Title Splitting – what you need to know.
Title Splitting – what you need to know.
This article is all about freehold title splitting. This is something within the property space that you might find really interesting. This article will provide you with clarity all about the property splitting strategy. In fact, this article may give you an insight into a whole new way into property, that you have not considered at this point.
What is title splitting?
Title splitting is a legal process where you take a property that is on one title and split it into more titles. This means that you can separate different parts of the property off to sell them.
You may have already of heard of the subdividing model. This is where you have one property such as a house and split it into two separate flats within the same space. With this subdivide strategy, the property still sits under one title. So, you can run them as separate flats however, the title is all one. If you were to split the title, you could then start selling them individually to individual buyers. This is what title splitting is in its simplest form.
There are some other ways to consider title splitting. Take a look at the examples below:
You may have just purchased a large development that has a big plot of land. You could split of the piece of land so that you could create value just within that one plot.
You may have just purchased a house on a corner plot, that has the land to potentially build another property.
So, in theory, you split of and sell parts of your initial property.
Why might you implement title splitting?
If you implement and get this strategy right, you might not have to do any development to add value. This is the biggest key element about this strategy. This strategy is all about the paperwork exercises. So, a property that is on one title with multiple units, might not be worth as much than separate units on separate titles.
For example, if you could buy a property that has 3 units for £200k and split the title, it might be that each one of these individual units is worth £100k each. Therefore, you have added value just by splitting the title which is ultimately a paperwork exercise. This is why title splitting can be a really powerful strategy.
So, this strategy is not about a physical operation, it’s about a paperwork operation.
This strategy requires you to really research and think about the users and the space you will be dealing with. For example, you might choose to implement this model if you have purchased a bungalow with a large garden and from your due diligence you know that the users of this bungalow wont be interested in looking after such a large space. Therefore, you could split of some of its title and then do something else with the remainder of that garden. Another example could be if you are working more in the commercial to residential space and the property you are looking at has a car park that has more than enough car parking spaces for the flats.
You might want to split the title off and create additional value within that existing car park space. You could lease it to another company or sell it to another company.
The thing to take away here is that you can add value without doing any physical work.
Who would operate a model like this?
Is this the right model for you?
This title splitting strategy works well as it can sit alongside other property strategies such as the bungalow strategy, developing commercial to residential property and the subdivide strategy. So, if you are working on or want to work on any of these type of strategy then title splitting might be something that you wish to consider adding value to your property.
It’s important to have this knowledge as it’s a great way to get even more value out of a single development.
Furthermore, this is a great strategy for those of you who are very strategic in your approach. Those of you who love due diligence, paperwork and piecing the puzzle together but aren’t too interested in physical development. Its something that you can do just by using insight and strategy.
Ultimately this strategy can be employed by all of you who are willing to invest the time and energy to find sites where you add layers of value through simply using your knowledge. This is why this is such a powerful strategy.
When it comes down to the money aspect, don’t let that be a deciding factor, this strategy can work with zero money or even some money, but don’t let this influence your decision to do this strategy.
As mentioned previously, this strategy requires filling out paperwork and it requires you to really do your due diligence which takes time and effort.
Where should you implement this strategy?
When it comes down to the area that you should implement this strategy, it really depends on what you are wanting to title split. So, you can implement this strategy anywhere in the UK. Ultimately it really depends on what your end goal is and what you actually want to split. Something to remember is that this strategy works well alongside other strategies, therefore it is possible that it could work in the same area that you are employing your other strategy.
When would you think about employing this strategy?
This strategy would be good to employ when you have a little bit of experience within the property space and maybe developed an understanding of a few of the other property strategies. I say this because having a slight understanding in the property space will not only give you the confidence, but it will help you too see through the haze and really create value.
This is a great strategy to understand when you are thinking about adding value to others, because it may be that you don’t actually have to get involved with any purchasing. You could just maybe go and speak to some property owners and say to them have you tried this and this…this way you could add true value to you them and yourself.