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Is Taking a Mortgage the WORST Decision Ever??
Rank: Member Joined: 1/15/2010 Posts: 625
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This housing problem is all a making of the failure of urban planning. It just seems that you have to have atleast 30 million to own a decent house in Nairobi if you don't want to live in an apartment. Tatu City could have helped in this regard but they seem to be forever stuck. Centum should consider taking over that project. Kenyans will continue to have a lower quality of life unless we see more controlled mega projects like Tatu City was proposing.
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Rank: Elder Joined: 4/30/2008 Posts: 6,029
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kamundu wrote:omhangla wrote:There are these arpatments; Milimani excutive arpatments (Hazina close) build by NSSF. 34 million for 3 bedroom. is it a fair deal No its not a good deal. 34million can buy you a 4 bedrrom house with an SQ on kiambu road for 32M SOLD OUT IN 11 DAYS OFF PLAN!!!!!!!!! http://www.businessdaily...0/-/jl2wp0z/-/index.html
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Rank: Elder Joined: 7/22/2009 Posts: 7,455
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Obi 1 Kanobi wrote:sanity wrote:I built my own home in the outskirts of Nbi...After all the 3 yrs hustle,The challenges reamins especially in things beyond my control.
1.Whenever it rains,getting to my home is a challenge yaani the road gets washed away because the council has not any roads.
2.Lack of a proper sewer system brings serious challenges.
3.My neighbour has put up temporary structures next to his unfished house..damn1
4.My other neighbour has put up containers and is planning to rent them out as shops
5.No schools nearby
6.No shopping centre nearby
7.I have to leave my home before 530am everyday to beat the morning traffic.
8.Security...no problem though..not with my 4 rottweillers which shit all over my 1/4 plot.
Well,despite these challenges,Sometimes I think that I made the good decision.Maybe in future this issue esp on the gavas side will get resolved.The bottom line is when you decide to build your own home be ready to face all these challenges amongst others.. Finally an honest opinion, yes this is the decision one has to make between a mortgage and kujenga. One has to be very careful especially if you have school going children. Kwani hauwezi jenga mahali you have all this services? People built in controlled areas like Harambee Estate in Donholm, a couple of gated estates next to ICIPE in Kasarani etc. and it didn't cost them an arm and a leg. And this estates have everything close to them. There are also serviced flats/apartments in Mombasa road going for 5 - 6 million - close to schools, shopping centers etc. What stops anyone from buying them - in cash!! You don't have to choose between mortgage and going to the bundus! Between these two extremes, we have very many other options! Life is not binary. Let's stop behaving as if it is!!! Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Elder Joined: 7/22/2009 Posts: 7,455
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Quote:A recent survey by real estate managers, Hass Consult, found that housing sales volumes rose in the first three months of the year, "but most markedly for cash-financed high-end properties".
In contrast, the real estate market for middle-income earners has been almost flat with prices dipping in the second half of last year.
The slow uptake in the middle and low income earners has been attributed to high cost of mortgages which they have to rely on to finance purchases. The two levels, however, have the largest demand for housing.
As at end of last year, Kenya had 19,879 mortgage loan accounts worth Sh138 billion which meant that the average mortgage size was Sh6.9 million. The average interest rate charged on the loans was 16.4 per cent. LinkNever count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Elder Joined: 10/9/2008 Posts: 5,389
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sanity wrote:I built my own home in the outskirts of Nbi...After all the 3 yrs hustle,The challenges reamins especially in things beyond my control.
1.Whenever it rains,getting to my home is a challenge yaani the road gets washed away because the council has not any roads.
2.Lack of a proper sewer system brings serious challenges.
3.My neighbour has put up temporary structures next to his unfished house..damn1
4.My other neighbour has put up containers and is planning to rent them out as shops
5.No schools nearby
6.No shopping centre nearby
7.I have to leave my home before 530am everyday to beat the morning traffic.
8.Security...no problem though..not with my 4 rottweillers which shit all over my 1/4 plot.
