Retirement might be fast approaching, or it might have already happened. The kids have long left the nest, and the thought of downsizing your home might have started to creep into your mind. But what if you're perfectly happy with your home? It might have been a perfect family home, and while you might not necessarily need the extra space, it could still be a perfect home during your retirement years. While you might not much like the idea of downsizing your actual home, you could consider the possibility of downsizing your property. Have you thought about retaining your home while subdividing any excess land?
Size and Demand
The suitability of such a plan depends on whether your land is of a sufficient size to create a subdivision, as well as whether demand exists. Examine the development of subdivisions in your area, paying attention to how long it took for the plots to be sold, along with the prices these plots sold for. This can be a helpful means of gauging demand.
While you might have the necessary space, you might not have space that is suitable for subdivision (or at least, not at the level you initially thought). It can be prudent to hire a land surveyor who can definitively determine the suitability of the land. It might be immediately evident that not all of your property is suitable (such as if a considerable portion of the land is sloped), but professional surveying will let you know just how many lots your property can realistically be divided into, in line with zoning regulations for the area.
Financial Obligations and Liabilities
In addition to professional surveying, you should also consult an accountant to determine your financial obligations, both in regards to any upfront outlay for beginning the subdivision process as well as any ongoing tax liabilities. It might be that your profit margins will be slimmer than you first thought.
Selling or Retaining Ownership
You also need to carefully weigh up the pros and cons of simply selling the land to a developer and allowing them to proceed or of retaining control (and ownership) of the project. The latter option allows you to construct dwellings on the subdivided lots for the specific purpose of becoming rental properties, giving you additional funds for your retirement years. Again, you need to be mindful of your obligations and liabilities.
While you might not want to downsize your home, you could certainly think about downsizing the land on which it sits.