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Residual Land Value Calculator

Work out residual land value instantly with clear inputs, formula shown and shareable results.

About Residual Land Value Calculator

Residual valuation works backwards: what remains for land after construction, fees, finance and the developer's required profit have been taken out of gross development value. Because profit is expressed on total cost including land, the calculation divides GDV by one plus the profit rate before deducting the non-land costs.

Formula

Residual land value

Land = GDV / (1 + profit on cost) - construction x (1 + fees and finance)

Worked example

With the default values below, Residual Land Value Calculator returns Residual land value of $12,916,666.67. Change any input above and every figure here is recalculated in your browser.

Inputs used

Gross development valueminimum 0.01
50,000,000
Construction costminimum 0
25,000,000
Target profit on costaccepts 0–60 %
20 %
Fees and finance on build costaccepts 0–50 %
15 %

Results

Residual land value
$12,916,666.67
Development cost excluding land
$28,750,000.00
Target profit
$8,333,333.33
Land as share of GDV
25.83% %

Step by step

  1. 1Values used
  2. 2Residual land value
  3. 3Residual land value= 12,916,666.67
  4. 4Development cost excluding land= 28,750,000.00
  5. 5Target profit= 8,333,333.33
  6. 6Land as share of GDV= 25.83 %

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax or compounding frequency into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How is the Residual Land Value figure worked out?

Land = GDV / (1 + profit on cost) - construction x (1 + fees and finance). Residual valuation works backwards: what remains for land after construction, fees, finance and the developer's required profit have been taken out of gross development value.

Why is residual value so volatile?

It is the difference between two large numbers. A five percent fall in GDV or rise in build cost can wipe out a quarter of the land value, which is why land is the riskiest part of a development.

What values do I need to enter?

This calculator takes 4 inputs: Gross development value, Construction cost, Target profit on cost, Fees and finance on build cost. The pre-filled defaults are a realistic worked example — replace them with your own site or project figures.

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