This calculator is no substitute for detailed Due Diligence and research.
The calculators and tools on this website are provided for your information and to illustrate scenarios. The results should not be taken as a substitute for professional advice.
It is distributed on the understanding that the authors and/or publisher are not attempting to
render legal, financial, investing nor other professional advice.
All reasonable care has been taken in preparing and designing the calculators; however, PPP provides no warranties and makes no representation that the information provided by the calculators is appropriate for your particular circumstances or indicates you should follow a particular course of action.
The projected figures generated by this calculator aren’t guaranteed, are provided as an illustration only, and may vary from actual results. The calculator isn’t intended to be and shouldn’t solely be relied on when making a decision about your investing.
The purpose of this calculator is to be a guide only for a quick feasibility check to see if the project warrants further investigation.
The ability to shortlist through a process of elimination is empowering because you are making the most of your most valuable asset - time ! The quicker you can eliminate dud deals straight off the bat, the quicker you will maximise your returns and reduce risk of overpaying for property.
ASSUMED LEVEL OF KNOWLEDGE
It is assumed that you have a basic understanding of property investing in general, and have a basic understanding of developing residential property and costs involved in Victoria.
If not please contact the office to enquire on our educational products prior to using this calculator, or even to ensure you are making the most of the calculator.
This calculator is provided assuming you are purchasing a residential property to either renovate, subdivide and build and/or small developments.
Purchase price - The listed price of the property that you are able to acquire it for using :
- Market value - current asking price
- Worst case scenario - highest price you are willing to pay
- Best case scenario - best, most realistic price you are willing to pay
Closing costs 5.5% - In Victoria, the legal costs and stamp duty involved in a residential property transaction is usually around 5.5% of the purchase price
Other holding costs- a small allowance set aside for annual costs for land tax, council contribution, connecting services ( water and electricity)
Interest - Assuming 4% interest PA - will switch to 2 years if more than 3 dwellings
Renovation costs - Assuming a cosmetic renovation of 10% of the purchase price
Subdivision costs - Assuming total costs of drafting, town planning, surveying, council costs, installing infrastructure costs etc (Refer to our 12 steps to subdivision for more detailed information about what to expect in the process of a subdivision). We assume 5% of the building costs
Build Costs - Assuming $1600 a sqm for a medium-high level finish. Please ensure your builder has confirmed these prices as build costs can vary greatly depending on your builder, location, finish, engineering requirements, your relationship with the builder etc etc
Contingency - We always allow 5% for of the build costs for any contingency we might run into during the build process
Council contribution - Depending on the council you are developing in, the council contribution can vary quite significantly if you are developing more than 1 new dwelling. We have assumed 8.5% as a worse case scenario that kicks in if you are building more than 2 new dwellings
Sell costs - We allow for 3% of the total sale price of the project for commission and marketing costs
Total Costs - Is the sum of all the entire costs of the project
Gross Realization Value - Enter the number of dwellings/land you plan on selling after the work is completed. Use the Columns to fill in how much you plan to sell finished products on the market based on :
- Market value - current value of comparable products on the market or sold inside the last 6 months
- Worst case scenario - upto 10% drop in price and/or price of the cheapest closest comparable on the market or recently sold (inside last 6 months)
- Best case scenario - price of the highest, closest comparable on the market or recently sold (inside last 6 months)
Total Gross Realisation Value: Total sales value of finished products
Gross Profit - Sum of the Total Costs less the Total Gross Realization Value of the finished products
GST margin scheme - is a rough guide on the GST payable for the project using the margin scheme. Under the margin scheme, GST is calculated on the sale as 1/11th of the margin. The margin is the GST inclusive sale price less the original purchase price
******This calculation is a guide only and cannot be relied upon as an accurate GST calculation to your individual circumstances. Getting the GST wrong can mean losing out big on your profits and potentially turning a profit into a loss. Please ensure you are getting appropriate advice from a professional about all things tax and finance related.This calculator is for a rough estimate only based on the GST margin scheme. The GST margin scheme is a way of working out the GST one must pay while selling a property as part of a business. Furthermore, this calculation does not in any way calculate tax implications on your individual income. Again it is highly recommended you seek professional advice for your situation******
Profit after GST - Is the Gross profit less the GST payable on Margin scheme.
ROI or Return on Investment : Is the Profit after GST divided by Total cost of the project as a % . We aim for 20% or higher as a guide.
COCR or Cash on Cash Return : Is total Cash back divided by total Cash invested as a %. We aim for 20% or higher as a guide
Interest for cash : Is the total interest paid back to any investors who contributed cash into the project. A return of 5% is assumedProfit after interest to cash partner @5% : This is the total profit after GST and after interest payable to cash partners.