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Land Residual Value Calculator

Calculate the maximum price a developer can pay for land using residual value analysis.

Inputs

$
$
% of hard
% of hard
% of revenue
% of revenue
acres

Results

Residual Land Value

$2,640,000.00

≈ 6 average U.S. homes

Value per Acre

$264,000.00

≈ 6 Teslas

Value per Unit$66,000.00
Value per SF$6.06
Land as % of Revenue16.5%
Gross Revenue$16,000,000.00
Development Costs$9,840,000.00
Target Profit$2,400,000.00
How to Use This Calculator
  1. Enter Total Units, Average Sale Price per unit, and Hard Cost per unit (construction + site development).
  2. Set Soft Cost %, Financing Cost %, and Sales Cost % as percentages of hard costs or revenue.
  3. Enter Target Profit % — the developer's required return on the project.
  4. Set Total Acreage for per-acre value calculations.
  5. Review Residual Land Value — the maximum price to pay for land while meeting your profit target.
  6. Compare Residual Value per Acre against seller's asking price to assess acquisition feasibility.

How the result changes with Average Sale Price

Average Sale PriceResidual Land ValueValue per Acre
$1,045,000.00$22,764,000.00$2,276,400.00
$3,532,500.00$100,374,000.00$10,037,400.00
$6,517,500.00$193,506,000.00$19,350,600.00
$9,005,000.00$271,116,000.00$27,111,600.00

What each input means

Total Units
Total number of units or lots to be developed.
Average Sale Price
Expected average sale price per unit.
Hard Cost per Unit
Construction and site development cost per unit.
Soft Costs
Architecture, engineering, permits as % of hard costs.
Financing Costs
Construction loan interest and fees as % of hard costs.
Sales Costs
Commissions, marketing, closing costs as % of revenue.
Target Profit
Developer's target profit as % of gross revenue.
Total Acreage
Total site acreage for per-acre calculations.

How this is calculated

Worked example, using the default values

  1. Identify Input Parameters
    4 parameters
    Total Units = 40, Average Sale Price = 400000, Hard Cost per Unit = 200000, Soft Costs = 15 = 8 input(s) provided
  2. Calculate Residual Land Value
    Residual Land Value
    2640000 = $2,640,000
  3. Calculate Value per Acre
    Value per Acre
    264000 = $264,000
  4. Calculate Value per Unit
    Value per Unit
    66000 = $66,000
  5. Calculate Value per SF
    Value per SF
    6.06 = $6.06

Engine last updated . Checked against 1 independently-derived test — how we verify calculators.

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