“The whole is more than the sum of its part” is an important principle in psychology. It describes the importance of viewing an object as a whole rather than viewing it in separate parts and then trying to make sense of it. While that is a perfectly sound principle in psychology, many consider it to be applicable in the case of land. To them, a large plot of land is better than subdividing it into small plots. On the other hand, there are people who also believe that dividing a large piece of land into small plots is better. So the question is who’s right? Is subdividing your land worth it or just folly? Join us, as we try to figure out if there are truly any benefits of subdividing land below!
Impact on Value
Land is always considered a great investment, the reason being its upward trajectory in terms of value. While the value of land rarely (if ever) decreases, you might gain a bigger payday if the land is subdivided. For example, if I decide to sell a 1 Bigha of Land at BDT 2.4 Crore, I would be selling per Katha for BDT 12 Lakh. However, if I were to sell the same sized land but divide it according to 2 Kathas, I could probably sell it for 14 Lakh per Katha. The reason being, you always need to give a discounted price when selling anything in bulk, including land. As a result, the total value of subdivided lands is usually 15-20% more than a big piece of land.
Changing Demand
Another important aspect that you need to consider when contemplating the benefits of subdividing land is its demand. Since not every land has the same demand, you need to consider where your property falls on the ‘demand scale’. Proximity is a good indicator of high-quality land; it sets the tone for the overall demand of the area. However, you need to consider another factor to decide whether you should divide your land or not. And that factor is the most demanded size of plots in the area. For example, a 5 Katha plot in Malibagh will be more in-demand than a 10 Katha plot due to cost. On the other hand, a 10 Katha Plot in Purbachal Marine City is may be more popular than other sizes.
Shape and Slope
The shape and slope of the area needs to be considered when you are thinking of subdividing your land. If the entire land is on a flatbed, there’s nothing to worry about as it allows construction throughout the plot. You can easily consider the property for subdivision since no part of it will be unusable. However, unfavorable shape or slope of the property will discourage buyers. In that case, selling the property as a whole will be more profitable as small segments of property are usually left alone for various reasons.
Access to Utilities
What is the value of a residential or commercial land without access to vital utilities? People need water, power, and even sewer lines to live in a community. So if your property only has access to a single unit of utilities, you need to reconsider subdividing it. Even if you have access to a few, consider what sizes you should divide your property into so that every one of them has proper utility functionality and while remaining profitable.
Land Encroachment
One of the biggest threats landowners of Bangladesh face is the threat of land encroachment. Every landowner needs to take measures to prevent illegal land grabbing by miscreants. These measures can be more easily and cost-effectively applied when there is a single piece of land. When a single plot is subdivided into multiple plots, the risks and the costs multiply. Inability to enforce proper security measures will result in powerful people strong-arming you out of your much-valued land.
Investing in land is a big deal. You need to consider a lot of things before you choose what to do with it, including whether to subdivide it or not. While there is no ideal solution for all, the points we mentioned will help you clearly identify what is right for you and if the benefits of subdividing land worth it or not.
