Develop · feasibility
Reverse Feasibility
Work backwards from your target margin to derive the maximum viable land purchase price.
Setup
Mode
Type
Property & revenue
Lots
1
2
Subdivision costs
Parameters
Development margin
20.0%
Meets target, go
Profit
$130,435
14.5% on GRV
Max land price (RLV)
$424,222
at target margin
Total development cost
$652,174
Peak funding
$605,822
land + costs deployed
Gross realisation
$900,000
$782,609 net of GST
| Gross realisation (GRV) | $900,000 |
| less GST on sale | -$117,391 |
| less commission | -$22,500 |
| Construction | -$0 |
| Site & consent costs | -$68,000 |
| Development contributions | -$80,000 |
| Contingency | -$11,100 |
| Finance | -$46,352 |
| Land | -$424,222 |
| Net profit | $130,435 |
Indicative only, not financial or tax advice. GST treatment is a standard registered develop-and-sell model.
Sensitivity
| Margin % | Sale -10% | Sale -5% | Sale +0% | Sale +5% | Sale +10% |
|---|---|---|---|---|---|
| Cost -10% | 286.7 | 305.6 | 324.2 | 342.6 | 360.7 |
| Cost -5% | 281.2 | 299.8 | 318.2 | 336.4 | 354.3 |
| Cost +0% | 275.8 | 294.2 | 312.4 | 330.3 | 348.1 |
| Cost +5% | 270.6 | 288.8 | 306.7 | 324.5 | 342.0 |
| Cost +10% | 265.5 | 283.5 | 301.2 | 318.8 | 336.1 |
Development margin (% on cost) at sale-price × cost movements. Shaded vs your 20% target.