Free residual land value calculator
Enter the program, sale price, costs, financing and the return you need. See the most you can pay for the land, what the asking price does to your profit, and how much room a $25 change in price or a $15 change in cost gives you.
You can pay up to $2,969,401.
At $3,000,000 you are $30,599 over.
Residual land value at a 15.0% target IRR.
| Price \ hard | $295 | $310 | $325 |
|---|---|---|---|
| $550 | $2,911,700 | $1,987,557 | $1,063,413 |
| $575 | $3,893,544 | $2,969,401 | $2,045,258 |
| $600 | $4,875,388 | $3,951,245 | $3,027,102 |
Sale price ±$25/sf by hard cost ±$15/sf. Amber is below the asking price.
Surveys, studies, legal, development charges.
Built at the hard-cost rate.
For example commercial NOI ÷ cap rate. Added to project value.
The defaults are the Base case of an illustrative pro forma. Replace them with your site's numbers. General information, not financial, legal or investment advice.
Residual land value works backwards from what the finished project sells for. Take away what it costs to build and finance, and the return your equity needs. What is left is what the land is worth to you.
Project value (TPV) = units × average unit size × sale price per sf, plus any non-residential value
Development cost = hard cost + soft costs + sales commissions + parking. It leaves out land and financing.
Financing load (k) = 1 + loan-to-cost × (interest rate × interest years × average balance + loan fees). Interest runs over construction and sell-out; pre-development is paid with equity.
Hurdle factor (c) = k + ((1 + target IRR) ^ hold years − 1) × (1 − loan-to-cost)
Residual land value = TPV ÷ c − development cost. Pay that for the land and the equity earns the target IRR.
At the asking price, the calculator also shows equity (total cost × (1 − loan-to-cost)), profit (project value − all-in cost), the equity multiple, and the breakeven sale price at which profit is zero.
No. It is simplified: the equity multiple annualized over the whole hold, as if all equity goes in on day one and comes back at the end. A monthly cash flow model with staged equity and loan draws will give a different number. Use this one to compare sites and prices, then model the deal properly.
The static RLV is the quick check: project value minus development cost minus your target margin. It ignores financing and time. The RLV at your target IRR includes loan interest and fees and asks the equity to earn its return over the hold, so it is usually the tighter of the two.
They are the Base case of an illustrative three-case pro forma: 50 units of 960 sf, $310/sf hard cost, $575/sf sale price, 70% loan-to-cost at 8.5%, and a 28-month hold. They are not market data for your city. Replace them with your own quotes, comps and term sheet.
No. It is a screening tool. It does not know your zoning, your market or your lender. Confirm every assumption for your site with qualified professionals before you make an offer.
General information, not financial, legal or investment advice.
The land value only holds if the program fits. Get the zoning, lot size, setbacks and height for the address, with sources.
