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Is Taking a Mortgage the WORST Decision Ever??
Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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MaichBlack wrote:Impunity wrote:In mayuu countries Mogej rates are at 3 to 6%...hii yetu ya 23% and variable cant make it. Mark Zuckerberg got his mortgage at 1%. The rest of the Americans were getting theirs at between 2% and 4%. Giving a whole new meaning to "the" 1% Zukherburger gets mortgage for 1%???. Why can't he buy cash and the way he is worth 30+ billion Usd .ama ni mimi sielewi kitu? Ama in America you have to take mortgage no matter how rich you are??
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Rank: Elder Joined: 3/2/2009 Posts: 26,328 Location: Masada
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enyands wrote:MaichBlack wrote:Impunity wrote:In mayuu countries Mogej rates are at 3 to 6%...hii yetu ya 23% and variable cant make it. Mark Zuckerberg got his mortgage at 1%. The rest of the Americans were getting theirs at between 2% and 4%. Giving a whole new meaning to "the" 1% Zukherburger gets mortgage for 1%???. Why can't he buy cash and the way he is worth 30+ billion Usd .ama ni mimi sielewi kitu? Ama in America you have to take mortgage no matter how rich you are?? Why take a loan to buy a house whn he can use someone else money to buy the house and invest his own money elsewhere? Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Elder Joined: 9/19/2015 Posts: 2,871 Location: hapo
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I always laugh when people try to downplay economic reality with patriotic messages. Math don't lie. You can't continue pouring money into real estate investments when the market has obviously gone down from the heady days of buying a plot for 100k and selling it for 500k after 2 years. Those days are dead and buried. You have to add value to land in order to reap any benefits thereby increasing your capital exposure in the short run in the hope that one day the "southern bypass" shall be built near here and property values shall shoot up as Maina Kageni would say. I have personally suffered from property flat lines. Even stock declines. Even had my portfolio wiped out in one day in the stock market...Something called the tech boom. So excuse me if I happen to be very cautious and like walking around rather than reading reports from people's who's main business idea is to sell someone else a house. If they really believed in their own hype, they would hold on to the property and wait rather than pass it off to the gullible "investor". If you want to test my theory, just put a for sale sign on your property today. Then advise us accordingly on this thread. I love learning new things every day and would very gladly take back all I have said. Thieves are not good people. Tumeelewana?
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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Impunity wrote:enyands wrote:MaichBlack wrote:Impunity wrote:In mayuu countries Mogej rates are at 3 to 6%...hii yetu ya 23% and variable cant make it. Mark Zuckerberg got his mortgage at 1%. The rest of the Americans were getting theirs at between 2% and 4%. Giving a whole new meaning to "the" 1% Zukherburger gets mortgage for 1%???. Why can't he buy cash and the way he is worth 30+ billion Usd .ama ni mimi sielewi kitu? Ama in America you have to take mortgage no matter how rich you are?? Why take a loan to buy a house whn he can use someone else money to buy the house and invest his own money elsewhere? What do you mean invest somewhere ? The dude has 30 billions .20 million dollars mortgage is just some shitty pocket change . Anyway still remains I don't get it . With the little accounts I have is, a house fully paid for is an asset since you can use it to take a collateral for a loan . But a payment plan for a house ama mortgage is a liability since you have to Pay it off for 30 yrs to be free. So is he better off having an asset ama liability? Knowing that he has 2 billion in liquid cash somewhere .I still don't get it ?
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Rank: Member Joined: 8/27/2010 Posts: 495 Location: Nairobi
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enyands wrote:What do you mean invest somewhere ? The dude has 30 billions .20 million dollars mortgage is just some shitty pocket change . Anyway still remains I don't get it . With the little accounts I have is, a house fully paid for is an asset since you can use it to take a collateral for a loan . But a payment plan for a house ama mortgage is a liability since you have to Pay it off for 30 yrs to be free. So is he better off having an asset ama liability? Knowing that he has 2 billion in liquid cash somewhere .I still don't get it ? It's actually very simple; the wealthy allow their money to work for them. Zuckerberg is probably getting around 3% returns on his fortune (I seriously doubt he even has $2m cash), each and every year. Stupidity would be to blow cash on his house when he can finance it at 1%. Do the math. Sent from my Black Nokia 3310
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Rank: User Joined: 8/15/2013 Posts: 13,237 Location: Vacuum
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Ash Ock wrote:enyands wrote:What do you mean invest somewhere ? The dude has 30 billions .20 million dollars mortgage is just some shitty pocket change . Anyway still remains I don't get it . With the little accounts I have is, a house fully paid for is an asset since you can use it to take a collateral for a loan . But a payment plan for a house ama mortgage is a liability since you have to Pay it off for 30 yrs to be free. So is he better off having an asset ama liability? Knowing that he has 2 billion in liquid cash somewhere .I still don't get it ? It's actually very simple; the wealthy allow their money to work for them. Zuckerberg is probably getting around 3% returns on his fortune (I seriously doubt he even has $2m cash), each and every year. Stupidity would be to blow cash on his house when he can finance it at 1%. Do the math. Ditto! If Obiero did it, Who Am I?
