People may ask what has this to do with SF
Well SF are trying to pull the wool over peoples eyes when it comes to housing and their fairytale solutions... that are being repeated here.
I think it's clear enough.
"Payment" by the LA to a developer will factor in the "profit" charged by a developer.
Now how one can say with a straight face that there is no "profit" in this scenario beggars belief but yes, some will try and spin that yarn. Developers wont work for free.
Put simply, the mantra "it's cheaper to build than buy" is just that. There is no guarantee that will be the case, as a developer will make a margin in both cases.
Yes, they are worth a look, but they got the land for (almost) free and as far as I know, they were also allowed to do things tax/vat free hence the lower prices.
Are you posting as a Moderator, Administrator or a normal poster?
And on who’s behalf are you interjecting here?
I think it is very clear what a profit is,and how a business can generate a profit, other posters don’t seem to understand this.
Just curious why you have chosen to post this explanation now, and if it is a Moderator instruction, or just your personal opinion.
No they get paid. Payment is not profit. You don't know what profit means.
If I pay 200,000 for a house but it cost 300,000 to build, then the developer loses 100k
If I pay 400,000 for a house but it cost 300,000 to build, then the developer makes 100k profit.
Payment is what one pays for a product or service, the profit is what the other side of the transaction makes after costs and expenses.
The fact that you say, 'Payment is not Profit' is a clear indication that you have zero clue what you are talking about, hence the posts on here the past day or so with everyone scratching their head thinking, 'Is this guy for real?'
You are on your own here mate!
Let me just interject here
A business is in business to make a profit. If they build something for a set price they factor a profit into that. Now some businesses offer "loss leaders", but that's really irrelevant to a construction business
The profit is derived very simply, as has been set out by a number of posters already. The profit is the price charged (the "payment" referred to by Brucie), less the costs incurred. Those costs will typically be labour, construction costs etc. No business is guaranteed to make a profit, but no business goes out of it's way not to make a loss (even in the case of those loss leaders, the expectation is they will draw in more profitable business to result in an overall profit).
The business does of course pay tax on any profit they do make under relevant tax rules.
Where did I show that? They hire the expertise they don't have.
Well I wouldn't pay anything near the market rate. Mind on one off builds its a different ball game.
You think a scheme where someone took advantage of an opportunity of purchasing a brand new A rated home for 170K and sold it on for 300k after 3 years and pocketed 70k profit is a good?
You are right there is something worth looking at but not as a model to roll out.
The councils just don't have the expertise to get value for money when building houses, you have proven it yourself by pointing out previous bad deals, the whole thing becomes a gravy train for everyone involved. When a developer gets it wrong, they are the ones losing money
How does that help unless I have a line item titled "profit" ?🤣
Sorry, from a chap who supports buying, leasing and renting over building i hope you've more than one magic money tree. We can't keep taking from tax payers to give tax payers a dig out. Its practically a ponzi scheme.
Yes. I'd need a costed quote :)
Not for profits like O Cualann seem to be able to project manage housing developments efficiently and at a very good cost (like this development of 49 houses in Poppintree Dublin). https://www.ocualann.ie/new-page-10
I think that was the development where the house that cost €170K to build and buy, sold for over €300K about a year ago. O Cualann paid Dublin City Council €1000 per site (instead of €30K). If the house is sold on with 10 years (which happened in this case), O Cualann / DCC have a clawback (think they got back €60K) from the sale of the house. O Cualann said that they had tried to arrange that the houses would be sold back to them if people were moving on, but people could not get mortgages with that as a condition so this is what they came up with.
Just on the the failure of Gov. to oversee major projects. The county councils have much better experience of managing building of projects like this - i.e., they have hands on engineers, architects and planners dealing with projects whereas the Gov. Depts are generally pen pushers with no practical experience.
Worth looking at how O Cualann do it.
A lot of the mica affected houses in Donegal cost more to rebuild than they'll be worth on the open market when finished.
