I have always stated that the era of land speculation is over! Report card ndio hii sasa. Enzi za kununua shamba in the middle of Timbuktu na kungoja bei ipande iliisha kitambo in the noughties. That’s when the period of supernormal returns ended. Obviously, this data is generalized, so don’t try to negate it with your unique case. As you can see, in the last 10 years, the returns haven’t been that high in Nairobi and its environs. If the population isn’t growing, the prices will not skyrocket. Supply and demand.
Mambo ya crypto has really warped people’s perception of what good returns are. Good returns are anything above 10% per annum, achieved steadily over a long period of time. 2.5x beats that goal with a good margin, even considering inflation, opportunity cost and any other invisible cost you want to factor in. Mind you, I personally am shy of investing in Kenyan real estate for other reasons, but I have to give credit where it is due, solid returns are there for those who dare.
For as long as:
Nairobi is the economic heart of Kenya
rural urban migration is still in full swing
the Kenyan population is still growing…
land in Nairobi and environs will remain a good bet for solid returns. Personally I see us going the Tokyo way with flats and highrise commercial buildings everywhere. So any land in Nairobi and environs that isn’t priced with a commercial building in mind is undervalued IMO.
This post has nothing to do with crypto. I’m just saying a 2.5X return before accounting for expenses and inflation is nothing to write home about, especially to small scale investors i.e majority of Kenyans.
Take a regular Kenyan anunue land 1M and aiuze 10 years later at 2.5M. Subtract inflation and other expenses. His real return is less than 2X. At that rate he will need five lifetimes kuomoka.
Such low but safe returns are only attractive to the birrioneas of this world. Mtu anaweza angusha kama 100M kwa land, na in those 10 years afanye kitu hapo kama farming.
I honestly believe that land speculation is a very bad investment for the common man. Ni “kulalisha pesa”.
You are right, but that doesn’t negate what I’m saying. Yes, a peasant with 1m to spare who wants to join the high net worth ranks of huko KShs 50m+ will probably have to do something high risk, high reward to achieve that goal. That still doesn’t mean that 2.5x in 10 years is bad
It is not a good return for most Kenyans. Let’s be honest here.
Sure. If governor XYZ invests 500 million on land and gets a 2.5X return in 10 years, he will be more than happy. Why? Because it is incredibly hard to double large amounts of money. Lakini the ordinary Kenyan kununua shamba for speculation ni just tying up capital. Ukinunua plot jenga nyumba uishi na ukinunua shamba weka greenhouse/warehouse/factory etc. Enzi za kununua shamba na kungoja zimeisha.
Actually, land banking is very high risk. There are many Ministry of lands people who help with land scams. Hapo unaweza chezwa ushangae. Many plots in this Kenya are double sold, kwanza those in “hot” areas. And both parties could have legitimate supporting documents . In who’s hands are land bankers safe?
Businesses also fail and plunge their owners deep into debt. Can you give us examples of legit businesses that can double your investment in two years?
Yeah. Outliers. Outliers are not statistically significant. Hii data ni average ya many land deals, not just a few. If you invested randomly in any of those areas, that would have been you likely return.
If you can not see/find a genuine business that gives you 5% profit monthly = 60% per annum and 120% in 24 months then wachana na mind ya biashara kabisaa