Financing costs

Financing costs are the interest charges incurred when a subdivision is funded by borrowed money. The costs of financing is dependant on the amount borrowed, the interest rates charged, and the length of time the money is borrowed for.

If the money is not borrowed but funded from some form of cash reserves, then the loss of interest that could have been obtained from the cash reserves should also be factored into the financial success of the subdivision.

These costs often determine the financial success of the subdivision, and therefore the length of time the money is borrowed (which will be a function of how quickly sections can sell) can be critically important. This is where using a company like Birch Surveyors Ltd with audited quality systems can assist.