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Is Taking a Mortgage the WORST Decision Ever??
Rank: Elder Joined: 7/22/2009 Posts: 7,455
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PeterReborn wrote:MaichBlack wrote:murchr wrote:MaichBlack wrote:murchr wrote:Boris Boyka wrote:murchr wrote:Kwani Mortgages are not on a fixed rate? And why the hell are you taking a 30M loan? That building better be giving you back 1M monthly NO, NEVER! fixed rate is used on Short term asset loans like machinery and commercial cars. Unless you are in these group of Kenyans you need not a 30M loan @murchr - See the post above!!! 30 million, 3 million or 300k, the story is the same! Monthly payments up 54% pap!!! If the cost of leverage is passed to Mr Landlord, then he's about to pass the same to the one renting. Will never happen - The tenants will move! Most landlords are NOT servicing mortgages so they are not affected! There are only about 20,000 mortgage accounts in Kenya - and those cover owner occupier, office buildings, rentals etc. What that means is that as a landlord with a mortgage, you might be the only one with a mortgage in that neighbourhood!!! If you increase the rent, you will do it alone. Next thing you know, you will have Zero tenants!!! The demand for rental houses in Nairobi outweighs by far the supply and therefore the houses will still find tenants even with the increased rental fee. Continue humouring yourself. And while at it, take a drive and see the number of empty units around!!! The demand is not matched by spending power. It is more of a "want" than a demand! 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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deleted. 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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deleted. 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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deleted. 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: 6/23/2009 Posts: 13,517 Location: nairobi
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I own a number of houses and the interest rate pinch has not yet been felt. The bubble cannot burst in Kenya until supply demand dynamics are equated
HF 90,000 ABP 3.83; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
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Rank: Veteran Joined: 11/15/2013 Posts: 1,977 Location: Here
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MaichBlack wrote:deleted. Seems you haven't paid your phone rent, it has increased the rate  Everybody STEALS, a THIEF is one who's CAUGHT stealing something of LITTLE VALUE. !!!
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Rank: Member Joined: 12/2/2009 Posts: 299 Location: kenya
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I think the oversupply is in the upper level segment as opposed to the middle level and low level segment.The appetite for the rental space in these two lower segments will not be saturated for the foreseeable future.Talk of estates such as O.rongai,Kahawa,kasarani,Eastlands,Mlolongo etal. Infact this has been the case for a number of years now.There are however some developers who have done "upper level" developments in either medium/low density hoods and charged them premium price to catch in on the demand.These would marginally reduce their prices without any effect on their bottom line.This may be the case with Suraya.
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Rank: User Joined: 1/20/2014 Posts: 3,528
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The rate increments are base lending rates and loans are given above this. Some of the interest rates are now approaching shylock levels. Unproductive and not sustainable! Formal education will make you a living. Self-education will make you a fortune - Jim Rohn.
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Rank: Elder Joined: 7/22/2009 Posts: 7,455
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Boris Boyka wrote:MaichBlack wrote:deleted. Seems you haven't paid your phone rent, it has increased the rate He he he. It is Safaricom. Takes for ever then gives an error message. You click retry and post again kumbe ilutuma kitambo! 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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obiero wrote:I own a number of houses and the interest rate pinch has not yet been felt. The bubble cannot burst in Kenya until supply demand dynamics are equated @Mike Ock had told us about houses in the rural areas taking a week or less to construct with no mortgage. Of course the owners feel no pinch!!! 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: User Joined: 1/20/2014 Posts: 3,528
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MaichBlack wrote:obiero wrote:I own a number of houses and the interest rate pinch has not yet been felt. The bubble cannot burst in Kenya until supply demand dynamics are equated @Mike Ock had told us about houses in the rural areas taking a week or less to construct with no mortgage. Of course the owners feel no pinch!!! Formal education will make you a living. Self-education will make you a fortune - Jim Rohn.
