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FINANCIAL VOICE

Asian Voice - Saturday 3rd December 2011

19

The Price of Procrastination

Suresh Vagjiani Managing Director Sow & Reap A Property Investment & Financing company.

This week I write from a shack in the mountains after a gruelling 15 hour car journey. The price I pay per night is Rs 150 reduced from Rs 250. I know it’s only £3 ....but I’m a Gujarati, why should I pay full price! It is a sharp contrast from the Taj in Delhi where the standard tariff for one night is Rs 18,000, which equates to about £250. I managed to get a 50% discount and pay Rs 9000 per night. I am here to hold a property seminar to market London homes to the wealthy citizens of New Delhi. In India you find slums side by side with the highest property prices in the world. In Mumbai the Ambani residence priced at £500 million overlooks Dharavir one of the biggest slums in the world. This stark contrast in India exists in all spheres of life, not just in prices of accommodation. Here the most corrupt lives side by side with some of the holiest men in the world. I arrived here from Vrindavan a town 3 hrs south of Dehli which rose from international obscurity to economic prosperity with the arrival of the white Krishna devotees. The Dollars and Pounds they have poured in have driven up the land prices. The property development going on here is tremendous. Interestingly the development is no longer funded by overseas investors, as was initially the case, but by the burgeoning wealthy middle class of Indians looking to secure a residence in the holy land for the fag end of their lives; a retreat away from home. It is ironic, that I should be here to hold a property seminar; a only a few years ago, this would have been unheard of, but the tides have changed.

Last we ek I wrote abo ut so me import ant steps to no te when investin g in property. W ith f urt her thou ght I discovered I fail ed to mention t he most impo rtant factor. Th e most impo rtant aspect in investing in property is n ot the steps and advice given. It is you . The biggest hindrance and obstacle when considering investing in property is the mental gymnastics we play as to why and why not to take the plunge. This leads to procrastination. This is the reason why most people lose money in property. They simply fail to take a decision and follow through with action. It is human nature to weigh up the odds and speculate as to why we should do something and why we should not. Not that we should not give due consideration to our investments and perhaps even decide we should not invest. That would be perfectly acceptable. That’s not the issue, the issue is indecision. The truth of the matter is we are looking for reasons not to move forward because we are scared to lose what we have got. It is fear which fuels our indecision and causes our paralysis. This fear of leaving our current perceived economic security leads to inaction. This thinking hinders progress in all aspects of life. This is especially true in dieting, this is why we have weekly periodicals giving ever new creative theory’s on how to diet - Because we don’t really want to diet! What we really wish to do is to READ about dieting, BIG DIFFERENCE. Probably so we can read, understand and then find reasons as to why we cannot apply this particular theory in our life. If you want to lose weight for most of us it means we should simply stop eating junk and start jogging, but that would be too simple and require too much discipline. Th e word d ecision comes from the Latin word Deisu s whic h means t o cu t off. If we look at the word decision it consists of two parts. To cut off what you have and inherit something else. In the process of making a decision to invest in property you agree to let go of your current situation in order to get to a more prosperous situation. Every one wants to get to a more prosperous situation, so the danger lies in the first half which is letting go of what you have. Here lies our deepest fear. Behavioural science shows we weigh losses much more heavily then a gain of the same amount. This means we fear losing much more then we enjoy gaining something new. This is actually very difficult to express to a client because it is not logical. The yield, past performance, likely future growth, can be easily expressed. The way your money depreciates sitting in a bank is easy to show. This obstacle is not in the realm of logic and is difficult to demonstrate. It is an emotional response which comes from our conditioning. A practical example is a client who is a pharmacist and who would regularly be in contact with us over a 3 year period, with the intention of investing but always finding reason not to, he kept saying that he would get back to me. Eventually we met in person at a seminar and we had a frank discussion. He mentioned he always feels rushed when we present deals to him. I explained to him that that’s the nature of deals,

generally if we don’t move fast enough we lose it. It is not that by moving fast we are cutting corners in the process. He has missed deals and seen them rise in value. I suggested to him he should take a decision either way as he is losing money by not doing so and wasting both mine and his own time. He agreed and we found him a nice two bedroom property in Hallfield estate in Bayswater for £315,000 in February of this year. In August similar flats were on the market at £375,000 and £385,000. He had purchased the property and rented it out for £550 pw riding on the government scheme giving roughly 9% yield and a solid growth in an extremely short period of time. And now his friend has decided to pursue an investment through us after a meeting nearly 3 years ago. Only this week we had a dentist who approached us for a mortgage in 2004. Since then he has been investing with property companies, most notably one called Inside Track. All the properties where outside of London and most had been new builds. He had paid fees to the companies he used but in short got lemons in exchange. Consequently he was hesitant to sign up with our services. I explained the difference in the way we operate. We only supply in strong central London locations and I explained that it is in our interest that our clients make as much money as possible as this ensures continued business for us. We work to establish a relationship and not a one off property deal. I have seen this time and again, prospective clients call, we speak and then they fail to deicide either way. In the interim, prices rise, and opportunities are lost. It is more dangerous to leave your money in cash in the bank, than in a physical asset. Property is a safe investment; this is why a bank will lend you 75% of the property value irrespective of your financial circumstances. With Sow & Reap’s sourcing service you will only need to decide, we take over and source the best property to suit your circumstances.

Shiny diamond picked up in Bayswater! £245,000 l Spacious and extremely well located one bedroom flat in Hallfield Estate. l One bedroom flats are very popular on the rental market - they rent out quickest of all! l Superb standard of management of the blocks - tenants will always feel comfortable. l Vast green spaces of Hyde Park are only 5 minutes walk away. l The flat comes at a discount of at least £30k - similar flats in the estate sold recently for £275k+. l Don't procrastinate... take action! Call us now on 0207 096 1083.

We provide a turnkey solution. Contact us now: Specialists in: l Property Sourcing l Mortgages l Commercial Finance l India Properties

UK Sales 0207 313 4595 India Sales 0203 384 5323

Tips of the Week l Property is by nature one of the most forgiving investment classes, so don't procrastinate! l There is a reason why the banks still readily lend 75% for a BTL property.

Westbourne House, 14-16 Westbourne Grove, London, W2 5RH

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