wazua Thu, Apr 30, 2026
Welcome Guest Search | Active Topics | Log In

2 Pages<12
It Pays to Acquire Multiple Investment Plots.
Options
Previous Topic · Next Topic
Seles83
#11 Posted : Tuesday, March 29, 2011 8:30:37 AM
Rank: Member

Joined: 11/9/2007
Posts: 288
Location: OZ
I think they are alot of assumptions here..i Honestly dont think the price rally of land will continue to sky rocket..we have probably a few more years left, also factor in the devalution of Kes and Incremental cost of construction...

Hybrid of both strategies is optimal when generating wealth...BTW owning multiple plots doesnt make you wealthy..it makes have a decent assest column...Income is Key!!!


More monies, more problems...
Back to top
  | | Edit by user: Tuesday, March 29, 2011 8:31 AM | Reason: Not specified
mukiha
#12 Posted : Tuesday, March 29, 2011 9:34:36 AM
Rank: Elder

Joined: 6/27/2008
Posts: 4,114
young wrote:
Sample this :-

INVESTOR A

Investor iNNOCENT bought a good investment plot 5 years ago for 300K bob, followed due process changed the title to his/ her name, commenced building shortly after by combination of mortgage and savings, finished the building 4 years after. He is a happy person because his plot (not house) is worth 3m Ksh and the 4 bedroom mansionette house is worth Ksh 14M at the going rate.

INVESTOR B
Investor DADA bought 3 of the investment plot same location 5 years ago for Ksh 900K at the same rate of 300K per plot.
Thereafter Dada perfected the titles, went to sleep, that is did not embark on any physical development for 4 years. On the 5th year, DADA sold two of the plots for 6 Million (the going price) and immediately use the 6 million bob to develop the third plot also a 4 bedroom mansionate whose market price is 14M Ksh.

QUESTION Who is wiser, the struggling INNOCENT or the smart DADA ?

The interesting thing is that DADA has been able to multiply his 900K 5 years ago to 14M while INNOCENT is bstill paying his/her mortgage loan.

This is the beauty of multiple investment plots.

Just an illustration



These sort of stories only work with the benefit of hindsight... and DADA appears the wiser of the two.

But reality demands that we work with foresight, and that's where things get very complicated... and we begin to be prudent and follow INNOCENT's plan.
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
Back to top
  |
Wendz
#13 Posted : Tuesday, March 29, 2011 9:37:44 AM
Rank: Elder

Joined: 6/19/2008
Posts: 4,268
Despite the many assumptions, i think in kenyan scenarios, Dada may be ahead of Innocent. Why?

Thinking that you can repay a mortgage in 6 years in kenya is a dream to many.... you will have to have an income good enough that you might not even need a mortgage in the first place. Last month, i enquired on a mortgage for a 4.2m house(inclusive of the plot - of coursesmile ). One would need to pay 59k monthly for 15 years. What is the average rent in the area? Kshs17k! Well, ask yourself, how many people will afford to be paying that with this sort of return on investment? And this, is actually the cheapest you can find of houses 35km radius from the city. Make that a repayment of 6 years and you will realise it is not realistic for many.

I doubt you can argue that innocent is saving on rent while dada is paying rent because then you have failed to factor in his opportunity cost of living in the house and foregoing the rental income.....(i would think you need to factor this in prudent accounting of your assets)...
Back to top
  |
Seles83
#14 Posted : Tuesday, March 29, 2011 10:54:37 AM
Rank: Member

Joined: 11/9/2007
Posts: 288
Location: OZ
In advanced economies..mortgages is two people application...It is only in Kenya where someone can buy a plot and develop it in stages.

Dont ever think just because you have a job, you deserve access to wealth..life doesnt work that way..you have to be innovative and a greater thinker to make wealth...

In OZ guys takes 30 yrs to repay mortgages..in Kenya we are lucky to repay it in 15yrs...The mortgage repayment is 3 times more than the rent...

Africa is gold mine of wealth...
More monies, more problems...
Back to top
  | | Edit by user: Tuesday, March 29, 2011 10:56 AM | Reason: Not specified
Wendz
#15 Posted : Tuesday, March 29, 2011 12:46:59 PM
Rank: Elder

Joined: 6/19/2008
Posts: 4,268
Seles83 wrote:
In OZ guys takes 30 yrs to repay mortgages..in Kenya we are lucky to repay it in 15yrs...The mortgage repayment is 3 times more than the rent...

