There’s only ONE problem. We were talking about Sh10 million, if you remember. All the apartment blocks you have shown us above cost anywhere between 32-180 million. AND NONE HAS THE KIND OF RETURN YOU TALKED ABOUT.
The apartment blocks in Ruaka have an income of 1.6 million and are selling for 115 million. That is a 16.67% return per annum.
The one in Ngumba 875k and selling at 80 mil. That’s a 13.125% return.
The one in Kasarani 1.7 mil per month, selling at 180 mil. That is 11.33% p.a return before negotiation.
…and so on.
My point is you can get 1% per month return (in theory assuming 100% occupancy) from flats if you buy them from an investor with an urgent need for cash. You can also build and get similar or better returns but you have to be an insider in the industry or extremely street smart to avoid being exploited by engineers, architects, fundis etc. I have provided all the evidence you, @Okiya and @Nattydread need to end this debate.
Check the property below. Income is 140k and it goes for 16 mil before you negotiate. I have been lurking in real estate markets for a long time and I have seen what many sellers list their assets for versus the rent. The only thing I confirmed in this thread is that most people never check local real estate markets section ya apartment blocks. That is why they think I am dreaming nikitaja 1% per month.
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You my friend are living in a utopian world. This is only practical in theory in modern day 2019 Kenya. Do you know that the apartments in neighborhoods like Langata, with the glut in the market, you supplement the costs of it? Tuanzie hapo. I’m talking from first hand experience. By the way, getting tenants that do not default on their rent sio mchezo.
I never said it was easy. I also didn’t say anything about buying property in Lang’ata or any “high-end” area. Wewe hata hujaelewa point yangu before responding.
Brown skin tulisha kutambua hii sector ya real estate investment. Mambo ya positive cash flows inaflow in your blood. Only problem is that you keep building and renting in the air.
Nimeelewa everything that you are saying. You have a lot of theories that are only good on paper. That’s my point until you actually get out there in the real world and try it and then report back.
@Azor Ahai Great for the points. But never assume 100% occupancy. In fact doubt anything past 85%. Factor in rent defaults and wait times. And also remember to doubt the rental income figures of sellers when they are selling their units. They will claim anything. Just use that as a guide.
I have always liked you so let’s continue in a polite manner. And since you keep missing some points, I’ll enumerate them for your ease. Please confine your answers to these specific issues.
We were talking about Sh10m. Please let’s restrict ourselves to that. Explain to me how you can build/buy flats with Sh10m that will give a return of Sh140,000pm.
In all your projections, you keep talking about 100% occupancy and 100% rent payment. Do you honestly think this is a reasonable projection?
Sir, in all your projections, I see no provisions for among others, county land rates, KRA taxes, repairs, management fees (even if it a caretaker), depreciation, etc etc. Kindly explain how this fits with the 1% monthly return.
Regarding all the examples you have quoted above, do you think - in this country of rip-off artists - that those rent figures are exaggerated? I mean people have been sold non-existent land, greenhouses etc so exaggerated returns are pretty low on the totem pole. What say you bro?
Buying an already built up block is all very well, but given 4 above, what do you think is the probability of being conned to buy a condemned or structurally unsound building? In your answer, please contrast this risk with the risk of buying gavament bonds.
So, in a building with 109 such rooms, that is about Sh636,000, NOT Sh875,000 as quoted in the ad. AND THAT IS ASSUMING THAT NONE OF THE 109 HUSTLERS IN THOSE BEDSITTERS RUNS AWAY IN THE NIGHT and occupancy is always 100%, which is highly unlikely.
As I said, you can verify what each tenant pays on site because you obviously won’t buy a vacant building. A seller will have a hard time lying to you about total rent if the building is fully or 90% occupied because you can verify from the tenants personally. You are buying a going concern here, not a new building without tenants relying on cooked projections.
hii ya kitengela usijaribu…I can already see the size of that building and there is no way it has 40 2bedroom units…average rent for a 2 bed in kitengela is 15-17k. At 62m it’s grossly overpriced…almost twice the going price.