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Rank: Elder Joined: 7/22/2009 Posts: 7,455
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popat wrote:I think the oversupply is in the upper level segment as opposed to the middle level and low level segment.The appetite for the rental space in these two lower segments will not be saturated for the foreseeable future.Talk of estates such as O.rongai,Kahawa,kasarani,Eastlands,Mlolongo etal. Infact this has been the case for a number of years now.There are however some developers who have done "upper level" developments in either medium/low density hoods and charged them premium price to catch in on the demand.These would marginally reduce their prices without any effect on their bottom line.This may be the case with Suraya. People are so oblivious of what is happening on the ground!! What happens when a tenant moves out of a rental house. The next tenant is charged higher than the current ones!! I know landlords who have tried pulling those stunts in the Estates you are mentioning and of late it has been backfiring badly!! I know a fellow with an extremely nice house in a nice location and with sufficient parking. He demanded 20% more for a vacated house, it stayed for more than 3 months without a tenant. And we are talked about a building where a few years ago you couldn't get a house without "insider information". Everyone used to inform their friends and relatives while moving and before they moved out someone has already booked and paid for the house!!! The last two times it has stayed for 2 and 3 months respectively without getting a new tenant because of a slight increment in rent. 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: 2/7/2014 Posts: 155
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MaichBlack wrote:popat wrote:I think the oversupply is in the upper level segment as opposed to the middle level and low level segment.The appetite for the rental space in these two lower segments will not be saturated for the foreseeable future.Talk of estates such as O.rongai,Kahawa,kasarani,Eastlands,Mlolongo etal. Infact this has been the case for a number of years now.There are however some developers who have done "upper level" developments in either medium/low density hoods and charged them premium price to catch in on the demand.These would marginally reduce their prices without any effect on their bottom line.This may be the case with Suraya. People are so oblivious of what is happening on the ground!! What happens when a tenant moves out of a rental house. The next tenant is charged higher than the current ones!! I know landlords who have tried pulling those stunts in the Estates you are mentioning and of late it has been backfiring badly!! I know a fellow with an extremely nice house in a nice location and with sufficient parking. He demanded 20% more for a vacated house, it stayed for more than 3 months without a tenant. And we are talked about a building where a few years ago you couldn't get a house without "insider information". Everyone used to inform their friends and relatives while moving and before they moved out someone has already booked and paid for the house!!! The last two times it has stayed for 2 and 3 months respectively without getting a new tenant because of a slight increment in rent. I wish someone could give us a true picture of the real estate business. From a layman, i see so many houses to let....upto equivalent of one full block being empty in an estate and taking upto if not more than three months to get replacement tenant.In such scenario, unless the Landlord bought the house cash cash then it really does bite.
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Rank: Member Joined: 2/7/2014 Posts: 155
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Rank: Member Joined: 8/15/2015 Posts: 817
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if you cannot get handle mortgage stuff as they say stick to your lane.i have seen people amass big properties and they started with mortgages.leveraging on their properties to buy new ones.hata hiyo thika road it was build by a mortgage from muchaina.
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Rank: Veteran Joined: 1/20/2011 Posts: 1,820 Location: Nakuru
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Morgue age. Dumb money becomes dumb only when it listens to smart money
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Rank: Veteran Joined: 11/2/2006 Posts: 1,206 Location: Nairobi
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kasibitta wrote:MaichBlack wrote:popat wrote:I think the oversupply is in the upper level segment as opposed to the middle level and low level segment.The appetite for the rental space in these two lower segments will not be saturated for the foreseeable future.Talk of estates such as O.rongai,Kahawa,kasarani,Eastlands,Mlolongo etal. Infact this has been the case for a number of years now.There are however some developers who have done "upper level" developments in either medium/low density hoods and charged them premium price to catch in on the demand.These would marginally reduce their prices without any effect on their bottom line.This may be the case with Suraya. People are so oblivious of what is happening on the ground!! What happens when a tenant moves out of a rental house. The next tenant is charged higher than the current ones!! I know landlords who have tried pulling those stunts in the Estates you are mentioning and of late it has been backfiring badly!! I know a fellow with an extremely nice house in a nice location and with sufficient parking. He demanded 20% more for a vacated house, it stayed for more than 3 months without a tenant. And we are talked about a building where a few years ago you couldn't get a house without "insider information". Everyone used to inform their friends and relatives while moving and before they moved out someone has already booked and paid for the house!!! The last two times it has stayed for 2 and 3 months respectively without getting a new tenant because of a slight increment in rent. I wish someone could give us a true picture of the real estate business. From a layman, i see so many houses to let....upto equivalent of one full block being empty in an estate and taking upto if not more than three months to get replacement tenant.In such scenario, unless the Landlord bought the house cash cash then it really does bite. I remember my aunt had 2 bedroom apartments in South C.Back in 2007 when they were completed rent was 30K. In 2008 rent went to 32-35K and guys had to "know" the caretaker to be tipped when vacant. Actually they would be occupied 1 day after the tenant moved. Fast forward to today, the roads around were tarmacked but the rent has remained at 32-35K and I have seen at times upto 2 of the 6 units staying vacant for 3-4 months. Formally employed people often live their employers' dream & forget about their own.
