Target Development Margin / Yield On Cost
Determine Target Development Margin
The target development margin is used to calculate the residual value of the land, which represents the maximum price you should pay for a site based on its development potential. 00:00
Calculate Residual Land Value
Set a desired development margin (e.g., 15%) for a small site, and the tool will calculate the maximum land price you can afford to pay to achieve this margin. 31
Negotiate Land Price
Use the calculated residual land value to negotiate with the seller, ensuring you meet your development margin target while accounting for all project costs. 96
Feasibility Analysis Purpose
The primary purpose of the feasibility analysis is to determine the maximum land price you can pay while still meeting your project’s financial goals. 127