Faith Land Development ROI
Rough feasibility estimate for developing housing on religious land. See total project cost, potential rental income, net operating income, and estimated break-even.
DEVELOPMENT ROI ESTIMATOR
ESTIMATED CAP RATE / RETURN
—
TOTAL DEVELOPMENT COST
—
ANNUAL NET OPERATING INCOME
—
ANNUAL RENTAL INCOME
—
BREAK-EVEN (YEARS)
—
Estimates only — assumes no debt financing, no tax credits, and no grants. Actual returns depend on subsidy stack, construction timeline, and market conditions.
Worked example
A church donates land (valued at $0) and develops 20 affordable units at $350k each, renting at $1,800/unit with 5% vacancy and 35% operating expenses:
- Total development cost
- $7,000,000
- Annual gross rental income
- $410,400
- Annual operating expenses (35%)
- $143,640
- Net operating income
- $266,760/year
- Cap rate / cash-on-cash return
- 3.8%
- Break-even (simple payback)
- 26.2 years
Sensitivity: Break-even by rent and construction cost
| Rent / Build Cost | $250k/unit | $350k/unit | $450k/unit |
|---|---|---|---|
| $1,400/mo | 21.4 yrs | 30.0 yrs | 38.6 yrs |
| $1,800/mo | 16.7 yrs | 23.3 yrs | 30.0 yrs |
| $2,200/mo | 13.6 yrs | 19.1 yrs | 24.5 yrs |
Assumes 20 units, 5% vacancy, 35% operating expenses, donated land. Break-even = total cost ÷ NOI.
How it works
This is a simplified pro forma for faith-land housing. It does not include Low Income Housing Tax Credits (LIHTC), tax-exempt bonds, or operating subsidies — which typically make faith-land housing feasible in practice.
NOI = (Units × Monthly Rent × 12 × (1 − Vacancy)) × (1 − Operating Expense %)
Cap Rate = NOI ÷ Total Development Cost
Break-Even = Total Cost ÷ NOI