Hey All,
I know this question is very vague but I am subdividing my land and thinking about selling the vacant block as opposed to developing it myself. I am however unsure about how a builder would go about doing a feasibility and from this work out how much profit they would be aiming for to make it worthwhile.
My numbers look like this:
Build Cost (I have been quoted about 350k) so if i use a rule of 20% markup then I would say a builder could do it for 280k.
I am hoping to sell the land for 260k including closing costs.
The builder then has holding costs and once completed agent fees for selling so let us say another 20k.
So they are at around 560k.
I anticipate the completed value at around 650k so if they were to sell it the profit would be around 90k but then ofcourse they need to pay the GST. I really have no idea how this works but I will use 30k
So my numbers have it at around a 60k profit. Happy for others to correct this!
But if I was at about the mark is this something builders would be happy with? Or would they be aiming for more given my sums do not add a safety net and 60k could end up being 30k.
I know this question is very vague but I am subdividing my land and thinking about selling the vacant block as opposed to developing it myself. I am however unsure about how a builder would go about doing a feasibility and from this work out how much profit they would be aiming for to make it worthwhile.
My numbers look like this:
Build Cost (I have been quoted about 350k) so if i use a rule of 20% markup then I would say a builder could do it for 280k.
I am hoping to sell the land for 260k including closing costs.
The builder then has holding costs and once completed agent fees for selling so let us say another 20k.
So they are at around 560k.
I anticipate the completed value at around 650k so if they were to sell it the profit would be around 90k but then ofcourse they need to pay the GST. I really have no idea how this works but I will use 30k
So my numbers have it at around a 60k profit. Happy for others to correct this!
But if I was at about the mark is this something builders would be happy with? Or would they be aiming for more given my sums do not add a safety net and 60k could end up being 30k.