If you happen to be lucky enough to own a large block, then there’s a chance you can earn more money selling your property to a developer than if you brought it to the open market.
But how do you know for sure that your land is suitable for development? Start by looking around your neighborhood. Is your block one of the largest? Are medium and high-density developments popping up near you?
Another reason for making such a big change is the liveability of your neighborhood. The emergence of new services, shops and other places of interest, or infrastructure projects, might put you on some keen developer’s radar.
However, developers have never been known to be shy, so another way you can tell if someone is eyeing your property is if they call you up and tell you!
For those interested in selling to a developer to be able to move onto your next home or investment, consider the following:
What Makes a Block of Land Attractive?
The most important thing to consider is whether or not your block can be redeveloped, which will be determined by zoning laws. You’ll have to check the specifics for your locality, but most will deal with one of the following conditions:
- Minimum block size. Usually, a block needs to be double the minimum to be able to be redeveloped. Blocks over 700 square metres are more likely to qualify, but this will vary from town to town.
- Land slope. Some councils will have different requirements for blocks on sloping land, so make sure you check on this.
- If you subdivide, then you need to make sure each unit has it’s own driveway, so you need to check there’s enough room on the block to make this happen.
Developers have lots of experience when it comes to deciding which properties to buy when.
For example, developers will be more attracted to properties close to good school zones, as well as public transport and local community actions. Also, if your land is near some desirable natural landscapes, such as a coastline, then developers are more likely to be interested.
Large infrastructure projects are also something that catch developers’ eyes. These signify the area is growing, and they also demonstrate that the government is willing to encourage that growth. Check with your local governments to see if there are any projects in the works that could help make your property more valuable.
How Can You Maximise the Price?
Once you’ve realised your block is an attractive option for developers, you’re going to want to start negotiating for the best price. Since most developers will knock any existing structures down, these don’t factor into negotiations too much. But there are other forms of leverage.
The first thing you should do is to get an independent appraisal of your land so that you can avoid being low balled. And you can also team up with your neighbours to negotiate in a group. Many developers like to buy many adjacent lots at once, so you can use solidarity as a means of securing a higher price. This can be a challenge, but group negotiating usually results in a 15-25 percent higher price as compared to selling on your own.
The information and links provided on this website are for general information only and should not be taken as constituting professional advice. This information does not take into account the financial situation or particular needs of individual readers. Before making any decisions about matters discussed on this website, you should consider whether it is suitable for you in light of your own circumstances, and seek appropriate advice.