Well,despite these challenges,Sometimes I think that I made the good decision.Maybe in future this issue esp on the gavas side will get resolved.The bottom line is when you decide to build your own home be ready to face all these challenges amongst others.. These are more or less the same challenges the residents of Runda, Karen, Loresho etc faced years ago when they bought plots in the 'outskirts' of nairobi in what were former coffee farms. But they had a vision and with time they have turned the muddy coffee farms into Kenya's most prestigious residential estates. If they could do it then, you and your neighbours can do it in the 21st century.
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Rank: Elder Joined: 2/16/2007 Posts: 2,114
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jaggernaut wrote:
These are more or less the same challenges the residents of Runda, Karen, Loresho etc faced years ago when they bought plots in the 'outskirts' of nairobi in what were former coffee farms. But they had a vision and with time they have turned the muddy coffee farms into Kenya's most prestigious residential estates. If they could do it then, you and your neighbours can do it in the 21st century.
I believe some of these challenges will be difficult to overcome when some of the neighbours have 80x40 plots..
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Rank: Member Joined: 1/24/2013 Posts: 325
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MaichBlack wrote:kiwaru wrote:And a lesson i have learnt is that high risk-high return investments need to be anchored in low risk-low return investments because there is a season for... and a season for... I agree with you @kiwaru. You need to balance risk. I'll tell you for a fact, one of my long term goals is to build a block of flats. Now, do rentals have the same yield as stocks? Not by a country mile! Returns in the stock exchange are far much higher that what you would get from rentals [surprise, surprise!] Then why would I want to do flats. 1) My kids - They don't need much 'financial education' to collect rent if God forbid I was not around anymore. They might not necessarily fair too well in the stock market if they don't have the interest. The block of flats would be my security for them! 2) I might get tired of the stock market as I grow older - maybe prefer travelling to analyzing stocks and company performance. Luckily I will have the mother of all passive incomes. 3) Stability - Despite what happened in the US, rentals would provide a defense to any shocks that might be experienced in the future! 4) Risk averse(ness) - As you grow old, you become more risk averse. Low risk, low return will do. And in any case, you should have made your money in your younger ages and probably in old age you are just interested in protecting it from inflation! But the fact remains, I will not do my block of flats on 15%+ interest mortgage. Best case scenario [henceforth referred to as 'the plan'. He he he], is to make my money in the stock market and else where then "park" some of the money in a block of flats! 
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Rank: Member Joined: 1/24/2013 Posts: 325
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MaichBlack wrote:omhangla wrote:There are these arpatments; Milimani excutive arpatments (Hazina close) build by NSSF. 34 million for 3 bedroom. is it a fair deal This is exactly what I was saying!!! 34 million for a fourth floor house. And this is NSSF which is supposed to be "cheaper" than the other sharks!!! If you were to pay for this house using a 20 year mortgage [at 16% interest], it would cost you Kshs. 473,027/= every month!!! Kshs. 473,027/= per month for the next 20 years [hoping the rates don't go up!!!] during those 20 years!!! If it hits 25% like it did a couple of years ago, your monthly payments go up to Kshs. 713,393.52/=!! For a three bedroom apartment!!! And then some fellows will tell you you can accelerate payments!!! To what??? A million a month maybe?? And what business are you in??  This is now ridiculous!!! Ati 34m for a 3 bed...Kenyans have lost their mind. This is where the street con-men have relocated = real estate.. 
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Rank: Member Joined: 1/24/2013 Posts: 325
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mawinder wrote:kamundu wrote:[quote=omhangla]There are these arpatments; Milimani excutive arpatments (Hazina close) build by NSSF. 34 million for 3 bedroom. is it a fair deal No its not a good deal. 34million can buy you a 4 bedrrom house with an SQ on kiambu road for 32M SOLD OUT IN 11 DAYS OFF PLAN!!!!!!!!! http://www.businessdaily.../-/jl2wp0z/-/index.html[/quote] Wow! I'm speechless..
