23rd Feb 2022

There are a couple of things you should not outsource in life: Number one is your health, and the other is your wealth.

This does not mean I’m advocating you do everything yourself; rather you control the reins, but let someone else do the running. In other words, you delegate but not abdicate.

The purpose of this article is to focus on the latter, wealth in a particular class of tangible asset, namely property.

This is a real tangible asset, therefore it will never just disappear overnight. Often a ‘crash’ is when it drops for example to 20%.  But actually, a property by definition cannot crash.  Furthermore, the London property market is very mature.  What keeps it buoyant over medium to long term is supply is constrained but the demand comes from over 63 countries from around the world.

London is a 500 year old market, which has various segments of demand, both from purchasing and renting. Therefore, if one goes down in demand another segment will fill the space.

Property in essence is quite simple. There are only two ways to make money from it, one is from the income it generates and the other is from capital gains. There is no third way.  This is a useful place to start your investment. From this basis.

If you wish to substitute your income, your focus should be developing layers of income. If you don’t, then capital growth is the only other option.  The larger returns from property always tend to come from capital gains.

The other point to concentrate on is what the net return will be. An example may drive home this point more strongly.  If you’re a high income earner, and do not necessarily need further income, you may not wish to focus on an investment which produces a high yield such as an HMO if the asset is in your personal name.  You would probably be better off purchasing an investment in a limited company, with the aim of selling the shares of this investment at a later date to an incoming buyer, rather than the underlying investment.

The point of looking at one’s net return is of paramount importance. It is the net return which gives you your spending money not the gross.

Sow & Reap act as a buyer’s agent. We have been acting for investors for nearly two decades. Traditionally we have concentrated on central London, but as returns have increased elsewhere we have adapted accordingly.

In our experience the first step is to define what type of investment suits you. Then we go and pursue, and try and find the deal which fits. We can act for you in one of two ways. We either find the deal and charge a fee, or we handle the deal from beginning to end and take a piece of the cake. You get to keep the cherry.

Suresh Vagjiani

Suresh Vagjiani
Suresh Vagjiani
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