Free investor tool
Development feasibility calculator
Check whether a small development stacks up: what it costs to buy, build, finance and sell, what the finished homes should sell for, and the profit margin that leaves.
Updated · Free, no sign-up
How it works
How a feasibility works
A feasibility sets everything the project costs against everything it should sell for. Costs are the land and its buying costs, construction, professional and council fees, a contingency, finance and selling costs. Revenue is the sale value of the finished homes, less GST where it applies. The difference is the profit, usually shown as a margin on total cost.
Lenders and experienced developers commonly look for a margin of around 15% to 20% on cost before they proceed, because builds run late, costs rise and markets move. The calculator also works backwards to the residual land value: the most you could pay for the site and still reach your target margin. It is a first check, not a substitute for a quantity surveyor's costing and your accountant's GST advice.
The numbers are one part of the decision
We look at the figures alongside growth drivers, vacancy, supply and how a property fits your borrowing and portfolio plans, then choose the market that suits your strategy, wherever it is in Australia. See how we buy investment property.
FAQ
Common questions
What profit margin should a development make?
There is no fixed rule, but lenders and developers commonly look for around 15% to 20% of total cost on a small residential project. A thinner margin leaves little room for delays, cost increases or a softer market.
What is residual land value?
The most a developer can pay for a site and still make the target margin. It is the expected sale revenue, less every other cost and the target profit. If the asking price is above it, the project does not work at those assumptions.
Is GST payable on new homes sold by a developer?
Usually. The sale of new residential premises is generally a taxable supply, so GST is 1/11th of the price unless the margin scheme applies, which can reduce it. This calculator lets you set the GST share of sales; ask your accountant which treatment applies to your project.
How is the finance cost estimated?
Land debt is treated as drawn for the whole project, and construction debt as drawn on average for half the build, a common rule of thumb for progress payments. Interest is charged at the rate you enter on those balances.
Is this financial advice?
No. It is a general estimate to help you compare options. It does not consider your personal circumstances, and results depend on the figures you enter. Check them with your accountant, mortgage broker or financial adviser before you act.
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