Property Finance for Rural Subdivision

Managing a farm can be demanding, especially when income only just covers costs and debt. For some farmers, creating a small subdivision on part of their land can be a smart way to ease bank borrowings. With the right research, planning, consenting, and project management, a subdivision can often be completed and sold within two to three years.

A recent example, facilitated by our Waikato Adviser Dion Wright, shows what can be achieved. Dion arranged funding for $900,000 of project costs. He sourced options from three non-bank lenders, and the client selected the offer that gave them the most flexibility — with no pre-sales, registered valuation, quantity surveyor, or insurance required. $200,000 for planning and consenting was already in place with their bank but the bank wasn’t willing to approve any more funding.

The subdivision created six lots, each with a market appraisal of $650,000 (including GST). Once sold, the farmer is expected to net around $2,160,000 before tax — a strong result that significantly reduces debt and improves financial stability.

To learn more about how the right property finance could make a subdivision possible, contact our team of property finance experts today.