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is it worth investing on rental flats?
Rank: Member Joined: 10/8/2010 Posts: 446 Location: london
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why invest 10m for 100k a month, surely there must be other ways you can earn that with less capital
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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With that kind of capital KK & KCB will give you a better income yield over time. I don't see what the obssesion with costly real estate is all about too.
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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This is because annual company dividends can be raised by 20-50% with a good performing company whilst raising annual rents can be tricky, from my experience, as U are always doing so at the risk of tenant turnover/vacancies and taxes on dividends are only 5% 
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Rank: Elder Joined: 5/27/2008 Posts: 3,760
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african coloner wrote:why invest 10m for 100k a month, surely there must be other ways you can earn that with less capital That is a 12% return. (ksh 100K * 12)/ksh 10M. Which investment can beat that for such a passive and low risk investment?
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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Gordon Gekko wrote:african coloner wrote:why invest 10m for 100k a month, surely there must be other ways you can earn that with less capital That is a 12% return. (ksh 100K * 12)/ksh 10M. Which investment can beat that for such a passive and low risk investment? Less how much in rates & taxes(30%)? We are talking strictly income without capital gains/losses upon sale in both asset classes.
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Rank: Member Joined: 6/17/2011 Posts: 229
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Gordon Gekko wrote:african coloner wrote:why invest 10m for 100k a month, surely there must be other ways you can earn that with less capital That is a 12% return. (ksh 100K * 12)/ksh 10M. Which investment can beat that for such a passive and low risk investment? Mwambie kweli......there is neither bears nor bulls, just solid income. And you don't have to run the show yourself.
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Rank: Member Joined: 12/2/2009 Posts: 299 Location: kenya
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Not forgetting the inherent risk in holding liquid assets such as stock.You can wake up one day and your 10m is worth shs.10.In real estates unless a natural calamity takes place such as tshunami(which can be covered via insurance)the trend is always upwards.
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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U can ask the Western world if they still believe real estate prices can only go up or if there no capital losses or default risks on "safe" bonds. Basic investing knowledge informs us that all investment classes have cycles of boom & bust. 
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Rank: Elder Joined: 9/12/2006 Posts: 1,554
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popat wrote:Not forgetting the inherent risk in holding liquid assets such as stock.You can wake up one day and your 10m is worth shs.10. can you also wake up one day and your 10m stock is worth 20m?
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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Over a solid 10 years of sterling GDP growth U will make better income and capital gains from good company stocks and that's a fact.
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Rank: Veteran Joined: 3/25/2010 Posts: 939 Location: Nai
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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That's why Buffet & Trump don't belong in the same billionares club and ratings
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Rank: Member Joined: 6/21/2010 Posts: 119 Location: Nairobi
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With a Return of 100k per month, it will take a solid 8 years and 3 months to recoup the capital. This maybe long esp if some houses are unoccupied, rent is eaten up by renovations and utility bills like elect and hiring agents to collect rent and caretakers. At the end of the day, you will start eating your profits after 10+ years
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Rank: Member Joined: 10/8/2010 Posts: 446 Location: london
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groupielove wrote:With a Return of 100k per month, it will take a solid 8 years and 3 months to recoup the capital. This maybe long esp if some houses are unoccupied, rent is eaten up by renovations and utility bills like elect and hiring agents to collect rent and caretakers. At the end of the day, you will start eating your profits after 10+ years 10 years wait is a longitme unless you are investing for your children.
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Rank: Member Joined: 3/17/2008 Posts: 567 Location: Nairobi
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This is an argument that has been there since time in memorial.
Its all about your risk appetite.
Also without being too contraversial I can bet my A** that all those saying real estate is not worth it are likely to be below 35 or so and can only dream of Kshs. 10M. Those who have access to that type of cash am sure would jump to such an opportunity as GG has pointed out.
When I was younger I used to say why buy a house and pay an 85k mortguage while I could pay 30k for the same house and invest the rest in the stock exchange. By the way at that time my rented a 4br corner house with Sq in south C was being offered to me at 7M. Today its just unaffordable. Not only have i sank 6 yrs rent and did not buy stocks with the balance but also missed out on 8M capital gains. Mind you simmilar houses now rent for 60k.
So u choose.
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Rank: Veteran Joined: 12/23/2010 Posts: 1,229
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african coloner wrote:groupielove wrote:With a Return of 100k per month, it will take a solid 8 years and 3 months to recoup the capital. This maybe long esp if some houses are unoccupied, rent is eaten up by renovations and utility bills like elect and hiring agents to collect rent and caretakers. At the end of the day, you will start eating your profits after 10+ years 10 years wait is a longitme unless you are investing for your children. Investing for your children is not a bad idea. (Hmmm. How much further I'd be if someone had invested for me).
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Rank: Member Joined: 6/17/2011 Posts: 229
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african coloner wrote:groupielove wrote:With a Return of 100k per month, it will take a solid 8 years and 3 months to recoup the capital. This maybe long esp if some houses are unoccupied, rent is eaten up by renovations and utility bills like elect and hiring agents to collect rent and caretakers. At the end of the day, you will start eating your profits after 10+ years 10 years wait is a longitme unless you are investing for your children. Accumulating wealth is little by little, step by step, unless you are insunuating get-rich quick ponziish which has no truimph ripping others or being ripped off.
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Rank: Member Joined: 8/17/2011 Posts: 207 Location: humu humu
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Returns from real estate (in Kenya) have outperformed all other asset classes...however rental income has stagnated for some time now. in real estate, LOCATION,LOCATION,LOCATION is key. stocks MAY give you a better return but risks are so high you can also lose half that amount. there are many new real estate moguls but i doubt whether there are new Warren Buffets. My verdict: Invest 80% of tthe 10M in real estate(especially if you have the passion).spread the rest in carefully selected equities.
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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Pablo wrote:This is an argument that has been there since time in memorial.
Its all about your risk appetite.
Also without being too contraversial I can bet my A** that all those saying real estate is not worth it are likely to be below 35 or so and can only dream of Kshs. 10M. Those who have access to that type of cash am sure would jump to such an opportunity as GG has pointed out.
When I was younger I used to say why buy a house and pay an 85k mortguage while I could pay 30k for the same house and invest the rest in the stock exchange. By the way at that time my rented a 4br corner house with Sq in south C was being offered to me at 7M. Today its just unaffordable. Not only have i sank 6 yrs rent and did not buy stocks with the balance but also missed out on 8M capital gains. Mind you simmilar houses now rent for 60k.
So u choose. The problem here is personal. He neither bought stocks nor a house. No assets at all basically. Lesson to be learn't folks
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Rank: Member Joined: 3/17/2008 Posts: 567 Location: Nairobi
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@Cde Monomotapa Its not personal.
90% of you younger guys will fall into this. I put this here for your benefit.
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is it worth investing on rental flats?
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