Just wanted to get a sanity check on a number of calcs I did to figure out if subdiving and building 2x townhouses on a Melb metro block stacks up...
here it goes..
Land value: $640k
Build cost per townhouse: $272k (approx. 160sqm @ $1700 per sqm - mid level finish incl all professional fees)
No. of townhouses: 2
Total build cost: $544k
Project duration (from pre-planning meeting with council to practical completion): 12months
Interest rate: 5%pa
Total interest: ($640k + $544k)* 0.05 = $60k
Expected sell price per townhose: $700k
Therefore, potential profit = ($700k x 2) - $640k - $544k - $60k = $156k
Margin is 12.5%
Do these numbers stack up to proceed with the project if you were the developer?
Someone people have said if you cant make 15-20% margin then its not worth doing.
n.b. I have approx. $680k of financing lined up for this project. There is also potential to build 3x smaller townhouses (1x 3BR 2x 2BR) STCA
here it goes..
Land value: $640k
Build cost per townhouse: $272k (approx. 160sqm @ $1700 per sqm - mid level finish incl all professional fees)
No. of townhouses: 2
Total build cost: $544k
Project duration (from pre-planning meeting with council to practical completion): 12months
Interest rate: 5%pa
Total interest: ($640k + $544k)* 0.05 = $60k
Expected sell price per townhose: $700k
Therefore, potential profit = ($700k x 2) - $640k - $544k - $60k = $156k
Margin is 12.5%
Do these numbers stack up to proceed with the project if you were the developer?
Someone people have said if you cant make 15-20% margin then its not worth doing.
n.b. I have approx. $680k of financing lined up for this project. There is also potential to build 3x smaller townhouses (1x 3BR 2x 2BR) STCA