All Topics / The Treasure Chest / Acceptable Profit on Development

Viewing 5 posts - 1 through 5 (of 5 total)
  • Profile photo of AdministratorAdministrator
    Keymaster
    @piadmin
    Join Date: 2013
    Post Count: 3,225

    What would the acceptable profit margin on a development project of units? Anybody have any steadfast rules on percentage return for risk?

    Cheers
    Canuck

    Profile photo of dr housedr house
    Participant
    @dr-house
    Join Date: 2001
    Post Count: 281

    Interesting question, I think developers have high risk and therefore have high profit margins.
    I am sticking to developing my suburban backyards, so I know roughly my profits, risk and my choices are high in terms of keeping the backyard land and building, selling the land or keeping the backyard and selling the fronthouose or keeping the lot.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Go for at least a 25% margin. There are always going to be cost blow-outs and unforeseen expenses, so you need this much to make it worthwhile

    Terryw
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of truebluetrueblue
    Member
    @trueblue
    Join Date: 2003
    Post Count: 142

    My property developer mate tells me it’s closer to 30%. This apply to Perth properties. Not sure what is the rate on the east coast.

    Profile photo of B.DerosB.Deros
    Participant
    @b.deros
    Join Date: 2003
    Post Count: 34

    Some developers just want to keep their builder mates busy when the housing economy is quiet :)

Viewing 5 posts - 1 through 5 (of 5 total)

The topic ‘Acceptable Profit on Development’ is closed to new replies.