Subdivision density and financial returns




Ward, James Royce

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In the following chapters, the development of a specific tract of land will be investigated, with particular attention being paid to financial returns to the developer. Initially, the general area and economy will be discussed, with amplification of important factors. Following will be an analysis of residential growth, both historical and projected, with information sufficient to project market demand for residential lots in the subject area. Next will be a discussion of a particular parcel of land, one suited to residential development. Three different development plans will be considered along with costs and returns for each. An analysis of the returns will be made by several different financial techniques, and conclusions drawn. It is the intention of the author to provide a working guide for use by persons considering a development such that different alternatives may be explored in response to market demand for residential lots. This report is further intended to cover the major areas of concern to the developer or developer/builder. It is not practical to cover every conceivable aspect of development, but it is hoped that the specific questions or problems encountered by the user may be fitted to this analytical process where appropriate. Although this report focuses on the Austin, Texas residential real estate market, the same analytical techniques and sources of information could be used with respect to the residential market of interest to the user. As with many studies of this type, those which are somewhat of an imprecise science, the information used is considered to be pertinent to the questions at hand, and the sources of that information considered to be reliable. In a real world situation of unknown, and unforseen events it is necessary to make such judgement calls in planning any business endeavor