My eldest daughter “flower” wanted this house for her 30th birthday as investment . I had to sit down and reason with her .
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Rent paid to you in 1year =25kX12=300k
Number of years it will take you to get ROI=6,400,000÷300,000= 21 years
You will be 51 years to have the tenants fully pay for the house!! That’s ridiculous.
My proposal:
Take the 6.4m in your account and put it in a trusted money market.Hata kama inflation will chew some of it ,it still beats buying those stupid houses above.
Here is the math assuming you get 9.3% a year. After you turn 51 you’ll be worth Ksh41m. You will leave something for my grandchildren just like I left for you.
These are simple math that you don’t get taught in school.
If you can add your 3.6m ontop of the one I gave you, then you will have over 60m in 21 years.
I bought an apartment at 5.5M…its currently occupied by a tenant paying 35k a month. In 13yrs time it will have paid for itself. Am in my 30s so i still have some juice to milk after its paid for itself ndio niwapie kivese yangu. Thats a long term investment but hiyo ya daughter yako itachukua muda mrefu sana kujilipa.
Your comparison is not correct. You have to take into account that in 21 years, rental income for the apartment will be 50-100k/month. The apartment will also appreciate in value
You have also not compounded the rental income like you have done for money market. For instance, after 6 years at that rate, total rental income will be 2M. That could be invested in the money market or bonds and be getting interest for 15 years