Subdividing a property is a simple way to cash up some of the equity sitting in land to help bolster retirement income.
Many retirees are land rich, but cash poor, Generation Homes Rodney Director Paul Barker says. People have large sections and much of their equity tied up in their land because their land values are so high. Also they face the challenge of increased living expenses and decades of good health in retirement.
For retirees or empty nesters who wish to free up some extra income, subdividing is a solution which Generation Homes can help with.
There are several potential opportunities for people who choose to subdivide – cash for the sale of the section to an investor, cash for subdividing and building and then selling a new home, or rental property income from either renting out the new home or renting out the older house and moving into the adjacent new house.
For instance, a retired Orewa couple living in the area zoned for high density may be able to subdivide off a section as small as 275m2. The subdivision will cost approximately $70,000 and after building a Generation Home for a fixed price they could potentially take $100,000 equity from the sale of the subdivided house.
People could be concerned about how subdivision would affect the value of their resulting property. With the right landscaping, Generation Homes don’t believe this to be an issue.
The achievement is a smaller, more manageable site and freeing up of equity.