development fesability check please?

[TMNT]

I know its a how long is a piece of string question, but can any just roughly verify these figures please, for 15 town house site

Expenses
Land: $530k
Plans/Permits: $30k
Construction: Low end build $170k per dwelling turn key
2550k
Misc: $50k
Agency Costs: 2.2%=$112k
Holding costs: 18 months: $240k
TOTAL: $3547

Income:
$340k x 15 =$309k+GSTx 15=$4635k

$1088k profit, ROI=30.6%

Its in the maitland area

 

[Tigerboy]

I'd be surprised if you could start and finish the project in 18 months. I'd suggest you assume 30 months. Also contingency of $50k for such a large project is way too little: go with $130k.

Now to be sure drop your sales figures by 5% and if it stacks up good.


Haas Kaplan

 

[LeoT]

Expenses
Land: $530k
Plans/Permits: $30k
Construction: Low end build $170k per dwelling turn key
2550k
Misc: $50k
Agency Costs: 2.2%=$112k
Holding costs: 18 months: $240k
TOTAL: $3547

plants/permits (if including design) seems a little low. What about architect? Site costs? and contingency does seem a little low. I've realised time and time again to try and have a good fat contingency. If you can, do a sencitivity analysis from best case to worst case and see how the return on TDC fares.

Good luck mate!

 

[TMNT]

thanks everyone appreciate it

just confirming that I have take my sales as $309+GST right??

there is no way around it unless I keep all of them and sell them off over 50 years!!!??

 

[chindonly]

What about infrastructure charges?

Up here they are about $28k a dwelling.

15 x $28k = $420k!

Contingency?

Escalation?

 

[D_One]

You should realise you are not paying GST on the full sale price. You get GST credits on the cost to build apportioned to each unit provided you are registered for GST.

Say Unit A cost $200k to build and you sell for $350k, you will pay GST of (1/11 * (350 - 200)) = $13,636.

 

[TMNT]

You should realise you are not paying GST on the full sale price. You get GST credits on the cost to build apportioned to each unit provided you are registered for GST.

Say Unit A cost $200k to build and you sell for $350k, you will pay GST of (1/11 * (350 - 200)) = $13,636.

yes, correct,

However my figures have been misleading

when I quoted $170k for construction, I quoted $170k+ gst , as when I talk with builders its ex gst prices,
so unless im wrong, im paying $17k in gst for construction, and collecting $31k from the sale, which makes it the same as my original calculations, as im paying an extra $17k on my original calcs, however ive collected $31k, which means I have to give $14k back to the ATO on top of the $17k

(im obviousl ignoring marginal cost scheme for arguments sake)

What about infrastructure charges?

Up here they are about $28k a dwelling.

15 x $28k = $420k!

Contingency?

Escalation?

wow, I better check that out!

 

[+Mpire_Builder+]

thanks everyone appreciate it

just confirming that I have take my sales as $309+GST right??

there is no way around it unless I keep all of them and sell them off over 50 years!!!??

If you decided to change intention (originally to sell as a development) to keeping them all then you would need to refund any GST credits claimed on construction costs. Cant have your cake and eat it too