pankaj.punk19

Hey Experts Please contribute with your reviews on Builder's Costing /Profits for an Individual Flat in Noida Sector 74 to 78
As per My knowledge details are as below

Land Cost = 900 psf
Construction cost including basement ,club ,landscaping,underhand= 1200 psf
Administrative Expenses including Advertisements =250 psf
Income tax on profit 33 % = 100 psf

PROFIT =350 PSF

Selling Price in Sec74 to 78 =2800 psf (all inclusive UNDER FLEXI PLAN)

Please correct me experts if im mistaken

pankaj.punk19

Lets take 25 acres as an assumtion for a particular project

The sellable area would 40 lac sq. ft in that project

40,00,000/- multiply by 350 profit

NET PROFIT =140 CRORES

AND TO EARN THIS BUILDER WILL REQUIRE BARE MINIMUM 4 YEARS

YEARLY PROFIT =35 CRORES

VKinNCR

25 acre land will have permitted built-up area of about 30 lakh sft with FAR 2.75.

The salebale area for builder (minimum 125% of the built-up area taking in to account average 25% loading) will be about 36 lakh sft.

Pls remember that many parts of built-up area like passages, staircases, balconies etc. are outside of permitted FAR area.

So the profit for the builder will be much higher that what you have calculated.

Another aspect to be considered is the investment of the builder. In NCR the builder makes investment only for 10% of land cost (rest paid to authority in 10 years). the project construction is financed by the deposits from buyers. Builder gets about Rs. 1100 psf (40% of selling price of Rs. 2800) from buyers even before laying a brick. Thus, technically the investment of the builder in a project is only 10% of land cost i.e. about Rs. 100 psf.

Assuming your calculations to be right, profit of Rs. 350 psf on investment of Rs. 100 psf is robbery or lottery?

Experts may kindly comment please.......

vikky55

Factor in the money laundering costs also !

pankaj.punk19

Nice one,
I think its not lotter neither robbery

Its about taking that much risk
and to subsequently deliver that area

Most biggest risk under builders belt is

1. If tomorrow the price of raw material /finished goods increases who is responsible for it????
Its builder

The price for allottee is fixed and firm

If tomorrow Labour wages increase or increase in price of machines/plant or increase in salary of employees

These things will definitely effect the builders forecasted profits/cost

Builders undertakes a very big risk which is unexpected under my senses

If anything builder commits wrong ,it losses its impecable reputation in market and cannot sale further projects with wrong doing in one particular project

So its neither robbery or lottery

Its risk taking capacity .....

Risk leads to good profits with lot of tension,pressure ,objectives , goals ,plans



2.

pankaj.punk19

But undoubtly Builder earns handsome profits

But it realy requires lot of planning
For me its quite important to deliver and implement plans rather than just selling