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Is Taking a Mortgage the WORST Decision Ever??
Rank: New-farer Joined: 4/8/2015 Posts: 42
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I hope he does not work in Nairobi CBD and gets carried away by the "I live in my own house" myth/pressure: because he will end up with golden handcuffs. Extra transport (fuel, commuting) costs, time spent in jam (very costly in terms of fatigue, work forfeited and family)
He can "invest" the 2m especially since he already owns the land. At 12% net from the numerous options, he would already be supplementing his rent by some 20k per month. And building this kitty so that he can live 'freely' whether in rental or own house.
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Rank: Elder Joined: 4/30/2008 Posts: 6,029
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Rental rates are not 800k per month.
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Rank: Veteran Joined: 8/25/2012 Posts: 1,826
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Sevian wrote:I hope he does not work in Nairobi CBD and gets carried away by the "I live in my own house" myth/pressure: because he will end up with golden handcuffs. Extra transport (fuel, commuting) costs, time spent in jam (very costly in terms of fatigue, work forfeited and family)
He can "invest" the 2m especially since he already owns the land. At 12% net from the numerous options, he would already be supplementing his rent by some 20k per month. And building this kitty so that he can live 'freely' whether in rental or own house. what men is this generation raising, if a man can afford a house for the family you get them one, instead of coming home at 6 to compete with kids over who gets the remote, and to stare at the house-help and subject your kids to no space in a 2 bedroomed flat and embarrass your wife since the househelp can track everything the two of you do in the bedroom. but to each his own, I guess.
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Rank: Veteran Joined: 7/3/2007 Posts: 1,634
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hardwood wrote:sitaki.kujulikana wrote:wazuans are too political, fence sitting always wants to be on the safe side.
give @lidarmama friend advice.
My advice take the 2m get a fundi and put up a 3 bedroom bungalow basic finishes, take the family and get in, tell your friend everyday that passes they get old. Exactly. 500k for foundation, 400k for walling, 500k for roofing. He can use the balance of 600k to do some finishing and move in. If he is currently paying 30k rent that amount can buy him 40 bags of cement, lots of paint or 2 lorries of mawe to finish compound pole pole. Also many people mistakenly believe that the first house you build or buy is the one you will live for the rest of your life. That is why they would want to buy their first house in runda, kileleshwa etc and since that is quite costly many lose hope of ever owning a house. The first house gets you on the property ladder and you can upgrade your neighbourhood (by saving and selling the house) as your income increases. Just like people upgrade their cars. Ultimately youll find yourself in runda. Good points. A related mistake people make, however, is the tendency to upgrade the house you rent as your income increases. This essentially postpones house ownership by reducing the money you can invest and lulling you into a sense of false comfort. One should aim to move to ownership as soon as possible, even if the house is not of your dreams. Staying in shabby rental, even you when can afford better, is a powerful motivator - especially if you have a 'loving' wife or girlfriend to nag you along. "The opposite of a correct statement is a false statement. But the opposite of a profound truth may well be another profound truth." (Niels Bohr)
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Rank: Elder Joined: 7/28/2015 Posts: 9,562 Location: Rodi Kopany, Homa Bay
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Jenga nyumba: 
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Rank: New-farer Joined: 4/8/2015 Posts: 42
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Si lazima mtu ajenge nyumba. It's a myth. Lakini ni lazima u-invest. And the notion that you'll use that house to upgrade... another myth. Houses take eons to sell. The only option out of golden handcuffs is to build passive income.
If you could "save" 2m, you can continue with whatever you did to create 4 then 6 then 8 then 10... ad Infiniti. And invest it in shares, tbills and bonds with a conservative target of 10%. Anything on top of 10% reinvest. Now tell me if it will not free you from this "own house" golden handcuffs in Ketengela while you work in Westi; then you are transferred to Mombasa, etc etc.
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Rank: New-farer Joined: 4/8/2015 Posts: 42
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Sevian wrote:Si lazima mtu ajenge nyumba. It's a myth. Lakini ni lazima u-invest. And the notion that you'll use that house to upgrade... another myth. Houses take eons to sell. The only option out of golden handcuffs is to build passive income.
If you could "save" 2m, you can continue with whatever you did to create 4 then 6 then 8 then 10... ad Infiniti. And invest it in shares, tbills and bonds with a conservative target of 10%. Anything on top of 10% reinvest. Now tell me if it will not free you from this "own house" golden handcuffs in Ketengela while you work in Westi; then you are transferred to Mombasa, etc etc. But land, by all means buy: so you can later sell to the younger siblings of those advising you to build. Then use the money to create more income. I come you can leverage to subsidise living cost or house acquisition costs. Then going to Karen (or any othe leafy surburb) becomes child play. Passive income paying mortgage beats being trapped in Kitengela any day.
