The most common definition of a subdivision in real estate terms is when a piece or parcel of land (referred to as a plot) is divided into smaller parts by its owner. A subdivision’s purpose is to improve land for future sale. Therefore, the landowner will enjoy higher revenue and greater investment flexibility.
The county administration creates a separate legal property title for each smaller section. Regularly, a subdivider is responsible for dividing a more extensive land into smaller units known as lots. For instance, a family farm can be divided into smaller lots. Throughout our history, subdividing land played a considerable part in rising from an agricultural community to a modern city, for example, in the curious case of Bowie, MD.
A real estate developer purchases the land to design and carry the infrastructure (roads, sewage, and roads) into effect. Then, a construction company develops a community of homes, wherein private properties exist known as subdivisions.
The act of subdividing knows many legal constraints before the sale and upon its development. The resulting subdivisions have to be approved by the countyadministration. Later, they can rename new lots for marketing purposes.
Though similar, there are fundamental differences between these two entities. The definition of a neighborhood isn’t as restrictive as a subdivision. It defines a geographical region hosting houses, apartments, and buildings (schools and stores). Roadways, highways, and city limits determine their territory.
Land use regulations influence subdivisions more emphatically. According to stricter county rules, developers and builders sometimes receive permits to build exclusively single-family homes, Another restriction imposed could refer to home sizes; for example, they cannot build a house smaller than 1,200 sq. feet.
Let’s suppose you consider selling a subdivision which is a tremendous real estate investment opportunity. By all means, you’ll have to respect and act according to the zoning laws when you apply for a zoning change or rezoning. A common conflict of interest occurs when you intend to build condos, but the county zoned the vacant subdivision for single-family homes.
Subdividing land can help
Secondly, subdivisions will give you the chance to sell unproductive pieces of land. You can even increase the rest of your property by doing so since your sold subdivided lots will undergo development. So, the neighboring area will become more attractive for future investments too.
Thirdly, selling a massive chunk of land can prove more difficult than several smaller lots. Sellers have to look into local real estate market trends and bring a reasonable decision, considering pros and cons. In doing so, local real estate agents can provide you with expert advice.