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Residual land value calculator
Calculate the maximum amount you can pay for a site and still hit your target profit on cost. The site-screening number used by acquisitions teams every day.
Formula
RLV = Net realisation − (TDC excl. land) − Target profit
Target profit is calculated on (TDC excl. land + RLV) — solve iteratively.
Inputs
Net realisation
Expected sales revenue after selling costs and GST.
Non-land TDC
All costs except land — construction, fees, contributions, finance, contingency, plus an allowance for stamp duty if including it inside RLV.
Target profit on cost
The hurdle you're solving against — typically 18–22%.
Output
RLV ($)
The maximum land price (often inclusive of stamp duty and acquisition costs) that lets the project clear your hurdle.
Worked example
Net realisation $26.2M, non-land TDC $16.9M, target profit on cost 20%.
Solve: ($26.2M − $16.9M − RLV) / ($16.9M + RLV) = 20% → RLV ≈ $5.45M.
If the asking price is $7.2M, the deal doesn't clear at a 20% profit on cost.
Questions
Frequently asked
Is RLV the same as the offer price?
RLV is the ceiling, not the offer. Most teams offer 5–15% below RLV to leave room for the unexpected.
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