Which Expert Said Now is Not the Time to Invest in Property?

by Kelvin Kingsley

16:53 PM, 9th November 2011
About 10 years ago

Which Expert Said Now is Not the Time to Invest in Property?

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Which Expert Said Now is Not the Time to Invest in Property?

Let’s face it. If you put ten so called experts in the same room you will get ten different opinions. Also, if you look close enough you will generally find an ulterior motive to most so called expert opinions on future economic or investment conditions.

Point in case is a property news article I read this week on the Landlord Zone website by a Knight Frank estate agent spokesperson. In the article they talked up a boom time for London property investment for several years to come and portrayed a symphony of doom and gloom for property values North of London! Almost to the point where we might as well all hand our keys back to the bank. With Knight Frank having 20 estate agent offices in London I wonder why? And I found the press article answer why…

“PARTNERS in the upmarket estate agent Knight Frank have landed a £73 million pay out after profits rose by 10% in the last financial year, buoyed by foreign investors flocking to London’s luxury property market”.

Today, if it’s not the Euro Crisis, it’s the Double Dip Recession quandary. And just to mix it up they throw in the Middle East crisis where the local population are busy fighting each other for control of worthless desert. Which by the way makes a change from the USA just invading in the name of Oil? Sorry did I say Oil, I meant to say in the name of peace and injustice.Ok so mortgage finance is harder to obtain and deposits needed are now larger, but what’s the biggest problem today? Well it’s the total bombardment of media negativity on topics such as unemployment, economic downturn, and trade deficit. You name it, the media keeps repeating it and the public keeps buying into it. It’s a vicious circle of negativity. Remember, only bad news sells!

In the UK we do tend to suffer too readily from negativism; “We’re inundated with negative news and events”. It’s easier to be negative than positive because there’s so much reinforcement for the negative. As a result our economic boom and bust cycles tend to be more volatile than most other countries. I am reminded of the man that continually complains about the sex, nudity and violence on his VCR. Remember, if you want a positive attitude then you must choose to feed your mind with optimistic, hope-filled, motivational and enthusiastic information.

So what’s the answer? Laughter is a great motivator. And for investing, “Value Investing” is the answer. You must ignore the doom and gloom-mongers and look for real bricks and mortar value. How? By buying property with substantial “Built-In-Equity” from day one! Why? Because with Built-In-Equity from day one the downside is limited, and the future upside potential is huge. Where and how do you find such property value? Well today’s best property value and bargains are to be found …

In the next episode of the “Property Maverick” I will show you where and how to buy new or less than six years old properties for up to 40% less than what buyers originally paid for them as far back as 2005. Yes, that’s correct, a 40% discount off what people paid 6 years ago; unbelievable but true!

Until we speak again. Take what you do seriously and don’t take life too seriously; have fun, be different, be a “Maverick”. And remember there are only two things certain in life, and that’s “Death and Taxes”.

So enjoy the ride and do tune in for the next episode of the “Property Maverick”.

Comments

Richard Greenland Richard

16:07 PM, 11th November 2011
About 10 years ago

Good blog, I agree there seems to be a growing bubble in London. It astonishes me that so many London-based investors don't seem able to see it.

And I agree it's a good time to buy elsewhere. I'll be interested in your next blog.

Kelvin Kingsley

16:55 PM, 11th November 2011
About 10 years ago

Many thanks. Rich. I look forward to posting the next episode. The next one will be very useful information indeed to fellow or would be property investors. It will also be funnier. Its always serious stuff, but also about having FUN.

6:09 AM, 12th November 2011
About 10 years ago

Interesting blog...BUT...London is not all the same. It is not a little island where every property costs more and is worth more just because it's in "London" this is a popular misconception. I have seen many properties in London which have massively lost value - and will continue to lose value. In actual fact I continue to buy in London because it's cheaper & better value for money than most other places!

With regards buying properties at 40% less than what someone paid for them 6 years ago - I am unsure of your point. I can show you many things which you can buy now for less than what someone would have paid 11 years ago - does that make it a bargain? History does not prove the value of an asset.
Sam

22:33 PM, 13th November 2011
About 10 years ago

Some areas of east London went down in price (around 20%) like Leyton, Leytonstone... Not sure if those are the best ones to buy.

Any other areas than went down?

10:33 AM, 14th November 2011
About 10 years ago

It was an enjoyable read , a good down to earth observation. I look forward to your next blog, oh and thanks to 118 for providing the platform.

Regards

Kelvin Kingsley

13:27 PM, 14th November 2011
About 10 years ago

Hi, Sam. Thanks for the London insight and quite true no matter where you are there are still gems to be found on a beach of stones! However one of the problems today with buying properties in expensive sort after areas is that the rental yield is very low (HMO situations excluded). So when you want to release equity it can be almost impossible to do, especially as mortgage rental qualification has gone up. The non-release of gained equity will reduce a property portfolio's snowball effect. More on the "Snowball Effect" in the next blog.

Kelvin Kingsley

13:40 PM, 14th November 2011
About 10 years ago

Hi, Daniel - Thanks for comment on Leytonstone. Very interesting to note that fact, but more important is where does that leave the Gross Rental Yield % for that area now? Have there been many bank repossessions in that area? The higher these two factors the greater the opportunity today to buy in with built in equity and income safety from day 1.


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