The folly of investing in Rental Units

[Yollo]

I always invest for cash flow period, hii mambo ya capital appreciation apana tambua

[kawambui]

@wheelz

I. Don’t. Even.

This is an example of how people do not maximise opportunity. Hence, opportunity cost. A 50x100 plot can fit 16 units. 8 bed sitters & 8 one bedroom units. This would cost 40m to construct.

Therefore, if I had 10m in cash, I would buy the plot for 3.5m. 6.5m will get me about 30m in debt. Enough for me to do my 16 units. Fully constructed & let out within 8 months. A bed-sitter would let out at 10k and a 1 bed at 13.5k. That’s 188k a month. Annually, that’s 2.25m. How you repay your debt out of this would depend on the interest rate you secured.

There are other factors here, tax, rental increase… blah blah blah… but point is, after paying your loan, approximately 5-9yrs, your property value will be more than Kes 60m. Now you’ll have an asset that is appreciating, and cash flow. Things that open up more opportunity.

why did you give a wide berth those tuplots in vietnam?
i remember they were going for 40k before thika highway now none is less than 200k

[chuka]

@aviator you are thinking like a mathematics primary school teacher, you should be aspiring to reason like an economics professor instead

[aviator]

@chuka

@aviator you are thinking like a mathematics primary school teacher, you should be aspiring to reason like an economics professor instead

Matusi haisaidii.

[wheelz]

@aviator

188K/month will need 13 years to repay the loan. So, haujapata chochote (cash) for the 13 years. On the other hand, your property has grown from 40m to 60m, a 50% increment over 13 years!

Is it worth?

1. Property value grows from 10m to 60m.
2. Timing depends on interest rates as I indicated in the original post.
3. Cash flow

@kawambui

why did you give a wide berth those tuplots in vietnam?
i remember they were going for 40k before thika highway now none is less than 200k

I find buying land a very passive investment. Speculative even. Not my cup of tea unless you plan to develop, add value, control the outcome.

[bjurmann]

Mimi nataka Shamba ya kulima at least two acres preferably dairy. Either nilime Niki retire or inipe ideas in between. Your thoughts on my idea ye street smart keyboard millionaires?

[chuka]

@aviator

Matusi haisaidii.

Pole Budah it is/was not my intention to insult you, I guess my choice of words was wrong, what I am trying to say is that you can make a lot more many from a 50 by 100 plot than what you have quoted

[Mr_Black]

This lazy bullshit has to end!!! Instead of doing actual production we are throwing all our monies at speculation (mostly land which is limited) and trade (in things others produce, read imports), our balance of payment will always be lopsided against us, our economy will remain dependent on other economies such that what happens there directly affects us, this cycle has to be disrupted.

Those plots and buildings are only a means to an end, construction is huge business but it requires us to produce relevant products

[kawambui]

@wheelz

1. Property value grows from 10m to 60m.
2. Timing depends on interest rates as I indicated in the original post.
3. Cash flow

I find buying land a very passive investment. Speculative even. Not my cup of tea unless you plan to develop, add value, control the outcome.

i find it stress free despite it being speculative and bursting in the end

[Mr_Black]

@wheelz

1. Property value grows from 10m to 60m.
2. Timing depends on interest rates as I indicated in the original post.
3. Cash flow

I find buying land a very passive investment. Speculative even. Not my cup of tea unless you plan to develop, add value, control the outcome.

My thoughts exactly, our production capacity is vast but this land frenzy takes all the attention, for instance we are importing sugar when we can manufacture our own cheaply hapa Tana river, we always somehow have a maize deficit, milk and dairy products pia. We import eggs from UG now and animal feeds raw materials from TZ, we bring in apples and oranges from SA and Egypt, our apparel industry imports cotton when we can produce our own, mchele tunakula huku most of it (the ones that cost less than a hundred) comes from akina Pakistan and the likes…and the list goes on. Its fuckin pathetic.

[kawambui]

@Mr Black

My thoughts exactly, our production capacity is vast but this land frenzy takes all the attention, for instance we are importing sugar when we can manufacture our own cheaply hapa Tana river, we always somehow have a maize deficit, milk and dairy products pia. We import eggs from UG now and animal feeds raw materials from TZ, we bring in apples and oranges from SA and Egypt, our apparel industry imports cotton when we can produce our own, mchele tunakula huku most of it (the ones that cost less than a hundred) comes from akina Pakistan and the likes…and the list goes on. Its fuckin pathetic.

you are forgetting the risks involved whereas the land is a sure thing

[kawambui]

@Okiya kwani unaenda north korea mahali hakuna inter-net?

[Tommy_Lee_Sparta]

@Web Dev

Your point? Selling and buying genuine land is not that hard or an exclusive skill as you want it to appear. I know guys who are selling at Murera, kamakis etc and they barely finished high school.

haiya bought mine in murera apo reurero may be ur friend ndio aliniuzia… shida ya uku ni kukinyesha na stima kupotea na wizi ya kusanya power transformers but pole pole kuna grow

[WuTang]

@wheelz

I. Don’t. Even.

This is an example of how people do not maximise opportunity. Hence, opportunity cost. A 50x100 plot can fit 16 units. 8 bed sitters & 8 one bedroom units. This would cost 40m to construct.

Therefore, if I had 10m in cash, I would buy the plot for 3.5m. 6.5m will get me about 30m in debt. Enough for me to do my 16 units. Fully constructed & let out within 8 months. A bed-sitter would let out at 10k and a 1 bed at 13.5k. That’s 188k a month. Annually, that’s 2.25m. How you repay your debt out of this would depend on the interest rate you secured.

There are other factors here, tax, rental increase… blah blah blah… but point is, after paying your loan, approximately 5-9yrs, your property value will be more than Kes 60m. Now you’ll have an asset that is appreciating, and cash flow. Things that open up more opportunity.

Wapi huko bedsitter inalipishwa 10k?

[Acoustic]

@Tommy Lee Sparta

haiya bought mine in murera apo reurero may be ur friend ndio aliniuzia… shida ya uku ni kukinyesha na stima kupotea na wizi ya kusanya power transformers but pole pole kuna grow

Haiya, are you my neighbor? Not riuriro anymore, but kwa Yuda. :D:D
Hiyo wizi ya transformer oil imezidi.

[Fala_12]

ninatafuta plot mahali around nairobi max 400k

[Acoustic]

@Mr Black

This lazy bullshit has to end!!! Instead of doing actual production we are throwing all our monies at speculation (mostly land which is limited) and trade (in things others produce, read imports), our balance of payment will always be lopsided against us, our economy will remain dependent on other economies such that what happens there directly affects us, this cycle has to be disrupted.

Those plots and buildings are only a means to an end, construction is huge business but it requires us to produce relevant products

It’s crazy, this land speculation. Why should someone make 300% profit in 5 years for doing absolutely nothing? I refuse to participate in this form of robbery.

[Mathaais]

@Fala 12

ninatafuta plot mahali around nairobi max 400k

Niko na moja 50 X 100 nauza Utawala 4m, multiply your cash by 10 uje tuongee.

[Mzee_mzima]

@WuTang

Wapi huko bedsitter inalipishwa 10k?

Kweli bedsitter ni mangapi?

[kawambui]

@Acoustic

It’s crazy, this land speculation. Why should someone make 300% profit in 5 years for doing absolutely nothing? I refuse to participate in this form of robbery.

hehehe…
which form of robbery do you support