One approach to property development, well known on ancient Roman battlefield, but equally relevant in the modern property arena is the well know tactic – to divide and conquer. Subdividing a property will increase your cash flow while expanding your portfolio. Two effective and economical methods of property subdividing are Strata Titling and Splitting. Both are very advantageous additions your property investing strategies.

Strata titling is taking one property or title and creating several. It applies to small blocks of units or flats that have been built in the past as one single property.

The concept of Strata Titling is dividing a property into a larger number of properties and selling them off individually in the market as a premium. Meaning, the value of the total number of properties adds up to a higher amount then the original purchase price.

For example having one property and strata-titling them into 5 units means that once each of those units are sold into the market place, we then realise our profit.

A surveyor will literally subdivide on paper with the boundaries of each flat. Typically this will be joining walls between the flats and if necessary the floors that separate each level. The surveyor will define the measurements and then through the land titles office will seek separate or RP or Real Property numbers for each flat. At this point the individual titles are can be sold onto the market and ready for settlement.

Fire separation between flats is a priority with councils. Ensure that the fire-rated walls between each flat continue right through to the underside of the roof. If not, seek consultation and costs from the builder in order that they do. If you’re working with multi-storey buildings, give preference to strata titling flats with concrete floors and not timber. Fire separation between timber floors is extremely expensive and is generally not feasible. It is for this reason it is recommended to source units that are of single storey brick construction.

Splitters are where we take advantage of old town planning methods. In the 602s and 702s around Australia, most residential blocks were subdivided at a acre or 1000m2. Today Local, State and Federal Governments all know the value of a more dense population. Governments save billions of dollars in infrastructure by encouraging the community
to live closer together. They even encourage the development of smaller blocks of land today that are in some cases less than 250m2.

Here the strategy is to option an old house on a traditional acre block (1000m2) and simply subdivide it into two blocks and on-sell both without settling on it yourself.
Put simply, we option the property for 18 months, submit an application to council to subdivide, pay the application fees and when the approval is granted, engage two good marketing agents and nominate two ‘dual-exclusive agents’. Have them on-sell the two properties and pay their commissions at completion. Settlement of the properties is when
the commission is due; therefore the commissions come out of the proceeds (profits at the end).

Massland Property Options, a leading property investment company, teach property developers how increase wealth with Strata Titling without using their own money, creating a dynamic workflow of control versus ownership.