rule of five

Definition

A rule of thumb subdividers use to estimate subdivision costs. In general, 20 of the final total sales price will be allocated to land acquisition, 20 percent of the total sales price to improvement costs like grading, road installation, 20 percent to miscellaneous costs like interest, carrying charges, and unsold lots, and 40 percent of administrative costs, sales commissions, and profits.
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Rule of 78 rulebook