i'm about to purchase my first investment unit, i have done enough homework that it tells me it's a good deal. i just cant stop thinking about "what if something goes wrong", i started to get worry what if nobody want to rent my unit (although i have already tried several ways to check the demand of that condo, it's high, and actually the unit is tenanted now anyway). i cant stop thinking if really nobody rent my unit, i really have to eat grass everyday to cover the installment. well u might tell me dont bite more than i can chew...but but no risk no gain right? can you share with me how were u feeling when u first bought ur first investment unit? most importantly how did u overcome the fear?


This post has been edited by vdfoo: Dec 26 2009, 01:13 AM

Seems like you have done a lot of research before purchasing it.
You have done what has to be done, stop worrying.

However, if you have to eat grass if no one rents your unit, it is not wise.
It is not wrong to say you have bitten off too much you can chew.
Start worrying if Bank Negara decides to raise the BLR, then you have to eat sand.

In my point of view you should not invest in unit since you are on a margin here. There are other investment vehicle you can explore. Eating grass everyday will destroy you mentally and emotionally.
On how to overcome you emotions. I suggest you draw a flowchart of what will might and can happen. List hopefully all the possibility and you will sleep better at night.

This post has been edited by whtrader: Dec 26 2009, 01:37 AM

lolx....sorry, i mean eating grass may sound a bit "kua cheong"...i still have my reserved fund for installment for close to 1 year (assuming BLR doesnt go up)...what i really worry is because my "reserved fund" is still in an investment company - Profitable Group, their HQ is in Dubai, not sure if the recent Dubai World crisis would affect...ready to cash out my investment with them in April to serve as my reserved fund...worry... worry...

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Added on December 26, 2009, 1:40 amthanks whtrader for the advice

This post has been edited by vdfoo: Dec 26 2009, 01:57 AM

You need to work out what is the worst case scenario and have a back up plan. Example if your projected rental is RM1000 but after getting the unit you cannot get a tenant at the price then can you rent for RM800? or RM600? If you rent for RM600, are you able to top up the difference to pay your loan and other cost?

Not knowing what the risk are and how bad it can become will make you worry unnecessarily about the "unknown". Once you've identified the risk and know what you may have to do, then it should become more manageable.

thanks roy

If you've planned for the worst while hoping for the best; and still have sleepless nights over your planned investment, you are not ready for the investment.

in chinese saying... no big head, dun wear big hat

correct

TS, make sure u have sufficient cash to cover at least 12 months of rental....u have to invest with a peace in mind

Always calculate your rental in 70%.

For example, if you are found out the market rental is RM1,000 per month, thus one year is RM 12,000.

You can only project RM 12,000 x 70% of the profit (which is RM 8,400), as there will be some empty months when the tenants move out/in and etc.

If with 70% your income rental is sufficient to cover everything, there is nothing much that you should worry about.

thanks edyek, but i'm afraid not too much of residential property can fetch that type of rental...especially in the beginning first few years of just purchased the property. are you getting the type of rental you are suggesting?

Yes, but not in new property. I gaining average 20% per annum from my secondary properties rental. I do not favour in new properties as new properties only yields 6-8% (the most I've seen) per annum.

If you calculate your property with 70% occupancy rate, and you cannot cover your loan payment, do prepare some cash reserve. That is the cons of buying new property as you can only hope for property appreciation (rarely you can get positive cashflow, unless you got yourself a good location with good rental like pai did with maytower.).

u shouldnt be investing at all...since u r so "scared"

agreed, or you can choose invest in Property share..like SP,Sunrise, malton, e&o..

otherwise go buy REITS or panadol
for any decision, if it makes u cannot sleep well at night, better dun go ahead
no pain no gain, with pain, comes experience
best is to put in fixed deposit, sure can sleep

Just invest and accept the risk that you are going to endure otherwise better keep the cash in bank or do business. Everything in life is a gamble,nothing is certain forever.

This post has been edited by Tohsan: Dec 29 2009, 10:00 AM

It is normal to be "scared". This is his 1st investment. TS, you will get better if you invest gradually and learn as much as you can through out the process of investing.

If the % margin is good enough, then there is nothing to worry about. Good luck.