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is it worth investing on rental flats?
Rank: Elder Joined: 5/24/2007 Posts: 1,805
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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.
So u choose. Seconded! I Think Therefore I Am
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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Pablo wrote:@Cde Monomotapa Its not personal.
90% of you younger guys will fall into this. I put this here for your benefit. Lesson learn't comrade and I hope a lot more will see that. Investing is as much a personal choice as is getting saved. I learn't that early enough 
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Rank: Veteran Joined: 8/11/2010 Posts: 1,011 Location: nairobi
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Pablo wrote:@Cde Monomotapa Its not personal.
90% of you younger guys will fall into this. I put this here for your benefit. thought iam no much young nor old i totally agree with @pablo.real estate has a bit of peace of mind
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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Investing is not a luxury that can be forestalled till u r "rich". NO! Investing is what makes one rich and that begins ASAP! Be it stocks, real estate, bonds e.t.c. And it has nothing to do with the capital amount, it is about CREATING RETURNS. Otherwise the NSE wouldn't be a 1 Trillion* shilling pond. What's 10M out of 1T? Peanuts...
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Rank: Member Joined: 4/19/2007 Posts: 68
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Investing in real estate is no different than investing in any other category you need to understand the market before plunging in head first.
If you ask me if investing in the flats worth it, from my over 15 years in real estate investing I will say yes but with a rider only if the price was less than 6.5 million.
I am a strong advocate of the teachings of Dolf du Roos that always leverage your purchase and share the risk and rewards.
With a monthly income of 100,000/- and an assumed capitalisation rate of 15% the current value of the flats is 6.4 million therefore paying any more than that makes it a lemon.
To me it makes more sense to break-even for 3 years then make my tax free returns through capital gains that I extract through equity release.
Therefore the answer to the question is dependent on very many factors just like deciding whether to buy EverReady shares or not. For those with the herd mentality I have not answered the question but for the true investors they have seen the answer.
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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But err...frankly being a majority shareholder in a functioning and thriving business (especially listed) would give me a better orgasm than being just a landlord. Pursue ur own investment dreams good pple
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Rank: Elder Joined: 2/27/2007 Posts: 2,768
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in a market like nse, one is 100 times better off in real estate... ...besides, the presence of a safe alone does not signify that there is money inside...
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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I also think that novice investors are attracted to assets that are expensive a.k.a "going-up" without even stopping to ask at what stage of the cycle that asset class is.i.e buying high, selling low then pointing fingures at everyone but themselves. (lack of research and gobbling up opinions less facts and objective truths)
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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And also a bigger problem of averting interim pain in the course of achieving the bigger ideal/picture. There are no shortcuts, U want to be boss? Then pay the cost to be one or just stay the hell out the kitchen. #period#
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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There is no substitute for experience folks...no matter how many business schools one might attend. Gather an interest and set off learn as U move.
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Rank: Elder Joined: 3/18/2011 Posts: 12,069 Location: Kianjokoma
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If I had 10m, Id go into real estate. The opponents of real estate investment are assuming rents remain static which is not the case!
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Rank: Member Joined: 8/17/2011 Posts: 207 Location: humu humu
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cde am tryng to see ua point of view..someone who has made money frm other income streams stocks forex etc. you will ultimately need to put some of your funds in real estate. i know you will.
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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Apart from the family home and a block of something to keep the wife distracted...all other capital will be in superior businesses coz that is what I see not stocks. stocks are a representation of underlying junk or precious metals.
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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Nevertheless, I found a way of participating in the best of both worlds and from the bottom of both markets by buying into a listed property company called Pearl Properties www.pearlproperties.co.zw the company has portfolio to reckon from CBD Buildings, Office Parks, Industrial Warehouses, Malls and un-developed land  pays a good dividend too
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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Cde Monomotapa wrote:Nevertheless, I found a way of participating in the best of both worlds and from the bottom of both markets by buying into a listed property company called Pearl Properties www.pearlproperties.co.zw the company has portfolio to reckon from CBD Buildings, Office Parks, Industrial Warehouses, Malls and un-developed land pays a good dividend too In USD btw..but do I say...yawa
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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Got those and more for dirt cheap during Zim Dollar era, btwn 06 & 09 whereafter the USD became the official currency in Zim ;-) patience pay$
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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Aiming to replicate the Zim strategy in the 8th out of 10th year (80%) of the US & Euro Zone reccessions. In the meantime I expect to ride the growth curve that Sub-Saharan Africa has to offer.
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Rank: Member Joined: 4/6/2009 Posts: 78
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@Pablo"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.
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The house in question is now Ksh 11-12MN and the rent is Ksh 50k-55K.( a sign of how agents inflate asking prices)YES, real estate is a good investment but the PRICE is important.Buy at the WRONG price and you'll take decades to recover.If you had put 7MN in ARM in 2004 you would have at least KSH 28MN.
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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Just to comment on the liquidity squeeze in Kenya. I wouldn't read too much into it bcoz post 09 the Zim banks have operated without even a lender of last resort simply bcoz the governor can't print forex and exports and domestic demand/econ.activity are just but recovering. Have the banks made money? YES! Even when lending out 365 day loans at 30-40% interest one of the banks I have reported a 231% increase in interest income for H1 and made a net profit of $2.3M. Kenya has a lot more working now than Zim who are just in year 2 of post-recession. So I wouldn't be too overly concerned about their earnings.
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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That bank is called Kingdom Bank. www.kingdom.co.zw
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