Hi,
I was reading the Rookie Developer article in the new Profitable Small Developments magazine (available only online) and was curious as to how his numbers worked. He purchased a property in Croydon North in Melbourne and built 4 townhouses. The total cost of purchase + build was $1.5m. The profit was $250k, meaning the margin on costs was 16% over 18 months. This seems like a low margin compared to what most people aim for being 20%. Does anyone know if this would be a typical return he would be achieving? Would this return be usual for small developments and would it be the larger developments of say 6 or more units that would return >20%?
Any of your thoughts or opinions would be greatly appreciated.
Cheers
I was reading the Rookie Developer article in the new Profitable Small Developments magazine (available only online) and was curious as to how his numbers worked. He purchased a property in Croydon North in Melbourne and built 4 townhouses. The total cost of purchase + build was $1.5m. The profit was $250k, meaning the margin on costs was 16% over 18 months. This seems like a low margin compared to what most people aim for being 20%. Does anyone know if this would be a typical return he would be achieving? Would this return be usual for small developments and would it be the larger developments of say 6 or more units that would return >20%?
Any of your thoughts or opinions would be greatly appreciated.
Cheers