1. Start with planning reality
Before numbers, confirm what the planning scheme and local approval pattern support: zone, overlays, minimum lot size, height, density, frontage, access and neighbourhood precedent.
2. Test the yield
Work through realistic scenarios: subdivision lots, dual occupancy, townhouses, apartments, retail or billboard use. Avoid assuming maximum theoretical density if the area has no precedent.
3. Research end values
Gross realisation must come from genuine market evidence, not optimism. Use comparable completed product where possible.
4. Solve residual land value
Subtract build costs, soft costs, finance, holding, selling, contingency and required margin from gross realisation. The leftover is what the land can support.
5. Decide GO, GO IF or NO-GO
A good deal clears margin with planning support. A marginal deal may only work subject to DA, renegotiation or better researched end values.