Should you subdivide yourself, or sell to a developer?

If your block has genuine development potential, you have three options: subdivide it yourself, sell to a developer, or partner with one on a joint venture. Unusually for someone in my position, I teach a course that helps people choose the first. Here's how to think it through.

Option 1: Do it yourself

"Doing it yourself" can mean several quite different projects:

• Keep the house, create one new allotment behind or beside it. Least disruptive — if the house leaves room for access, services and the new block.
• Demolish, subdivide, sell vacant land. A cleaner layout, but you lose the house and any rental income, and you fund demolition and clearing.
• Subdivide and build the new homes. Theoretically, the most profit, and by far the most project. Now you're funding construction and carrying market risk to the end.

Be clear which one you mean before you compare anything.

The upside: you keep the developer's profit.

The reality check:

• Capital: a simple one-into-two division starts around $32,000–$42,000, before any demolition or construction.
• Time: commonly 9–12 months to new titles, carrying holding costs the whole way. Up to 24 months if you're building as well.
• Risk: markets move, costs blow out and approvals throw up surprises.
• Work: surveyors, planners, SA Water, council, conveyancers. Manageable — thousands of South Australians do it — but it's a project, not a transaction.

If this path appeals to you, do the WEA course first. Half a day covering the fundamentals before you commit tens to hundreds of thousands is cheap insurance.

Before you attempt this, you need to know how to run a proper feasibility assessment. You also need to know how to do basic due diligence on the site.

Be warned. Contrary to what you've heard at the barbecue, most sites you could develop will lose money or break even. Do the homework before you start, and make sure yours is one that makes money.

Prefer an answer for your own block? Request a free assessment — no cost, no obligation.

Option 2: Sell to a developer

The upside: you convert the potential to cash now — no capital at risk, no timeline, no project management, no agent commission on a direct sale, and settlement on your terms.

The trade-off: the developer must build in their margin, so you receive less than a perfectly-executed DIY subdivision might net. You're trading a share of the upside for certainty. That's often a sensible swap. Especially if you don't have the capital, borrowing capacity, knowledge or time to deliver the development to a profitable outcome.

Option 3: The middle path — joint venture

Contribute the land; the developer funds and runs the project; you share the profit. You keep meaningful upside without writing cheques or managing trades. The price is time (you're paid at the end, not the start) and shared project risk. For owners with patience but no appetite for the work, it's frequently the best of the three — and it's a structure we offer.

A joint venture is more involved than a sale, and the structure matters. Here's how JVs actually work: the agreed land value, the order the money comes out, and what to ask before you commit your property.

Compare them on the same basis

The common mistake is to add up what nearby allotments sell for, then compare that total with a developer's offer. That skips everything it takes to produce those allotments.

Compare like with like. For each option, work out what actually reaches your pocket:

• Do it yourself: what you'd keep once every cost is accounted for and deducted.
• Sell to a developer: the price and terms someone will put in writing now.
• Joint venture: your share of the result, and when you'd actually see it.

Then set those against a fourth number: what the property would fetch today, as it stands, on the open market.

A simple decision framework

Don't leave tax to the end

Tax can quietly eat the apparent profit. Depending on the property's history and what you do with it, the proceeds may be a capital gain or ordinary income, and GST may apply. Building to sell is a different position again. Talk to an accountant who knows property development before you sign anything — not after the allotments have sold.

Run the numbers before you choose

All three options come back to the same set of numbers: what the finished project is worth, what it costs to deliver, and what margin the work must earn. Once those are on the table, the right option is usually obvious. We'll run them for you at no cost, and tell you which way they point — even when they point away from us.