Capitalising on Poorly Zoned Land 
 

Land that is zoned without a building entitlement and poorly marketed is an excellent opportunity to be re-marketed with actual legal uses.
 

These properties attract poor demand and buyer enquiry unless the consumer is fully aware of their legal uses. So don’t be afraid to look outside the box and capitalise on the land by correctly knowing legal uses:
 

• Shipping container (NSW)
• Power, water connections
• Levelling a site
• Some shelter
• Caravan (Days allowed will vary with each local Government Shire)
• Clearing land
• Building a shed (Size will vary in each state, NSW 50m/2, Vic 10m/2)
• Fence
• Vegetable  patch
• Livestock
• Relocatable building (will vary with each Shire)
   

Each state has its own planning laws and by-laws regarding caravan uses, and the above list is an example of these exemptions.
 

When surrounding land values with dwellings are high and expensive, entry into the property market can be very difficult for some people, particularly in sort-after locations (close to the sea, shortage of land availability, close to a major capital city).
 

As a general rule and guide, valuing or praising these land parcels is difficult. 20-30% of the value of land that has a dwelling entitlement of the same size as a base to start from. Real estate agents find it hard to value these properties and can be marketed below their full potential value.
 

REDA website categories that can help you find these types of properties:
 

• Sale of land unpaid rates/sheriff auctions

• Double blocks/multi-lots
   

Examples of case studies of completed property acquisitions we have completed using this strategy are:
 

Afterlee NSW ( Kyogle local Government Sale of land unpaid rates 2018)
 

Acquisition: Paid $1,500 for 5 lots on 1 parcel: lots 16,17,19,20,21 (solicitor split titles)
 

Zoned rural: No dwelling entitlement sizes varied from 50 m/2 to 1500 m/2
 

Sale Results: Each lot was  remarked with legal uses and resold for $10-12,000 each
 

Peak View NSW ( Cooma local Government Sale of land unpaid rates 2016)
 

Acquisition: Paid $3,500 for 2 lots on 1 contract: lots 9 and 20
 

Zoned rural: No dwelling entitlement 4.3 acres
 

Sale Results: Was it re-marketed for legal use and resold for $25,000?
 

(Illustration is from the internet  sold history 08/03/2016)

15 View hill ave, Hollands landing, Vic
 

(Acquisition  purchase multi-lots category 2013)
 

Acquisition: Paid $6,000 for 5 lots on 1  title: lots 1,2,3,4,5 (solicitor split titles)
 

Zoned farming: No dwelling entitlement; each lot was 600 m/2
 

Sale Results:  Each lot was re-marketed for legal use and resold for $5,000 in total.   $25,000

Don’t be discouraged by rural, farmed-zoned lots! These lots have value, as seen above, and can be very profitable.

Multi lots/ double blocks category is great for these parcels of land.
 

Vendors most times with these zoned blocks and other blocks will sell in ( in one line), meaning 2,3,4,5,6 etc lots as a whole, because they cannot be bothered selling them separately. It is as simple as that !!!

Banks are wary of lending on these lots as they are risky security, so it's best to have cash funds available or a very low LVR (loan-to-value ratio) of 50% or more.

Recreational land like this is very attractive because of the low price entry into properties close to capital cities due to the high land prices of building blocks. These blocks can be very hard to resell if you price them too high and you want to be too greedy, so it's best to price them conservatively lower than other blocks in the same suburb to make them attractive value to the consumer. So your purchase price should be assessed correctly to ensure enough margin profit in the acquisition.

Below is a deal we completed in Vic. The vendor just wanted to sell the property as a whole to make it easier for themselves, thus not allowing the property to reach its full realised market value. We did our homework and found recent comparable sales similar to lots up the road that sold the same year for $220-240,000.
 

Crown Allotments 1,11,12 Honeysuckle Rd, Vic 45 mins from Melb
 

(Acquisition multi-lots category 2020 )
 

Acquisition: $380,000 3 lots on 3 titles
 

Zoned Farming: No dwelling entitlement; each lot was 20 acres approx. Potential planning permit, sheds allowed, power available
 

Sale Results: Each lot was re-marketed with legal uses of $220,000 to $260,000 each             

Total $660,000 

Do your homework and due diligence. Key points to remember:

• Research recent comparable sales for the same year and on the same street.
• Check available services ( power, water, sewer, telco).
• Make sure you have cash or excellent equity for purchase.
• Ring local agents to get a feel for demand in the area.
• Make sure there is a margin in it from the purchase price.
• Be prepared for a long time to sell them.
• The resale price should be lower than other comparable blocks.

At the end of the day, we believe that you make a profit when you buy, not when you sell!
 

There are many multiple allotments on the market; in some, the numbers don’t stack up. The more you research state and area, the more educated you will be about what best blocks can turn around and make a profit.