In The Comfort Zone

Last week I was called to see a Gujarati gentlemen living in Wembley. As with many first generation Gujarati immigrants he had worked hard and saved hard to ensure all his mortgage has been paid up, in addition to a small property in Sudbury fully paid up. He was still working as a builder and he had been following our articles for many years, he even attended our seminar in East London. In short he was keen to invest in our proposition.

He was convinced to invest in property and saw the benefit of investing in Central London. As his savings where modest I mentioned the way forward is to refinance his existing BTL property which was paid for in cash and invest this lump sum.

Currently he did not require a monthly income, as his salary was enough to cover his minimal outgo. Therefore the way forward was to invest for capital growth. This means in short buying and selling. The only way this can achieved be for this particular client is by grouping together with others who have small amounts of money. What one individual cannot do alone, can be achieved by the group.


In Central London the ceiling on prices is always rising. A ceiling is the maximum price a property will sell for in a location. In Central London due to the demand this ceiling is always increasing.


The demand for this location comes from over 60 countries according to the recent Knight Frank report. This is very different to the level of demand in the outer regions of London where the demand is generated by one or two predominating ethnicities.

Investing in property especially in the current situation is a no brainier . The issue is simple, when Quantitative Easing takes place anything real goes up in value. Easy to understand if we imagine a little country say with 10 houses, if the money in circulation is increased then you will need more money paper to buy these houses. And the paper you have will be worth less and less the more paper is being printed. This why property will be destined to rise in the long term simply by virtue of it being a real tangible asset irrespective of what is going on in the short term.

Of course in the above example we have kept this very simple and ignored many variables which exist in the real world, just to drive the point home.

Given property in principle is a great asset and will always go up in the long term where should you invest for the maximum returns?

If you reduce the time period to shorter and shorter, to say monthly, and analyse where the prices are going up almost month to month you will arrive in Central London, in the UK at least.

So going back to this gentleman in Wembley, after a very enthusiastic meeting where he saw the logic of the above and agreed this is where his hard earned money should be invested, the next day he called back with a negative answer. Why? The reason cited was that the family did not agree with the decision to invest. Not the first time I have heard this reason for not investing, and I’m sure it won’t be the last. The question is, if the decision was not his to make what was the purpose of the meeting?

When analysed this can be reduced to throwing the decision making ball into another court. We all do this to some degree or another in different areas of our lives. Society on the whole does this from the areas of finance to even religion.

We give our decision making faculty to an individual or an institution, this way we cannot be blamed if things go wrong, so we quickly give our power away. This way we cannot be held liable at all for whatever happens. Thus we become victims of circumstance rather than controllers of our own destinies.

In this situation the ball was quickly caste across to someone else so that the individual cannot be blamed for not even being able to make the decision of saying ‘no’.


The bottom line is indecision, the inability to make a decision. The Latin root of the word decision means “to cut off from all alternatives”. This is what you do when you make a decision.


Don’t leave yourself a life-raft so that you can give up later. A famous example of this kind of decision is Hernan Cortez, in his conquest of Mexico. When the Conquistadors first arrived in Mexico, Cortez literally DID burn their boats. There was no way back home. They could literally only go forward and conquer.

We deal with a wide variety of clients and one of the attributes the wealthy have from those who live more modestly is that they make decisions and execute them. They take their destiny in their own hands. By developing this attribute alone you can change your finances. This does not mean you take stupid decisions. But do not avoid making decisions.

Note this does not mean every decision is going to be correct, but realise the importance of the power of making them. In my experience when it comes to investing in Central London more people lose money by not making a decision than by making the wrong decision. An example we use in the seminar is a real one: We offered a property in November 2011 to a signed up client, a pharmacist, he had the money in the bank and had shown he was interested in investing in property. The property was a three bedroom duplex, in Burlington Close in Maida Vale W9 for £325,000. The client was clearly interested and had funds, but did not commit to making a decision, the story here was he was going on holiday and therefore was unable to decide. Even though we only need two bits of paper signed for us to execute this transaction. The property was purchased by someone else, blind, as time was running out. It was valued in April 2012 for £425,000, the works done only amounted to a few thousand pounds.

Money kept in a bank account earning a paltry rate of interest means it does not even keep up with the levels of inflation. So actually the funds are not even stagnant, they are degenerating. This is very often the actual scenario. By taking a decision you have a chance to stop this and start earning instead of losing. By not taking a decision inevitably your cash is decreasing.


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Sow & Reap

A Property Investment Company



!Tips of the Week

When renovating a Buy To Let property always ask the question: How much more will I get in terms of rent for doing this work? Many investors get carried away with developing properties as if they were their own homes.

When investing, most of the money will be invested by the bank not you, remember they will always do a valuation to check their investment is secure, this is an additional check for you, the investor.



Suresh Vagjiani
Suresh Vagjiani
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