Residual Land Value Calculation

The Residual Land Value Calculation model allows you to determine the value of a piece of buildable land from a developer’s point of view and cross-checks the results by analysing the profits and returns to the developer.  Understanding the developer’s profit calculation is the key to obtain the maximum land value a developer should be willing to pay. So this model starts from the profit and return calculation from a developer’s point of view and works back to obtain the residual land value.

The financial model template allows you to put yourself in the shoes of the developer:

  • What price he/she can sell the developed land/real estate?
  • How much his/her development costs are expected to be?
  • How much bank financing can he/she obtain?
  • How long will it take him/her to develop the land?
  • What profit/return does a developer require in order to do such a project?

The financial model then provides you the calculations of the cash flows from a developer’s point of view, which allows you to backsolve how much a developer should be willing to pay for the piece of land. This leads to the residual land value.

 

The Model comes in two version, a Free PDF Demo Version and a Full Excel model version with all cells editable.

 

 

Residual Land Valuation
Residual Land Valuation – Developer budget and schedule

 

Residual Land Value – Developers Cash Flows

 

Assumptions Residual Land Value Calculation
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Summary The Residual Land Value Calculation model allows you to determine the value of a piece of land from a developer's point of view.
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This is a collection of financial model templates for Real Estate businesses and its related sectors. The models included in this bundle are the following (all Excel models): Joint Venture / WaterFall Real Estate Financial…

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