The risk that a subscriber pays off the entire payment on the house before the projected leasehold denying the investor the expected rental cash flow over the project time period. To mitigate this risk, the sponsors will hold at least 15% of investment in any unit built or acquired on the scheme, this will absorb the prepayment risk on the scheme.
A reserve fund equivalent to projected one year rental payment for any project will be created at inception. This will absorb cash flow shortfalls on the scheme and during the leasehold period.
Interest Rate Risk
When prevailing interest rate rises above the fixed rental repayment. While, the risk may be that you will not be able to earn at the prevailing interest, this does not affect investor cash flow in anyway.