function calculateFeasibility() {
// Get input values
var landPurchasePrice = parseFloat(document.getElementById('landPurchasePrice').value);
var acquisitionCostsPercent = parseFloat(document.getElementById('acquisitionCostsPercent').value);
var totalBuildableArea = parseFloat(document.getElementById('totalBuildableArea').value);
var buildCostPerSqm = parseFloat(document.getElementById('buildCostPerSqm').value);
var professionalFeesPercent = parseFloat(document.getElementById('professionalFeesPercent').value);
var developmentFinancePercent = parseFloat(document.getElementById('developmentFinancePercent').value);
var salesMarketingPercent = parseFloat(document.getElementById('salesMarketingPercent').value);
var contingencyPercent = parseFloat(document.getElementById('contingencyPercent').value);
var salePricePerSqm = parseFloat(document.getElementById('salePricePerSqm').value);
var targetProfitMarginRLV = parseFloat(document.getElementById('targetProfitMarginRLV').value);
// Validate inputs
if (isNaN(landPurchasePrice) || landPurchasePrice < 0 ||
isNaN(acquisitionCostsPercent) || acquisitionCostsPercent < 0 ||
isNaN(totalBuildableArea) || totalBuildableArea <= 0 ||
isNaN(buildCostPerSqm) || buildCostPerSqm < 0 ||
isNaN(professionalFeesPercent) || professionalFeesPercent < 0 ||
isNaN(developmentFinancePercent) || developmentFinancePercent < 0 ||
isNaN(salesMarketingPercent) || salesMarketingPercent < 0 ||
isNaN(contingencyPercent) || contingencyPercent < 0 ||
isNaN(salePricePerSqm) || salePricePerSqm < 0 ||
isNaN(targetProfitMarginRLV) || targetProfitMarginRLV 0) ? (profit / gdv) * 100 : 0;
// — Step 12: Calculate Return on Cost (ROC) —
var roc = (tdc > 0) ? (profit / tdc) * 100 : 0;
// — Step 13: Calculate Residual Land Value (RLV) based on Target Profit —
// This calculation assumes the land cost is the residual, working backwards from GDV and target profit.
// Non-land costs (build, professional, sales/marketing, finance, contingency) are calculated first.
// For RLV, finance and contingency are applied to the sum of the other non-land costs.
var rlvBaseNonLandCosts = totalBuildCost + totalProfessionalFees + salesMarketingCosts;
var rlvDevelopmentFinanceCosts = rlvBaseNonLandCosts * (developmentFinancePercent / 100);
var rlvContingencyCosts = (rlvBaseNonLandCosts + rlvDevelopmentFinanceCosts) * (contingencyPercent / 100);
var totalNonLandCostsForRLV = rlvBaseNonLandCosts + rlvDevelopmentFinanceCosts + rlvContingencyCosts;
var targetProfitAmount = gdv * (targetProfitMarginRLV / 100);
var residualLandValue = gdv – totalNonLandCostsForRLV – targetProfitAmount;
// Format results
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 0,
maximumFractionDigits: 0
});
document.getElementById('gdvOutput').textContent = formatter.format(gdv);
document.getElementById('tdcOutput').textContent = formatter.format(tdc);
document.getElementById('profitOutput').textContent = formatter.format(profit);
document.getElementById('profitMarginOutput').textContent = profitMargin.toFixed(2) + '%';
document.getElementById('rocOutput').textContent = roc.toFixed(2) + '%';
document.getElementById('rlvOutput').textContent = formatter.format(residualLandValue);
}
.calculator-container {
font-family: Arial, sans-serif;
background-color: #f9f9f9;
padding: 20px;
border-radius: 8px;
box-shadow: 0 2px 4px rgba(0, 0, 0, 0.1);
max-width: 600px;
margin: 20px auto;
}
.calculator-container h2 {
color: #333;
text-align: center;
margin-bottom: 20px;
}
.calc-input-group {
margin-bottom: 15px;
}
.calc-input-group label {
display: block;
margin-bottom: 5px;
color: #555;
font-weight: bold;
}
.calc-input-group input[type="number"] {
width: calc(100% – 22px);
padding: 10px;
border: 1px solid #ddd;
border-radius: 4px;
box-sizing: border-box;
}
.calculator-container button {
display: block;
width: 100%;
padding: 12px;
background-color: #007bff;
color: white;
border: none;
border-radius: 4px;
font-size: 16px;
cursor: pointer;
transition: background-color 0.3s ease;
}
.calculator-container button:hover {
background-color: #0056b3;
}
.calc-results {
background-color: #e9ecef;
padding: 15px;
border-radius: 4px;
margin-top: 20px;
border: 1px solid #dee2e6;
}
.calc-results h3 {
color: #333;
margin-top: 0;
border-bottom: 1px solid #ccc;
padding-bottom: 10px;
margin-bottom: 10px;
}
.calc-results p {
margin-bottom: 8px;
color: #333;
}
.calc-results p strong {
color: #000;
}
.calc-results span {
font-weight: normal;
color: #007bff;
}
Understanding Property Development Feasibility
Property development is a complex undertaking that requires meticulous planning and financial analysis. A Property Development Feasibility Calculator is an indispensable tool for developers, investors, and lenders to assess the financial viability of a potential project before committing significant resources. It helps to determine if a project is likely to generate a satisfactory profit margin and return on investment, or if the proposed land acquisition price is sustainable.
