That's a very good 'reality check' article.
I have a friend who's returning for good from the states, he had 20m to invest and asked us where he should invest this money. I advised him to put it in the 30yr bond but he wanted something more immediate and that he can see so he's bought an apartment for 13m on Denis Prit hapo Alfajiri - Citizen and something in South B for 6m. 1m went to lawyers and other fees.
Now his rental income though are supposedly 65k and 19k respectively since one apartment is not occupied.
So, while the bond would have earned him 166k headachlessly every month, he will now earn 84k with + headaches per month. Anyway you never know, his might still be the better option with time.

No offence meant but the article misses the point by a wide berth...start by looking at the how the return is calculated.I can only say the english is good.I rest my case.

The bottom line is one has to do a rethink of investing in real estate as a retailer by mortgage financing .

It does not pay because the rental income is always far lower than the monthly mortgage payment as the property prices appreciates faster than the rental income.

Besides the interest rate for mortgage is very high. Most cases for a mortgage loan of 5 Million ksh an investor is likely to pay back 12 Million Ksh or more over 15 years.

I do not subscribe to mortgage as a way of investing in real estate.

Also make no mistake about it, you CANNOT compare investing in real estate to bonds. In bonds the capital invested is static though the initial returns is higher but if you have your capital the value of your property will be increasing , so investing in real estate is better on the long term , as it is a hedge against inflation.

My experience is that in about 7 to 10 years, the rent will increase to cover the mortgage repayment... at least in Nairobi.

Still; you are right, one must think carefully about using mortgage to invest in rental property. It makes more sense when thinking about home buying. In that case, you can always knock off the rent you'd be paying. But in most cases, the mortgage on the house you are renting comes to about double the rent you are paying today....

Young, you are indeed right, although there are exceptions e.g. financing real estate development for sale.

On the other hand bond returns will be static if you hold the bond to maturity. But one can trade the bond and make a capital gain (loss)just as you can sell the property.