Development Profit Calculator
Calculate your projected development profit, margin, and return on investment. Input your project figures below to assess viability.
Project Financials
Interest, arrangement fees, exit fees, and other finance charges
Architect, solicitor, planning, QS, and sales agent fees
Net Profit
£275,000
Margin
22.92%
ROI
34.38%
Profit Analysis
Profit Margin
22.92%
Profit on Cost
29.73%
Return on Investment
34.38%
GDV Breakdown
Strong Viability
Your project shows a healthy profit on cost of 29.73%. Most lenders look for a minimum of 20% profit on cost, and your scheme meets this threshold. This project is likely to be attractive to development finance lenders.
This calculator provides indicative projections only and should not be relied upon as financial advice. Actual profits will depend on market conditions, construction costs, sales performance, and other factors. Always conduct a full development appraisal with your professional team before committing to a project.
Understanding Development Profit Metrics
Assessing the profitability of a property development project is fundamental to securing finance and making sound investment decisions. This calculator helps you quickly evaluate the key profit metrics that lenders and investors use when appraising Fulham development schemes.
Profit on Cost
Profit on cost is the primary metric used by development finance lenders. It is calculated as net profit divided by total development costs. Most lenders require a minimum profit on cost of 20% for residential schemes. This provides a sufficient buffer to absorb market movements, cost overruns, and extended timelines.
Profit Margin
Profit margin is net profit expressed as a percentage of the Gross Development Value (GDV). While not the primary metric used by lenders, it provides a useful benchmark. A healthy profit margin for residential development in Fulham is typically 15-25%, depending on the scale and complexity of the project.
Return on Investment (ROI)
ROI measures the net profit relative to the capital invested (purchase price plus build costs). This is particularly useful for comparing different development opportunities and understanding the efficiency of your capital deployment.
Contingency Planning
A well-structured development appraisal always includes a contingency allowance, typically 5-10% of build costs for standard projects and up to 15% for complex refurbishments or heritage buildings common in Fulham. Lenders will scrutinise your contingency provision as part of their credit assessment, and under-allowance can jeopardise funding approval.
Fulham Market Considerations
Property values in Fulham vary significantly by micro-location. Parsons Green and Hurlingham command the highest prices, while areas undergoing regeneration like Sands End offer stronger development margins due to lower acquisition costs. Always work with local agents to validate your GDV assumptions before committing to a project.