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Rank: Member Joined: 1/24/2013 Posts: 325
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ChumsQuest wrote:mawinder wrote:kamundu wrote:[quote=omhangla]There are these arpatments; Milimani excutive arpatments (Hazina close) build by NSSF. 34 million for 3 bedroom. is it a fair deal No its not a good deal. 34million can buy you a 4 bedrrom house with an SQ on kiambu road for 32M SOLD OUT IN 11 DAYS OFF PLAN!!!!!!!!! http://www.businessdaily.../-/jl2wp0z/-/index.html[/quote] Wow! I'm speechless.
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Rank: Veteran Joined: 7/5/2010 Posts: 2,061 Location: Nairobi
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ChumsQuest wrote:ChumsQuest wrote:mawinder wrote:kamundu wrote:[quote=omhangla]There are these arpatments; Milimani excutive arpatments (Hazina close) build by NSSF. 34 million for 3 bedroom. is it a fair deal No its not a good deal. 34million can buy you a 4 bedrrom house with an SQ on kiambu road for 32M SOLD OUT IN 11 DAYS OFF PLAN!!!!!!!!! http://www.businessdaily.../-/jl2wp0z/-/index.html[/quote] Wow! I'm speechless. I think many are speculating, not wanting to carry to full term but expecting the value of the apartments to rise to 40 or 45 million within a year or so and hence making a quick, fat profit. Me thinks they are in for a small surprise. My prediction is the rise in value will not be that big, especially if the units are many. There are plenty of luxury homes with few takers already.
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Rank: Elder Joined: 7/22/2009 Posts: 7,455
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For the fellows who were thinking I was being over ambitious with my estimates on NSE returns, sample this! Quote:Equity first bought into HF in July 2007 when it teamed up with Britam to acquire CDC Group Plc’s 24.99 per cent stake in a deal that saw the lender pay Sh433 million for its stake (20.17 per cent).
The two partners increased their stakes the next year when HF made a rights issue at the ratio of one-for-one in a cash call that the government and the National Social Security Fund (NSSF) skipped.
This saw Equity’s stake in HF rise to the current level, with Britam’s jumping to 21.46 per cent.
The twin transactions have overtime proved lucrative for the two institutions with Equity’s stake surging to the current market value of Sh2.2 billion based on HF’s share price of Sh42.75.
This means that Equity stands to harvest a return of more than 500 per cent, including dividends that the lender has been receiving from HF over the years. LinkThis one too... Quote:The share [Housing Finance] has gained 64.3 per cent over the past year, making it the best performing bank on the Nairobi bourse over the period.
Equity has gained 44 per cent in the period, KCB (35.1 per cent), Standard Chartered (10.7 per cent) and Barclays Bank (6.39 per cent). And that's in a year of "dialogue", Al shabaab, travel advisories, run away insecurity etc.!!! Spin doctors, over to you! Spin that one!!! Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Elder Joined: 7/22/2009 Posts: 7,455
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As if that is not juicy enough, pleace note Housing Finance was trading at 51/= today!!! [not 42.75/=]. Do the Math. Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: New-farer Joined: 5/7/2014 Posts: 40
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MaichBlack, I agree that Housing Finance and Equity Bank are great stocks (I own both). But it is a fallacy to suggest that the Nairobi market generates out-sized returns just because of the few examples you have given . You are making a hasty generalization to only give a few examples (and with the advantage of hindsight).