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Rank: Member Joined: 3/20/2009 Posts: 348
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MaichBlack wrote:alma1 wrote:And the bubble officially begins. Suraya have been forced to reduce the asking prices of their houses. And now they have to deal with higher financing costs!!! Ni kubaya!!! @MaichBlack which Suraya houses have lowered asking price?
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Rank: Member Joined: 5/28/2014 Posts: 149 Location: Nairobi
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itz wrote:MaichBlack wrote:alma1 wrote:And the bubble officially begins. Suraya have been forced to reduce the asking prices of their houses. And now they have to deal with higher financing costs!!! Ni kubaya!!! @MaichBlack which Suraya houses have lowered asking price? I'm also waiting with bated breath to hear this. When you live for others' opinions, you are dead.
- Carlos Slim Helu
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Rank: Member Joined: 12/7/2010 Posts: 520 Location: Epicentre - Ngamia 1
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alma1 wrote:PeterReborn wrote:MaichBlack wrote:murchr wrote:MaichBlack wrote:murchr wrote:Boris Boyka wrote:murchr wrote:Kwani Mortgages are not on a fixed rate? And why the hell are you taking a 30M loan? That building better be giving you back 1M monthly NO, NEVER! fixed rate is used on Short term asset loans like machinery and commercial cars. Unless you are in these group of Kenyans you need not a 30M loan @murchr - See the post above!!! 30 million, 3 million or 300k, the story is the same! Monthly payments up 54% pap!!! If the cost of leverage is passed to Mr Landlord, then he's about to pass the same to the one renting. Will never happen - The tenants will move! Most landlords are NOT servicing mortgages so they are not affected! There are only about 20,000 mortgage accounts in Kenya - and those cover owner occupier, office buildings, rentals etc. What that means is that as a landlord with a mortgage, you might be the only one with a mortgage in that neighbourhood!!! If you increase the rent, you will do it alone. Next thing you know, you will have Zero tenants!!! The demand for rental houses in Nairobi outweighs by far the supply and therefore the houses will still find tenants even with the increased rental fee. I think your analysis is clouded in denial. Come over I'll show you some houses for 40k that have yet to get tenants. Please understand the current dynamics. People can live far from Nairobi and still be happy. Some of the costs in rental units are bizarre to say the least. 50k + in south c to live in a house with no water. While hapo athi river 35k. I know many who have moved leaving the spaces to walalos and wannabies. As for commercial property. Has anyone taken a walk into Westlands lately? Every corner is a new commercial property. Rents 100 bob per square foot. How many of these new properties coming up in Westlands are fully let? None! Even if its drug money, hiyo pia huisha. Watch commercial properties keenly in that area. With financing going up by 50% what do you think the rents shall be? Who shall rent them when they can work from home. This phenomenon is not new in Kenya. It has happened wordlwide. If you love property that much, don't do it with a loan. Utalia. Na wameanza kulia. As for over priced tuburotis. Home Afrika is not a fluke. I know for a fact that these buroti companies are selling less than last year. That is why Kageni is shouting every day about land ending sijui next year. Their marketing departments are in agony trying everything to sell them. Now they are on shosho mendia. Don't listen to hass consult. Just ask yourself if you are happy buying a 1/8th buroti for 5million. If you are, the bubble has yet to burst. @ MaichB, I totally agree with you on Westlands commercial properties. Walked into The Oval a few months ago and couldn't believe my eyes. The place had like 30-40% occupancy levels despite all the hype about the place. Landlords must be having sleepless nights, hakuna wateja!!! Build your own dreams, or someone else will hire you to build theirs - Farrah Gray.
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Is Taking a Mortgage the WORST Decision Ever??
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