Africa is gold mine of wealth...


ooooops, really? Then we need to just shut up and stop complaining....Laughing out loudly Laughing out loudly

Well, my argument is, if i can stay in a rented for say even 20k per month, I can do alot with 39k every month for the next 15 years and that is assuming any income increments just go to offset inflation effects in the economy....
Back to top
  |
Seles83
#16 Posted : Tuesday, March 29, 2011 2:10:15 PM
Rank: Member

Joined: 11/9/2007
Posts: 288
Location: OZ
The only problem with that analogy is your savings will match with inflation and the ever rising rent, house & Construction costs...

To get out of rent issues is Kenya is abit simpler than in 1st world economies..Get a plot and start building and do the finishing while living in it.. after all Rome ws not built in a day!!


Funny little fact is that in Japan, after housing bubble..the housing prices failed to correct to affordable levels...the government jointly with banks ammended mortgage period to 100yrs @ 2%!! :) :)
Imagine 2 generations of your family already in debt..
More monies, more problems...
Back to top
  | | Edit by user: Tuesday, March 29, 2011 11:59 PM | Reason: Not specified
sihingwa
#17 Posted : Tuesday, March 29, 2011 2:53:30 PM
Rank: Member

Joined: 9/29/2010
Posts: 216
Location: Kenia
In 2006 A colleague and I both obtained bank loans. My colleage bought 12 acres in Nyanza where he has been planting millet. He tried to convince me on that business line, but I bought 1/2 acre for 800K in Ronga. I have finished the loan and now I want to sell off 1/4 acre and build a house. My buddy has consistently made KES 0.96M every year...I feel jealous!!
Back to top
  |
Rahatupu
#18 Posted : Tuesday, March 29, 2011 4:47:26 PM
Rank: Veteran

Joined: 12/4/2009
Posts: 1,982
Location: matano manne
young wrote:
Sample this :-

INVESTOR A

Investor iNNOCENT bought a good investment plot 5 years ago for 300K bob, followed due process changed the title to his/ her name, commenced building shortly after by combination of mortgage and savings, finished the building 4 years after. He is a happy person because his plot (not house) is worth 3m Ksh and the 4 bedroom mansionette house is worth Ksh 14M at the going rate.

INVESTOR B
Investor DADA bought 3 of the investment plot same location 5 years ago for Ksh 900K at the same rate of 300K per plot.
Thereafter Dada perfected the titles, went to sleep, that is did not embark on any physical development for 4 years. On the 5th year, DADA sold two of the plots for 6 Million (the going price) and immediately use the 6 million bob to develop the third plot also a 4 bedroom mansionate whose market price is 14M Ksh.

QUESTION Who is wiser, the struggling INNOCENT or the smart DADA ?

The interesting thing is that DADA has been able to multiply his 900K 5 years ago to 14M while INNOCENT is bstill paying his/her mortgage loan.

This is the beauty of multiple investment plots.

Just an illustration




@Investor, I guess both of them seem to be square/ I mean draw look at it the other way:

What if Innocent built say 10 bed sitters with the mortgage to earn him 50k per month, or just enough to repay the mortgage? I bet Innocent would be better off since beside having the houses and assuming the mortgage is fully repaid in the 5 years, he'd have 50k cash flow every month, whereas Dada would struggle to sell off his assets to have an equivalent cash flow!
Back to top
  |
2012
#19 Posted : Tuesday, March 29, 2011 5:10:38 PM
Rank: Elder

Joined: 12/9/2009
Posts: 6,592
Location: Nairobi
Seles83 wrote:
I think they are alot of assumptions here.


I think so too. Maybe investor A could not afford 900K to buy the 3 plots but I agree this strategy of subdividing and selling to realise the goal of building a home has always made sense.

BBI will solve it :)
Back to top
  |
Jackson_J_Leonne
#20 Posted : Tuesday, March 29, 2011 5:39:08 PM
Rank: Hello

Joined: 3/29/2011
Posts: 1
Location: KENYA
I do tend this awas a deal,no bank would give such an interest anyway
Back to top
WWW BLOG
  |
2 Pages<12
Forum Jump  
You cannot post new topics in this forum.
You cannot reply to topics in this forum.
You cannot delete your posts in this forum.
You cannot edit your posts in this forum.
You cannot create polls in this forum.
You cannot vote in polls in this forum.

Wazua Investor Theme
Powered by YAF | YAF © 2003-2009, Yet Another Forum.NET
Copyright © 2026 Wazua.co.ke. All Rights Reserved.