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Rank: Member Joined: 12/2/2009 Posts: 299 Location: kenya
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I speak out of experience.I did a flat along Thika road sometimes before the highway was done.Thats was sometimes back in 2009.It was my first project and I was really excited.I use to get offers of land along the highway and the Eastern bypass,that I could readily afford with the money's I was using constructing.Fast forward 2013.The house was done guaranting me passive 250k p.m.but I can assure today I wish I bought land with all the 15m I used.id be worth more than 400m going by the value of the land I dissed those days. I would be doing same house from sales proceeds and believe you me I'd be having four or more flats of what I have now.Any young man shud invest in premium lands and not rush into building.My two cents
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Rank: Member Joined: 8/5/2011 Posts: 125
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popat wrote:I speak out of experience.I did a flat along Thika road sometimes before the highway was done.Thats was sometimes back in 2009.It was my first project and I was really excited.I use to get offers of land along the highway and the Eastern bypass,that I could readily afford with the money's I was using constructing.Fast forward 2013.The house was done guaranting me passive 250k p.m.but I can assure today I wish I bought land with all the 15m I used.id be worth more than 400m going by the value of the land I dissed those days. I would be doing same house from sales proceeds and believe you me I'd be having four or more flats of what I have now.Any young man shud invest in premium lands and not rush into building.My two cents What was the average annual appreciation rate for land in that area between when you bought and 2013? Is this appreciation only dependent on infrastructure (in this case Thika road) or its a norm?
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Rank: Veteran Joined: 8/25/2012 Posts: 1,826
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whats the need going to Karen when you are 70 years, things will always improve and there is always a better investment opportunity tomorrow.
But remember there is today and if you do not value today, tomorrow will be of no value.
Careful, even those who are married might claim if only they waited a little longer they would have gotten a more beautiful girl.
now you are complaining that you would be worth more than 400m instead of the measly 250k pm, but remember if you are not content with 250k now even if you had 400m you would still be envious of the billions you might have made if only you put up a kihingo.
If you have a plot and 2m build the house, if using 2m will stop you from becoming a multi milionare in future you would never have become.
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Rank: Member Joined: 1/22/2015 Posts: 682
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People claim that a house will give you stability, but from my experience, the one thing that brings true stability is owning an income generating asset, aka a kabiashara. Young people should aim for this first and foremost, then with the resulting profits, deploy in whatever house you can afford, with cash or mortgage, whatever. Otherwise having a large liability such as a house hanging over your head with only a salary is a recipe for high blood pressure.
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Rank: Veteran Joined: 4/27/2010 Posts: 951 Location: Nyumbani
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hardwood wrote:Ericsson wrote:Service charge is normally maximum 10% of the rent Therefore @waigooroo is paying 80k service charge coz rent at Kihingo is 800k pm. I hope it was her house, how can one pay 800k for rent? better buy the house. How much is one supposed to earn so as to pay such rent ? above 1.5m coz you cannot drive a useless car living in such a neighbourhood. Ngai fafa kweli watu wana pesa.Za kuiba coz i do not see how one can spend such a sum from your sweat.
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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Mike Ock wrote:People claim that a house will give you stability, but from my experience, the one thing that brings true stability is owning an income generating asset, aka a kabiashara. Young people should aim for this first and foremost, then with the resulting profits, deploy in whatever house you can afford, with cash or mortgage, whatever. Otherwise having a large liability such as a house hanging over your head with only a salary is a recipe for high blood pressure.  thank you . Umenena
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Rank: Elder Joined: 7/28/2015 Posts: 9,562 Location: Rodi Kopany, Homa Bay
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Housing is a basic need and he will always need one whether he rents or builds. He can continue renting one, whereby assuming he's currently paying 40k rent for a 2 or 3 bdrm, he'll have paid 2m in rent in 4yrs, and own zero house. He can choose to start building with the 2m he has now and move in and save on rent which he can be saving and investing elsewhere. NB. 2m can do the ground floor of a maisonette and he moves in. The ground floor will have a living rm, kitchen, bedroom (guest), dining rm (can be used a temporary bedroom 2). Also people should stop hating on kitengela. Those who have been to chuna, milimani areas etc of kitengela know that some of the houses there rival those in runda. Eg http://www.olx.co.ke/ad/...IDT2Y5u.html#1c37444dc5
 or http://www.olx.co.ke/ad/...IDUS64q.html#5387f2241d
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Rank: Elder Joined: 6/23/2009 Posts: 13,516 Location: nairobi
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hardwood wrote:Housing is a basic need and he will always need one whether he rents or builds. He can continue renting one, whereby assuming he's currently paying 40k rent for a 2 or 3 bdrm, he'll have paid 2m in rent in 4yrs, and own zero house. He can choose to start building with the 2m he has now and move in and save on rent which he can be saving and investing elsewhere. NB. 2m can do the ground floor of a maisonette and he moves in. The ground floor will have a living rm, kitchen, bedroom (guest), dining rm (can be used a temporary bedroom 2). Also people should stop hating on kitengela. Those who have been to chuna, milimani areas etc of kitengela know that some of the houses there rival those in runda. Eg http://www.olx.co.ke/ad/...IDT2Y5u.html#1c37444dc5
or http://www.olx.co.ke/ad/...IDUS64q.html#5387f2241d
I have a running court case since 2009.. Nikiskia Kitengela ndio BP inapanda
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: 8/25/2012 Posts: 1,826
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Mike Ock wrote:People claim that a house will give you stability, but from my experience, the one thing that brings true stability is owning an income generating asset, aka a kabiashara. Young people should aim for this first and foremost, then with the resulting profits, deploy in whatever house you can afford, with cash or mortgage, whatever. Otherwise having a large liability such as a house hanging over your head with only a salary is a recipe for high blood pressure. To most people a salary / a job is the profit/money generating asset from their investments in education and other skill sets.
