Corporate Housing

Cost Factors In Corporate Housing Development

The development of new homes is determined by different factors. Cost on everything is the top reason why more houses will or will not be built. First thing a developer will look at is the availability of homes on the market in a given area. Also consideration is given to the price of the homes or the value, and the availability of people to build, equipment, tools, and materials. Here is a breakdown of costs for building or developing corporate housing:

• 10 % for acquisition costs
• 15% for administrative costs
• 3% for finance costs
• 26% for labor
• 4% for marketing
• 31% for materials
• 11% for site improvement

Multi-unit development (apartments, condos, etc) breakdown of costs for development:

• 7% for acquisition costs
• 17% for administrative costs
• 4% for finance costs
• 27% for labor
• 5% for marketing
• 33% for materials
• 8% for site improvement
• 3% for “public” subdivision (this can vary depending on the authority
• 2% for building codes (varies)

Normally in subdivisions the market value will go up simply because new structures are more valuable than older existing ones. Neighborhoods where renovators are coming in and improving property will increase the value of the homes in the area. But only if there are several that are being updated. It wouldn’t raise the value if only one were. In fact if it’s just one, and it’s valued over the neighboring area you will have problems selling it. Always take what is going on with other existing buildings when planning to renovate. Unless it’s an area where there’s a huge housing demand (places in California experience this and places like New York City, where the short term housing demand is huge.)