What is Property Development Feasibility?
Feasibility, in the context of property development, refers to the comprehensive assessment of a project's potential for success. It involves analyzing all aspects of a development, from land acquisition and construction costs to potential sales revenue and associated fees. The goal is to project the financial outcomes and identify any risks or opportunities.
Key Components of a Feasibility Study:
Land Acquisition Costs: This includes not just the purchase price of the land, but also associated costs like stamp duty, legal fees, and agent commissions.
Construction Costs: The direct costs associated with building the property, including materials, labor, and contractor fees. This is often estimated per square meter or square foot of buildable area.
Professional Fees: Expenses for services from architects, engineers, surveyors, project managers, planning consultants, and legal advisors. These are crucial for design, regulatory compliance, and project oversight.
Development Finance Costs: If external funding is required, this covers the interest payments, arrangement fees, and other charges associated with development loans. Even if not a traditional "loan calculator," these costs are a significant part of project expenses.
Sales & Marketing Costs: Expenses related to selling the completed units, such as real estate agent commissions, marketing campaigns, advertising, and show home setup.
Contingency: An essential buffer for unforeseen expenses, delays, or cost overruns. Typically calculated as a percentage of total project costs.
Gross Development Value (GDV): The total estimated revenue from selling all developed units or the total value of the completed development.
Outputs from the Calculator:
Gross Development Value (GDV): The total estimated revenue from the sale of all developed units. This is the top-line income figure.
Total Development Cost (TDC): The sum of all costs incurred to complete the project, from land acquisition to sales.
Project Profit: The difference between the GDV and the TDC. This is the absolute monetary gain from the project.
Profit Margin: Expressed as a percentage, this is the profit divided by the GDV. It indicates how much profit is generated for every dollar of revenue. A healthy profit margin is crucial for sustainable development.
Return on Cost (ROC): Also a percentage, this is the profit divided by the TDC. It measures the efficiency of the capital employed in the project.
Residual Land Value (RLV): This is a critical metric, especially when evaluating land purchases. It calculates the maximum price a developer can afford to pay for the land while still achieving a predetermined target profit margin. It works backward from the GDV and desired profit, subtracting all other development costs.
Example Scenario:
Let's consider a hypothetical development project to illustrate the calculator's use:
Land Purchase Price: $500,000
Acquisition Costs: 5% of Land Price
Total Buildable Area: 1,000 sqm
Build Cost per Sqm: $2,000
Professional Fees: 15% of Build Cost
Development Finance Cost: 8% of Non-Land Costs (Build, Professional, Sales/Marketing, Contingency)
Sales & Marketing Costs: 3% of GDV
Contingency: 5% of Non-Land Costs (Build, Professional, Sales/Marketing, Finance)
Sale Price per Sqm: $3,500
Target Profit Margin for RLV: 20%
Using these inputs in the calculator, a developer can quickly ascertain:
The total costs involved.
The expected revenue.
The projected profit and its percentage margins.
Crucially, what the land would be worth if they aimed for a specific profit margin, helping them negotiate land prices effectively.
By adjusting variables like build cost, sale price, or land price, developers can perform sensitivity analysis to understand how changes impact the project's overall viability. This calculator serves as a foundational tool for making informed decisions in property development.