Opportunity Cost in Property Investment

A Malay Pantun was written as:
     Berakit-rakit ke hulu,
     Berenang-renang ke tepian,
     Bersakit-sakit dahulu,
     Bersenang-senang kemudian.

How much are we willing to endure hardship so that we can have a bountiful life in the future? The Pantun teach us to work hard, have a frugal life as long as possible, always increase saving and investment in early life. If these are done properly and wisely, we can have a very comfortable life in the future.

In general, Property investment is a slow and steady game. Although some people who are impatient and desperate may employ a more aggressive strategy and tactics. Most of them can easily get caught in any economy turn down or any unexpected event. Some of them may have difficulty to expand their investment because their aggressive and risky style were checked by government restrictions.

Overall, property investment is a long term investment. You cannot expect immediate return within one or two months like supplying materials to customers. Although I have seen several cases where property investment can make quick gains, I do not advise the method to new comers unless you are very sure with your capabilities. But, it takes years of experience, network and learning to get once in a while quick and bountiful investment returns.

Thus, it is important to employ a conservative investment strategy. But at the same time we should also calculate the worst and best scenarios. The worst scenario is to ensure our investment is really protected if the situation is getting worst. The best scenario is to ensure we can get maximum return at the shortest time possible. These calculations are important to ensure we know how long should we hold our investment and how fast we should let go our investment. These calculation is also to ensure our sentiment does not affect our logical judgement.

At the micro level, opportunity cost always arise in our emotional calculation especially when there are too many good property investment opportunity! Which townships to choose, which hot area to choose: KL vs JB, which road to pick, which unit to select?!

This is when you need to become a Vulcan when making the consideration. A Vulcan is emotionless. Logic dictate all his decisions. Yet, we are human. It is normal to be overwhelmed with fantastic property we encountered with. However, not all property types, development and area are suitable for all property investors. We need to be alert with our own weaknesses to ensure not to pick a wrong investment.

A third party evaluator is essential if your feelings are mixed with your logical.thinking. It is the time to engage a mentor to assist your evaluation. The more I invest in property the.more I see various possibility of investment. But, I always make the decision based on the timing. Timing is everything!