Develop and hold affordable housing

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We have a 50 unit affordable housing development that will have 30 residential and 20 serviced apartments, already DA approved and land owned with some early service and street connection work done

Because the GRV will be hard to determine for investors though we have solid rent figures, is the SFC the best feaso for this project to calculate the commercial return of the development to determine the equity component the financiers will need?

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Hi Michael,

Glad to help! With the information you have right now, the Smart Feasibility Calculator (SFC) will definitely get you started. As your project progresses and you gather more details, you might find that transitioning to Lead Developer will give you more in-depth insights, provided you have more detailed information about the project.

To effectively use the Smart Feasibility Calculator, you’ll need to focus on three main aspects:

  1. Costs - Hard (Construction) & Soft (Consultants)
  2. Combined Sale Value [Gross Realisation Value]
  • Residential Units (30 units): Determine the selling price per unit by looking at the market rate, which could be based on the number of bedrooms, overall configuration, or per SF/m² rate.
  • Serviced Apartments (20 units): Since these are likely to be leased out, estimate their value by figuring out the rent per m² and how you plan to lease them. Once you have the expected annual rent, you can determine the capitalization rate (a quick call to local agents can help with this), and SFC will handle the commercial calculations for you.
  1. Financing for:
  • Land Acquisition
  • Construction Loan

Once you’ve nailed down your financing assumptions, you’ll know how much capital you need to raise.

Keep in mind, SFC is primarily designed for “Develop and Sell” projects, meaning it assumes that all units will be sold once construction is completed.

So, to address your query, the Smart Feasibility Calculator is simple yet detailed, helping you quickly estimate the funds you’ll need to raise for your project. From there, your next step will be planning how to secure the remaining capital (developers/investor equity). SFC will give you a solid starting point to make those next decisions.

I’m here if you have more questions or need further assistance!

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