Advice Needed -- Subdividing a Lot as an Investment

[Darren Maloney]

Level 2.5 acre lot for sale is surrounded by completed homes and has SFR residential zoning. Reading setbacks, frontages and minimum lot sizes would indicate that existing lots could be subdivided into multiple lots, maybe 10 on paper. Had someone say they it was uneconomic to do so. How expensive is it to subdivide lots and get sewer and water hookups?

Since adjacent properties, I would think hookups will be less onerous that a rural lot.  Seems like this could be a good investment when people are buying small houses for $400k+ just for the land and tearing down the existing dwelling. 

I don't know anything about City of Austin timelines, how difficult this is if time is not a concern, and how much the development costs are per lot or in total for a small subdivision.

Anyone have any thoughts on the matter? Thanks in advance!