About three years before this video, when everyone seemed to be making money in Johor Bahru, Sean booked a semi-D there. A year after vacant possession he was still holding it and paying the instalments, and young viewers were asking him whether to stretch for property beyond their means.
What went wrong in Sean's worst deal, and how can a buyer avoid the same mistakes?
“not all real estate deals you make money”
Sean names four mistakes: buying on emotion when the numbers didn't work, overcommitting until instalments took about 94% to 95% of his income, assuming the developer's name didn't matter, and letting the bad deal weigh on him instead of looking for solutions.
Why
Emotion over figures
The design and renderings were beautiful and the market was hot, so he bought although his calculations didn't make sense.
Overcommitting
With instalments taking about 94% to 95% of his income, he was financially crippled for a time. That only works if you can live on very little.
The developer matters
Established developers tend to stand behind their projects and their after-sales service; the one he bought from did not serve him well after the purchase.
Dwelling on it doesn't help
He let the mistake drag on him for a while before realising the only way out is to look for solutions rather than at the problem.
What to do
- Run the numbers, and walk away if they don't work, however much you like the design.
- Keep the instalment well within your income, with room to live.
- Check the developer's track record and after-sales service.
- Calculate the downside before buying in a hot market.
- If a deal goes wrong, focus on solutions, such as selling or renting, rather than the loss.
Editorial Note: Summarised from Sean Tan's full episode. The quoted answer is in his own words; the rest is our paraphrase. Figures reflect the recording date, so check current rates and rules before acting on them.
Worst Mistake in Real Estate
Sources & Verification Data
Summarised from Sean's English captions for this October 2017 video about a semi-D he bought in Johor Bahru. The quoted line is verbatim; everything else is paraphrased.
