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Zoning regulations: Everything you need to know in 2023

Property investors need to know about zoning regulations in order to maximise the profit of their investment. Here's what you need to know.

Zoning Regulations

Article summary

  • Local municipalities divide cities into zones to help with city planning. Zone types include residential, industrial, and commercial.
  • Property investors should be aware of zoning regulations when purchasing a property so they can plan its long-term development.
  • Zoning plans can be acquired from the local municipality, and estate agents are knowledgeable regarding zoning regulations.

Getting the most out of your property investment means doing your research, and one of the areas many investors fail to take into account is zoning regulations.

The more information you have available, the better to optimise your property. Information on zoning regulations can be obtained from the local municipality, so use these regulations as a guide when investing.

Zoning regulations: What is it?

Cities are divided into zones; each zone is intended for certain types of properties.

Zone types:

  • Industrial (warehouses, factories).
  • Commercial (shops, restaurants, offices).
  • Residential (houses, apartments).
  • Agricultural (farms, ranches).
  • Open space (parks, conservation areas).

Cities are planned by local governments just as you plan your home layout. Zoning is how they achieve this.

Zone restrictions

Each zone type is further divided into classifications that determine the types of developments allowed.

For example, residential zones are further divided into:

  • Residential 1: One dwelling per stand.
  • Residential 2: Allows for a density of between 10 and 20 dwellings per hectare (10 000m²).
  • Residential 3: 21 to 40 dwellings per hectare.
  • Residential 4: 41 to 120 dwellings per hectare.

Commercial zones may dictate what kind of businesses are allowed. Industrial zones restrict the types of industries allowed and the maximum size of buildings. And so on.

What does this mean for you, the property investor?

Investors need to be aware of zoning regulations when planning the long-term development of a property they intend to buy.

For example, if you purchase a property, how much height and density will you be able to add through renovations? This will be affected by zoning regulations.

But aside from knowing your limits, you also need to know how you can use zoning regulations to your benefit. For example:

  • Buying a residential property in close proximity to a commercial zone. Your property will increase in value as more restaurants and office complexes emerge.
  • Buying a property in an industrial zone close to residential or commercial zones and converting it into affordable accommodation. The property will increase in value as commercial and residential developments make the area more appealing.
  • Looking to buy a property that has nice views? Knowing the nearby zoning restrictions means you know the likelihood of tall properties being developed around the site.

Zoning regulations can change

It’s especially important for those who have owned a property for a prolonged period to know this.

If you’ve owned a property for, say, 10 years, zone designations in the area may have changed in that time and you need to be aware of it.

How to acquire zoning information

  • As mentioned, you can acquire zoning information from your local municipality.
  • But it may be more worthwhile to employ an estate agent when investing in property, as they will be aware of zoning regulations and can advise you accordingly.

Basically, you’ll be using the city plan when conceiving a plan for your own property.

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