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Profit on cost calculator
Calculate profit on cost for a residential development — the headline ratio that decides whether a deal clears IC. Formula, inputs, worked example.
Formula
Profit on cost = (Net realisation − TDC) / TDC
Net realisation = GRV minus selling costs and GST.
Inputs
Net realisation
GRV after selling costs (1.5–2.5%) and GST.
Total development cost
All-in cost — land, construction, fees, contributions, finance, contingency.
Output
Profit on cost (%)
The headline residential feasibility ratio. Most build-to-sell apartments need 18–22% to clear IC.
Worked example
Net realisation $26.2M, TDC $24.1M.
Profit on cost = ($26,200,000 − $24,113,000) / $24,113,000 = 8.7%.
Below the typical 18–22% hurdle for build-to-sell apartments. The scheme either needs higher revenue or lower cost.
Questions
Frequently asked
What's the typical profit on cost hurdle?
18–22% for boutique build-to-sell apartments in Australia. Higher for more capital-intensive or longer-program projects.
Should I use net realisation or GRV?
Net realisation. GRV inflates the numerator with revenue you'll never see (selling costs and GST go to others).
Run this calculation in your real feasibility.
No spreadsheets. No setup. Fourteen-day free trial, no credit card.