to the experience of the team. So our focus as a business, and where we excel, is good quality communication, so you can plan and feel in control of your project. If something unexpected pops up, we give you as much notice as we can with a few options to mitigate. Building is building, so there's always going to be surprises, and when they do, you know if you're working with an expert or not.”
When it comes to the homes designed for your subdivided section, Will is clear about what he and the team are here to achieve. “We're not doing, like, shoeboxes. We want to be doing decent-sized homes, either duplexes or standalone homes at a higher density.” With that comes a need to understand how to best design and situate these homes to make use of a smaller footprint. But Will explains that this can provide even more of an opportunity than that big open land that many Kiwis grew up with. “New Zealand is founded on the quarter-acre section dream, but that is not actually as glamorous as you think,” he says. “For a start it’s expensive, and secondly, a lot of those properties were developed with large sections with a building just sort of swimming in the middle of a large rectangle. There’s no real consideration for natural light, outdoor living, privacy, prevailing winds and so on. I'd say most people now would look at a well-designed small section and get a lot more utility and enjoyment out of living in that rather than what's across most of Auckland with old buildings and poorly laid out sections.”
Will points out that Auckland in particular is an incredible market for subdivision, with plenty of homeowners considering it as an option, and making these subdivision dreams become a reality is where he and the team are at their best. “Our unique offering is that we both have a lot of experience and expertise in subdivision, and are really familiar with the Auckland market, as far as what the buyers want, but also the unique challenges that are presented. We know the bureaucracy that needs to be dealt with and how to get things through the process.”
In signing off, Will gives some pretty clear advice for those thinking if subdividing is an option for them. “I'd say get your free site check. It’s free and you might be surprised what you can do and how achievable it might actually be.”
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Have you been considering subdividing your property? Get in touch with your local Sentinel Homes team today to discuss.
Let’s get together for a free, no-pressure meeting with one of our team, at your place or ours.
We can't wait to hear your ideas!
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