Blog: R.E. Tales
(Hey, they all can't be pretty...)
Here is advice I gave a landowner who has 2 large pieces of family land, not the best, but in a decent area. They are trying to decide what to do with them.
Already there is one subdivision, 100 and 90 some acres. That one is “free”. Any others will bear the costs of survey and legal expenses each time one sells. You have to wait to receive all your money as well. And if it takes years, you can have significantly increased taxes. Each legal lot has what is called a “prime site”, the spot where a home could go (or is), and it is taxed at a much higher rate than the rest of the land. One parcel, one prime site. Not a big deal when you have lots of land, but it becomes one when the lots are small. If you go wild and start selling lots of less than 5 acres, then it is no longer considered a “minor subdivision” and all sorts of State regulations kick in that were in abeyance before, and your expenses go up. The greater the pressures on land (i.e. – greater population density and greater wealth in the area), the more you can get from subdivision. Along with that seem to be greater hassles from the powers that be. But not always or every time or place.
That said, subdivision means you are selling retail instead of wholesale – you get more money from each acre. 300 acres sells for less per acre than 100 acres. 20 acres sells for more than 75 acres. 1 to 5 acres sells for the most. It all depends upon the actual land and its location of course. There are certain folks who make their livings buying chunks of land, subdividing them, and reselling them. Sometimes they lose their shirts, but if they stay in business and operate right, it can be very profitable. Remember: if it were easy to do, more people would do it. Most land owners just want to have their land sold and not have a lot of hassles and they don’t want to take extra time over it. What often happens is that the most desirable pieces sell first, and the owner can be left holding the bag on the least desirable pieces. The trick there is to price them right, and it is a very real trick. “At the right price, every property sells.” Even experienced sellers do not always get that right.
Now, in your case, you have a pretty fair amount of road frontage. That’s a good start. Most Towns require 250’ of frontage. They (not all of them) usually allow larger tracts to have less frontage or even sometimes to be land-locked, but most often will require at least a 50’ Right of Way into them. You need to know the regulations and attitude your Town has before starting. Not all your land is easily buildable, due to soils more than slope or rockiness. Each home may need fill brought in or larger leach fields, a cost that will be passed onto the seller in one way or another. Not every buyer wants to build, however. Hunters are a good example, and they do buy, especially at this time of year (they are less active this year than they have been in the past – less and less folks hunt each year, it is a slowly dying sport). Hunters like larger tracts, for obvious reasons. And they don’t like lots of homes around them. You are not likely to find people who want to farm it there.
You have views, though not from everywhere. People like views. You have some woods. People like woods, especially when it is combined with some open land. The ideal lot is a mixture of open and woods with both views (high land) and water (lower land). Some of that can be arranged on your land. And you also have brushy areas, Folks don’t like those nearly so well. It represents lots of work and time to change them to fields or woods. I would spend some hours with an aerial map, drawing and erasing lines, to determine how feasible subdivision might be for me. How many pieces, their sizes. Then run that by someone with experience in selling land and get an estimate of what you could get from each piece. Factor in the costs for survey and for added legal expenses, and then for your carrying costs (including what is called “lost capital” – money you could have earned in the bank or wherever IF your property were sold at once). Then you will be able to decide if subdivision is the right step for you.
Some are merely amusing. some can help you immensely. All are interesting.
After 40 years, I've learned a lot, & acquired unforgettable experiences. Follow these long enough and you'll eventually get the whole book. (Names probably changed, for obvious reasons.)