Do you have 70 million??? This is a catch 22 situation. You need money to make money. To make that 700k net in rent, you need 70 million bob.
- Hiyo 700k ni net of property management fees. Landlord hasumbuani na tenants. The OP stated 95k expenses monthly.
- Bonds are terrible investments. It is sad that even a birrionea like you doesnāt know that. When CBK prints money, it essentially steals from people who have cash assets such as bonds. That 8% per annum is like 4% when you account for inflation. On the other hand, in inflationary periods, landlords raise rent so they are effectively protected from inflation. Lastly and most importantly, bonds donāt have capital gains like real estate. Please never compare bonds with real estateā¦ever.
Bonds and saving schemes cannot compete with developing property.
Both have no capital gains unlike real estate. Mwenye hii buloti can liquidate the assets at more than a 2x return despite having been munching on his rental income for years. And if he/she doesnāt want to liquidate investment, can easily take a loan using the property and will get more money than the bond/savings person
The 2nd point is that bonds and savings schemes offer very little protection from inflation. If you take a lease through Dunhill, knight frank etc, you realize that they tell you rent will increase every year by 7.5-10%. Normal landlords who donāt using agencies just increase rent for new tenants. For savings accounts you make at most 5% above inflation
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Lmao the only advantage real estate has over bonds is capital gains which again is useless unless you plan to sell it or use it to get loans.
If I have 80 million today, Iād buy bonds bila kufikiria. Iām saying that as an upcoming landlord and son of one.
Alafu thereās something about real estate. It has fatigue. Iāve seen very many guys ove 60 get tired and liquidate or leave the management to their kids who go on to mismanage the properties.
A neighbour huko nyumbani has rental income of over 4 million a month but huwa zimemchokesha sana. Heās 70 na watoto wako majuu and even though the money is good, itās too much stress for a 70 year old.
No one wants to be dealing na sijui huyu hajalipa, sijui deposits sijui there was theft in their 60s leave alone 70s. Hakuna hio energy.
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Which is why property management companies exists.
Exactly. For me, the less people handling my money, the better. Especially kenyans and their inborn ukora na wizi. I would rather be content with the little assured gains. Ten years later you hear oh sijui this plot has a case, youāre not even the real owner bla bla bla. I have seen elderly people stressing out a lot and wish nothing of the sort. Spending your retirement haranguing in court over land disputes, no thanks. I have invested in rental property these sides and itās going on smoothly because Americans are generally straightforward people. I will probably buy another apartment in future, who knows.
Only a person without a property manager has problems like āsijui huyu hajalipaā. Real estate is a passive investment but if you decide to manage the buildings by yourself, it becomes a full-time job. Your neighbor needs a property manager. Property managers are the ones that make real estate a passive investment.
We have them and we change them every year or two. Issues bado lazima zikufikie na wizi haitakosa. From rental deposits, to watchmen to painting to repairs to so many other issues. Also remember that unless you go for the big guns who ask for crazy commissions, most property managers in Kenya are not learned or professional. The industry is very unregulated.
At my age I can manage and Iām slowly taking over za mzee as I also build my portfolio but at 60, hauwezani na rentals.
Try owning a 100 unit flat in Pipeline or Wendani or Githurai ndio ujue stress ya rentals.
When I cash out of the stock market in a few years, I will get into multi-family. I have a finance background and I can tell you for a fact that bonds arenāt as good as you think they are. The grass isnāt greener in the next garden. Bonds pay once every six months. That means you cannot use them for cash flow purposes to pay your monthly bills like you would use rent. Bonds donāt protect you from inflation. That is a very big risk/downside.
Also in some ways those bonds and fixed accounts, can be used as security for loans. Upto 80% of the fixed amount.
Same logic as saccoā¦ Loans and dividends.
Interest and loans.
My best advice scenario go to PostBank.
With 70m that will get you 9% TAX Free interest.
70,000,000 x .09 = 6,300,000 in a year, 525,000 in a month.
Use the Account to acquire a 30m Loan. Build, generate rent of around 250k a month if possible.
The 30M loan on 14% interest rate, in 10 years. Will require around 450k a month in installment payment.
This is 100% guaranteed by the interest generated by the fixed deposit rate if everything goes bad.
But honestly you wonāt lack rent income for 10 years period.
After 10 years you will have your 70m plus the property which will have that capital gain.
Problem is usually hio 70m iko wapi.:D:D
By the way on Wednesday I was asking about postbank rate.
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Why do I want to LoL? mmmmh there are so many caretakers out there. Look after him well and he will do the same.
I wonāt add anymore.
Sasa tunaongea lugha mojaā¦ Also forgetting ukianza kujenga leo, youāll collect your first rent after 18 months or 12 at best kama nyumba haismamiā¦
Rental income is good on paper but there are too many uncertainities, especially huku Nairobi Metropolitanā¦ Nairobi hakuna shamba ya mtu! I know people wenye waligongewa nyumba kwa disputed plot in Dec 2018 yet walikuwa na genuine papers. In the end they won the case lakini hawakurefundiwa hiyo damage. Nakuambia one day a random connected tycoon anaezabomoa hiyo 80mirrions yako na hakuna kitu utafanya.
Waafrica kazi ni kushtuka na kushuta
Kamati ya masaitani roho chafu washaanza kusema ati the guy ako na loan. Akuwe na loan ama apana he is better off than most of us will ever be! Hapa ni maombi na kujitahidi tukuwe landlords pia.
This is also a factor many people donāt get. To finish a 70m apartment ata ukiwa na pesa mfukoni will take considerable amount of time, which you donāt generate any income.
Exactly, majority of the landlords in posh residential units are politicians and people tied in the counties. Ukipata scandal moja ya 500million unajenga gorofa usiku na mchana
Real estate ni poa, but sasa Nairobi sikuizi hakuna shamba ya mtu. Sikumoja unaamka unapata gorofa serikali imeangushaā¦apo unakua wazimu
Hii game ya kuwa landlord ni rough, I know. But it is one thing I will try out in my lifetime, it is just one out of many places/opportunities one can invest their hard earned mulla on
In your experience how many landlords know this thing called ROI!!!?!!! You hear it so loud here on online investors who have never even built a pigsty.
Pesa ya biashara brings income. That income is invested in rental units. Rental units bring more income. The cycle repeats itself until the landlord leaves this earth.