Pre-Construction vs. Resale Cash Flow Risk

Model the exact intersection of development fees versus immediate interest carry over 4 years.

Risk Modeler (4-Year Carry)

Pre-Construction vs. Resale Cash Flow Risk

Pre-Construction Asset

Purchase Price ($)

Years until Final Closing

Estimated Development Levies ($)

Immediate Resale Asset

Purchase Price ($)

Current Mortgage Rate (%)

The Phantom Cost Comparison

Pre-Con Sunk Costs at Closing

Hidden Development Fees$35,000

Adjusted Basis$835,000

Resale Capital Burn (4 Years)

Interest Carry (Pure Loss)$123,200

Cash Adjusted Basis$823,200

Strategy: You are fundamentally trading the interest rate carry risk of Resale against the arbitrary development charge fees and closing delay risks of Pre-Construction.

The Pre-Construction Trap

Here is the problem with 2026 pre-construction: developers are pricing in expected appreciation before the shovel hits the dirt. You are buying tomorrow's prices today.

However, when standard mortgage rates are holding firm at 5.5%, grabbing a cheaper resale condo means burning nearly $30,000 entirely in interest payments per year.