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Rank: Member Joined: 6/9/2009 Posts: 85
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hardwood wrote:Ericsson wrote:Service charge is normally maximum 10% of the rent Therefore @waigooroo is paying 80k service charge coz rent at Kihingo is 800k pm. Back in 2010 the service charge was 27k which was about 5% of the 520k rent then. Link"The cost of the three types of houses — the five-bedroom, the four-bedroom large and four-bedroom small, all en-suites — ranges between Sh120 million to Sh72 million. A monthly service fee of Sh27,000 is charged.
"To rent a house here will cost you between US$4,500-6,000 (Sh520,000) a month depending on the size of the house," reveals an official residing here," said the management at Kihingo Holdings. All the 55 houses built in the first phase will be ready for occupation in the next few months."
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Rank: New-farer Joined: 4/8/2015 Posts: 42
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hardwood wrote:Housing is a basic need and he will always need one whether he rents or builds. He can continue renting one, whereby assuming he's currently paying 40k rent for a 2 or 3 bdrm, he'll have paid 2m in rent in 4yrs, and own zero house. He can choose to start building with the 2m he has now and move in and save on rent which he can be saving and investing elsewhere. NB. 2m can do the ground floor of a maisonette and he moves in. The ground floor will have a living rm, kitchen, bedroom (guest), dining rm (can be used a temporary bedroom 2). Also people should stop hating on kitengela. Those who have been to chuna, milimani areas etc of kitengela know that some of the houses there rival those in runda. Eg http://www.olx.co.ke/ad/...IDT2Y5u.html#1c37444dc5
or http://www.olx.co.ke/ad/...IDUS64q.html#5387f2241d
Listen to this Kenyan claim houses in Kite rival those in Runda. Surely you must know that the value of a house consists mostly of the environment first (location, location, location: 1st three rules o real estate). Or maybe I should let you wallow in your own slice of imagined heaven. It's a personal thing, I suppose
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Rank: New-farer Joined: 2/14/2015 Posts: 97 Location: Kenya
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popat wrote:I speak out of experience.I did a flat along Thika road sometimes before the highway was done.Thats was sometimes back in 2009.It was my first project and I was really excited.I use to get offers of land along the highway and the Eastern bypass,that I could readily afford with the money's I was using constructing.Fast forward 2013.The house was done guaranting me passive 250k p.m.but I can assure today I wish I bought land with all the 15m I used.id be worth more than 400m going by the value of the land I dissed those days. I would be doing same house from sales proceeds and believe you me I'd be having four or more flats of what I have now.Any young man shud invest in premium lands and not rush into building.My two cents With kids grown up and out of house, I am considering selling my maisonette in a quarter (1/4) acre piece of land that can fetch 15 million and sell some plots to construct a flat/apartment complex in a good neighbourhood that can give me a passive income of at least 300K/month. I am happy living in the Penthouse. This income would give me financial freedom and liberate me from 8-5 job, thereby enjoy life more abundantly - maybe just travel, enjoy hobbies etc. Your thoughts - is this a wise idea or bad idea? Any downsides?
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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Xymalos wrote:popat wrote:I speak out of experience.I did a flat along Thika road sometimes before the highway was done.Thats was sometimes back in 2009.It was my first project and I was really excited.I use to get offers of land along the highway and the Eastern bypass,that I could readily afford with the money's I was using constructing.Fast forward 2013.The house was done guaranting me passive 250k p.m.but I can assure today I wish I bought land with all the 15m I used.id be worth more than 400m going by the value of the land I dissed those days. I would be doing same house from sales proceeds and believe you me I'd be having four or more flats of what I have now.Any young man shud invest in premium lands and not rush into building.My two cents With kids grown up and out of house, I am considering selling my maisonette in a quarter (1/4) acre piece of land that can fetch 15 million and sell some plots to construct a flat/apartment complex in a good neighbourhood that can give me a passive income of at least 300K/month. I am happy living in the Penthouse. This income would give me financial freedom and liberate me from 8-5 job, thereby enjoy life more abundantly - maybe just travel, enjoy hobbies etc. Your thoughts - is this a wise idea or bad idea? Any downsides? Who wouldn't want to be financially free . There is no downside in this .instead of working for someone you can spend your time perusing what you love doing best . I would do the same with a heart beat. Be philanthropist and enjoy retirement early . All the best
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