Allocating Various Development Costs In Your Feasibility
Determine the End Value of Units
Research the selling price of similar units (e.g., two-bedroom apartments or three-bedroom townhouses) in the area. This helps in estimating the gross realization value (GRV). 00:00
Calculate Land Value per Unit
Input the land value, which gets automatically divided by the number of units to determine the land value per unit. 32
Construction and Consultants Costs
Determine construction costs and add a contingency percentage (e.g., 5%). Consultants’ fees are usually calculated as a percentage of construction costs. 95
Council Contributions
Calculate council contributions, which vary based on local regulations. This is often a percentage of the land value. 376
Marketing and Legal Costs
Allocate costs for marketing, legal fees, and miscellaneous expenses. These are often estimated per unit. 696
Finance Costs
Calculate finance costs based on the loan-to-value ratio (LVR) or loan-to-cost ratio (LTC). This depends on whether the lender bases the loan amount on total development costs or gross realization value. 790