I was going through one of the property selling magazines, the cost of owning property in Nairobi is on the upward scale. A three bedroom apartment in Kileleshwa will cost you 20million with a monthly service charge of about 20k. a mortgage of 20million, at 16.6%interest per annum translates to about 287,000/- per month for 20years. making this kind of Monday per month is hard for most people, the funny thing is people are buying.
Trial One. external borrowing
with the internet,people are interacting, people are affording to buy such property by negotiating for loans with friends outside Kenya who can get loans at
affordable rates. I.e in the U.S. mortgage rates stand at 3% if one is able to partner with a friend and offer them say 4.5% in repayment then housing becomes affordable.
Trial two saccos
saccos offer loans at very competitive rates, if say you start contributing 30k per month to a sacco as your monthly saving instead of a bank, in three years you will have about 1.5million, big saccos can give you loans upto 20 times your saving, the advantage of this is that you will still be getting interest on your contribution.
Trial Three Farming
Again with technology, one can get alot of help on how to do farming, relocate to the village get say 10 good cows in two years each will be giving you about 35litres in the morning 20litres in the evening, that translates to about 550litres a day by 40/= a litre you make 22k per day. less 7k labour feeds etc per day you get 15k per day. say you have 20 cows, you Will be rivaling chemists in resources.
N.B. the writer is an aspiring usd billionaire who aims to make it legitimately.
A 3 bedroom house in Kileleshwa for 20M is not Not a worthy investment!!
How many people can afford to pay 287000 pm for 20 years. How much rent can I raise from the unit, probably 100-120K max??? That unit is over valued.
I’d rather put 100k of that money hata kwa NSSF as part of retirement benefit, and spread the balance in Unit trusts…
same thing happened in the US kabla property market crumbled down na foreclousre signs all over, wacha ihappen niggas watalia kwa choo best thing save that money tengeza nyumba nakuru retire avoid crisis
Owning a house in Nairobi does not make sense anymore. Afadhali mtu aangalie pia other urban areas especially if you don’t intend to settle in this city in the long run.
Factoring in depreciation and time value of money that house will not be worth as much in 20 years time… case in point those who took mortgages in Buru buru, umoja… these neighbourhoods are no longer appealing
A mortgage and ownership are 2 very different things… I would go for incremental housing rather than mortgage!!! If I have the 287,000 pm to spare, I would rather save for a year and buy a 3M plot in a reasonably good neighbourhood, Put up a small guesthouse/Sq in Year 2 & 3, (6M) move in and put up my dream house between yr 4 to 8… (12M), whose value will be way north of the 3 bedroom bungalow.
elewa future tense. let me simplify, dumb niggers watago for these mortgages two years ama fews years after watashindwa kulipa alafu nini itahappen foreclosure
Foreclosure happens in all countries of the world. But in Kenya it won’t be as widespread as the US. Only 30,000 kenyans have mortgages. Too small a number to lead to property slump.
Which dumb niggaz? Kenya has 24k mortgages which is a fraction of the total housing market. How will these 24k foreclosures collapse the real estate market?
The dynamics in the kenyan and the american property markets are worlds apart, the kenyan property market is not ‘busting’ any time soon, you can take that to the bank, most of the folks who buy such properties do so on cash basis or use foreign financial institutions with much lower interest rates. We only have about 20k mortgage accounts in kenya.