How to work out what you can pay (GDV).
In the second of Target Five Property Consultants, Development Analyst; Sven Chesters video series on The Stages of Development, he is looking at the key points of Development Appraisals:
Working out your GDV (Gross Development Value):
– Focus on site capacity, what design can you get on the site, not what is there currently, you work out the value of that development when it goes to market= GDV
– Costs, from the GDV you take away all of your costs, which are; Profit, which you need to aim to be 20%, then work out your Build Costs, which are increasing substantially! we advise that you use a recommended QS. Next, work out your Professional Fees, architects, surveys, warranties, building control etc. Work out your Finance Costs and other costs such as Local Government Community Infrastructure Levy and S106 payments etc.
Once the above has been worked out, put it together.
GDV
– Profit
– Costs
= Residual Land Value (this is the maximum that you can offer)
There will be a total of 8 videos in Sven’s serie on The Stages of Property Development, missed any? don’t worry you can find them all under our IGTV option.
If you would like to find out more about T5 or about our investment opportunities, send us an email on information@targetfive.co.uk.⠀