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Rank: Elder Joined: 7/22/2009 Posts: 7,455
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KenyanEconomist wrote:MaichBlack, I agree that Housing Finance and Equity Bank are great stocks (I own both). But it is a fallacy to suggest that the Nairobi market generates out-sized returns just because of the few examples you have given . You are making a hasty generalization to only give a few examples (and with the advantage of hindsight). I am not making a hasty generalization. I'm living what I preach. I own both. And not by accident!! You need to know what you are a doing in this market. I'll forgive you for your assumption(s) coz you are new [ok, you might be an elder in a hello's skin!] but you can go through old threads and you'll see what I'm talking about. We are here to make money not to be a talk shop fueled by hindsight. As others a busy asking why, we are busy asking why not! Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Elder Joined: 7/22/2009 Posts: 7,455
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KenyanEconomist wrote:But it is a fallacy to suggest that the Nairobi market generates out-sized returns just because of the few examples you have given . You are making a hasty generalization to only give a few examples (and with the advantage of hindsight). You call this hindsight???When that thread was started [2 years ago!] Housing Finance was at 15/=. two weeks later, there was a fellow who was overjoyed when it hit 16.50/= [see post #11]. Two years later we are at 51/=!!! Returns: (51 - 15)/15 * 100 = 240% 240% returns in two years!!! No hindsight!!! It was discussed in broad daylight!! Anyone with eyes and ears.... As for the Thomases... Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Veteran Joined: 4/16/2014 Posts: 1,420 Location: Bohemian Grove
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MaichBlack wrote:KenyanEconomist wrote:But it is a fallacy to suggest that the Nairobi market generates out-sized returns just because of the few examples you have given . You are making a hasty generalization to only give a few examples (and with the advantage of hindsight). You call this hindsight???When that thread was started [2 years ago!] Housing Finance was at 15/=. two weeks later, there was a fellow who was overjoyed when it hit 16.50/= [see post #11]. Two years later we are at 51/=!!! Returns: (51 - 15)/15 * 100 = 240% 240% returns in two years!!! No hindsight!!! It was discussed in broad daylight!! Anyone with eyes and ears.... As for the Thomases... @Maich I own some britam which is at the center of the current musical chairs.got in @9 so after about 1 year you can see why I'm all smiles. Let these guys continue doubting n sitting on the sidelines watching us make REAL money.And btw this is my 4th stock to hit over 50% in 1 year.
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Rank: Elder Joined: 7/22/2009 Posts: 7,455
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whiteowl wrote:MaichBlack wrote:KenyanEconomist wrote:But it is a fallacy to suggest that the Nairobi market generates out-sized returns just because of the few examples you have given . You are making a hasty generalization to only give a few examples (and with the advantage of hindsight). You call this hindsight???When that thread was started [2 years ago!] Housing Finance was at 15/=. two weeks later, there was a fellow who was overjoyed when it hit 16.50/= [see post #11]. Two years later we are at 51/=!!! Returns: (51 - 15)/15 * 100 = 240% 240% returns in two years!!! No hindsight!!! It was discussed in broad daylight!! Anyone with eyes and ears.... As for the Thomases... @Maich I own some britam which is at the center of the current musical chairs.got in @9 so after about 1 year you can see why I'm all smiles. Let these guys continue doubting n sitting on the sidelines watching us make REAL money.And btw this is my 4th stock to hit over 50% in 1 year. Congrats!!! And these same fellows will be calling you an illuminati in 10 years wondering where you got all the money and yet they used to work in the same company and were probably earning a higher salary than you!! Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Member Joined: 5/14/2014 Posts: 288 Location: nairobi
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Maich you are right.Several counters have already doubled my initial investment, but one needs to know cleary what they are doing I find satisfaction in owning great business,not trading them
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Rank: Member Joined: 1/24/2013 Posts: 325
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MaichBlack wrote:whiteowl wrote:MaichBlack wrote:KenyanEconomist wrote:But it is a fallacy to suggest that the Nairobi market generates out-sized returns just because of the few examples you have given . You are making a hasty generalization to only give a few examples (and with the advantage of hindsight). You call this hindsight???When that thread was started [2 years ago!] Housing Finance was at 15/=. two weeks later, there was a fellow who was overjoyed when it hit 16.50/= [see post #11]. Two years later we are at 51/=!!! Returns: (51 - 15)/15 * 100 = 240% 240% returns in two years!!! No hindsight!!! It was discussed in broad daylight!! Anyone with eyes and ears.... As for the Thomases... @Maich I own some britam which is at the center of the current musical chairs.got in @9 so after about 1 year you can see why I'm all smiles. Let these guys continue doubting n sitting on the sidelines watching us make REAL money.And btw this is my 4th stock to hit over 50% in 1 year. Congrats!!! And these same fellows will be calling you an illuminati in 10 years wondering where you got all the money and yet you used to work in the same company and were probably earning a higher salary than you!! @Whiteowl, how much is Britam trading for now? I need these kind of investment stories so I feel strong enough to take the plunge...@Maich, I will be talking to you soonest coz I see you know what it is when it comes to stocks...
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