The Contract Clause That Could Wipe Out Your Profit (Ep - 262)

Escalation clauses can look like a simple way to keep a builder happy or manage uncertainty. Get one wrong and it can quietly eat your development profit. In episode 262, Bob and Hilary break down escalation clauses from a developer's point of view: what they actually are, where you will bump into them (usually the building contract), and why builders push for them when material and labour prices feel unpredictable. Bob shares how he has used escalation on large, staged land purchases, why they rarely suit smaller old-house-on-land projects, and how you can isolate an escalation to specific items like steel and concrete instead of the whole contract. You will also hear why lenders and valuers love a lump sum fixed price and time contract, and the one feasibility mistake that catches people out: escalating your costs but forgetting to escalate your sale prices. As Bob puts it, a 5% lift on your build is only 5% of 40%, but 5% on your sale price is 5% of 100%. Plus Bob's tip of the week on procrastination, and why sitting on the fence is the most painful decision of all. Take the fear out of the fine print. Have a listen, and enjoy.  Keen to attend out Masterclass on August 15th? Click here to register: https://link.propertymastermind.com.au/propertymastermind-profit-with-property-development-masterclassSee omnystudio.com/listener for privacy information.