But I guess I can give the SF magic money tree a little bit of a wiggle and a shake to solve all my problems :)
You pay me 400,000 to build a house for you, all that money is mine to cover my costs and more.
House is only worth 300,000 on the open market, you've lost 100,000, I have that 400,000 to do with as I please.
Nobody has showed me why buying is cheaper than building. Why would anyone bother their arse building, they'd make no money by that logic.
I posted what profit is. I suggest you read it.
You don’t seem to actually understand what profit means. Well done on proving to everyone just how idiotic your posts are 😂.
To recap;
If you build for 300,000 all in and sell for 400,000, that's 100,000 profit.
If you build for 300,000 all in and sell for 250, 000, that's a 50,000 loss.
That's business.
If you get paid to build a house, that costs 300,000 all in, you get paid and the client gets a house.
If the client buys at market they could end up paying 400,000 for the same house.
It's been fun times but I'm just repeating myself.
How can you make a loss but can't make a profit?
Because some people like to do paid work with no risk of loss. Also they don't need pay out any money, just work and get paid. Some companies do both. What sane builder will turn down paid work?
As I said, I listed numerous websites linking to companies who will build you a house if you pay them a fee.
Why would any sane builder in the world build houses for the Council at a cost price of 300,000 when they can build them for 300,000 and sell them for 400,000. You would want to be certifiably insane to only charge the Council 300,000 for your hard work.
Even Mick Wallace, the great socialist developer, wasn't stupid enough to do that.
Okay. No problem.
I actually do appreciate that none of that makes sense to you.
I did think that it would end up that way.
It tells me and other posters all we need to know.
Yeah, none of that makes any sense.
If a company quote you a price you pay that price. If they can't do their sums that's on them, unless you have a contract which allows for certain eventualities.
To address your last question first: if I co-own a company, and the company pays me a hundred euros an hour, and you pay my company one thousand euros to dig a hole, I dig the hole in an hour. The total costs, including my salary of a hundred euros an hour come to seven hundred euros. What do you call the difference between the cost of seven hundred and the payment of one thousand euros?
You made a payment of one thousand euros to a company to dig a hole, it cost the company a total of seven hundred to dig the hole. What do you call the three hundred euro?
Nobody. You lose 50,000. Thats business. Not every business venture makes a profit. Maybe get a job building for others.
Lots of developers went out of business after the Celtic tiger bubble burst.
This is still wrong.
If I built a house and it cost 300,000 all in, with myself paid for my time, and I sell it for 250,000, who covers the 50,000?
What do you call the money people make on the sale of a property they built, having paid the taxes, materials, land, construction crew and themselves?
Do you not see if I built a house and it cost 300,000 all in, with myself paid for my time. And I sold it for 400,000, the 100,000 would be the profit. So I'd be paid for my work and make 100,000 profit.
Now if I was paid by somebody and they covered all the costs and all in the build cost 300,000. They'd have a house for 300,000 instead of buying it for 400,000. Thats a saving of 100,000 in this scenario.
No I haven't. You are confusing payment with profit. You are paid for your time and work. Thats payment not profit. Where is the profit for you in me paying you to dig a hole?
You have now changed your mind on what profit is. Can you please post your new definition of profit.
Sorry, that is just wrong, you're completely misunderstanding this.
And even if you don't want to mark that payment as profit, for whatever reason, you're still going to be charged that amount which will drive up the cost of the building.
So a "non-profit" house could end up costing more to build than you could buy a house that pays out "profit" to a developer.
Which is highly likely in a scenario where the council are put in charge of the tendering process, they have no reason to be efficient.
re: leases, if I can lease 10,000 apartments or buy 500 apartments with my budget, which should I do if I have 15,000 people waiting for accommodation?
Thats inaccurate. See above.
They would pay themselves a set fee or wage for the work they do and include that in the fee, payment required. Thats not profit. Its being in business and paying yourself for your work.
Costs can indeed change and the contractor would have such eventualities worked in to the contract. If materials go up etc. Weather delays and so on.
