MatataMingi wrote:A House is an Asset - Period.
An asset something of value, which a house is. The same as the shares,Bonds etc. that you own.
- If I have a house that I rent, that gives me income, HOW can that be a liability.
- If I have house that I stay in, and therefore not pay rent, HOW can that be a liability.
Ask ANY account, when they prepare your accounts - where do they list houses, under assets or liabilities.
In the US you pay taxes [Property Tax] on a house you live in if you own it! That's not the case in Kenya.
People should not just copy-paste stuff. The realities in Kenya are very different from the realities in other parts of the world and as a result people should put what they read in context!!!
Back to Property Taxes. The highest property taxes in the US are in New York. In Monroe County, New York for example, you pay approximately 3% of your property [House, land + other additions] value in taxes annually. New York state law requires all properties in each municipality to be assessed by assessors appointed by the local governments. Your property should be assessed EVERY YEAR!!! Because property tax rates are set by local governments, they vary by location.
Example:
If you own a house valued at an equivalent of Kshs. 20m you annual property tax bill would be: -
3 / 100 * 20,000,000 = Kshs. 600,000/=
That is Kshs. 50,000/= every month in property taxes every month for living in your own house!!!
Then there is insurance, interest [mortgage] and maintenance.
Add to this the fact that property values in the US appreciate at a lower rate than the inflation rate and you will see why a house
in the US is a liability!!!
Believe it or not, in some cases, the cost of taxes, insurance, interest and maintanance is higher the the cost of renting a similar house!!! Strange but VERY TRUE!
In Kenya on the other hand, a house is an ASSET!
Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.