Why the payment schedule matters more than the price: 40% against 80% halves the return

Looking through a developer's materials, attention goes to the renders, the location and the final price. For an investor a different line should come first: the payment schedule.

The arithmetic on a simple example

Say the property appreciates 10% during construction. Everything then turns on how much you have already paid in.

• 40% paid: a 10% gain on the full price produces 25% on the money you have deployed.
• 80% paid: the same gain produces 12.5%.

Same property, same market, twice the difference — purely because of the payment structure.

What follows

If the aim is resale before handover, a soft payment plan matters more than a discount. A 40/60 or 50/50 structure leaves the capital with you; 80/20 puts it into the construction.

Hence a non-obvious conclusion: the largest developers with the most reliable projects often hold hard schedules — 70/30 and 80/20. For an owner-occupier that is no problem; for an investor planning a resale it is a real constraint on flexibility. Reliability and return on deployed capital pull in different directions here.

How to calculate it properly

• Add up everything you pay before the keys, including the registration fee.
• Divide the expected gain by that sum, not by the price of the property.
• Check whether assignment is permitted and from what point: with some developers the window closes months before handover.
• Allow for the cost of exit: the assignment fee, the buyer's registration fee, commission.

And keep the other side in view: a soft payment plan usually means a higher price per foot. Projects have to be compared on both parameters at once, never on one.