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Rank: Chief Joined: 5/9/2007 Posts: 13,095
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enyands wrote:MaichBlack wrote:Impunity wrote:In mayuu countries Mogej rates are at 3 to 6%...hii yetu ya 23% and variable cant make it. Mark Zuckerberg got his mortgage at 1%. The rest of the Americans were getting theirs at between 2% and 4%. Giving a whole new meaning to "the" 1% Zukherburger gets mortgage for 1%???. Why can't he buy cash and the way he is worth 30+ billion Usd .ama ni mimi sielewi kitu? Ama in America you have to take mortgage no matter how rich you are?? Ni wewe huelewi...But you can read the article and get an idea. Quote:Because it costs him absolutely nothing. “When you can borrow at an interest rate that’s below the rate of inflation you’re essentially borrowing for free,” says Greg McBride, senior analyst at Bankrate.com. a Florida-based firm that tracks interest rates on mortgages, auto loans, and credit cards, among others. “When you can borrow for free, there’s no sense in tying up your own money, when you can use that money for more profitable things.”
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Rank: Chief Joined: 5/9/2007 Posts: 13,095
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Ash Ock wrote:enyands wrote:What do you mean invest somewhere ? The dude has 30 billions .20 million dollars mortgage is just some shitty pocket change . Anyway still remains I don't get it . With the little accounts I have is, a house fully paid for is an asset since you can use it to take a collateral for a loan . But a payment plan for a house ama mortgage is a liability since you have to Pay it off for 30 yrs to be free. So is he better off having an asset ama liability? Knowing that he has 2 billion in liquid cash somewhere .I still don't get it ? It's actually very simple; the wealthy allow their money to work for them. Zuckerberg is probably getting around 3% returns on his fortune (I seriously doubt he even has $2m cash), each and every year. Stupidity would be to blow cash on his house when he can finance it at 1%. Do the math. Exactly...Plus if he died in course of the 30 years(God forbid) his family will still have the house plus the money. If he bought it in cash, the family would only be left with the house and the billions would be gone forever.  Ama majuu mortgages are not insured?
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Rank: Veteran Joined: 7/3/2007 Posts: 1,634
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washiku wrote:Ash Ock wrote:enyands wrote:What do you mean invest somewhere ? The dude has 30 billions .20 million dollars mortgage is just some shitty pocket change . Anyway still remains I don't get it . With the little accounts I have is, a house fully paid for is an asset since you can use it to take a collateral for a loan . But a payment plan for a house ama mortgage is a liability since you have to Pay it off for 30 yrs to be free. So is he better off having an asset ama liability? Knowing that he has 2 billion in liquid cash somewhere .I still don't get it ? It's actually very simple; the wealthy allow their money to work for them. Zuckerberg is probably getting around 3% returns on his fortune (I seriously doubt he even has $2m cash), each and every year. Stupidity would be to blow cash on his house when he can finance it at 1%. Do the math. Exactly...Plus if he died in course of the 30 years(God forbid) his family will still have the house plus the money. If he bought it in cash, the family would only be left with the house and the billions would be gone forever. Ama majuu mortgages are not insured? For someone like Zuckerbug a mortgage is not a liability. It is actually a tax reduction asset. In mayuu, you get all sorts of tax benefits from carrying a mortgage as well as deductions on capital gains if you sell at a loss. Wapi Kiash afafanue hii maneno? "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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Swenani wrote:Ash Ock wrote:enyands wrote:What do you mean invest somewhere ? The dude has 30 billions .20 million dollars mortgage is just some shitty pocket change . Anyway still remains I don't get it . With the little accounts I have is, a house fully paid for is an asset since you can use it to take a collateral for a loan . But a payment plan for a house ama mortgage is a liability since you have to Pay it off for 30 yrs to be free. So is he better off having an asset ama liability? Knowing that he has 2 billion in liquid cash somewhere .I still don't get it ? It's actually very simple; the wealthy allow their money to work for them. Zuckerberg is probably getting around 3% returns on his fortune (I seriously doubt he even has $2m cash), each and every year. Stupidity would be to blow cash on his house when he can finance it at 1%. Do the math. Ditto! He could even be better of if he rented instead of buying. Why buy a cow when all you need is milk.
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Rank: Elder Joined: 7/22/2009 Posts: 7,455
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hardwood wrote:Swenani wrote:Ash Ock wrote:enyands wrote:What do you mean invest somewhere ? The dude has 30 billions .20 million dollars mortgage is just some shitty pocket change . Anyway still remains I don't get it . With the little accounts I have is, a house fully paid for is an asset since you can use it to take a collateral for a loan . But a payment plan for a house ama mortgage is a liability since you have to Pay it off for 30 yrs to be free. So is he better off having an asset ama liability? Knowing that he has 2 billion in liquid cash somewhere .I still don't get it ? It's actually very simple; the wealthy allow their money to work for them. Zuckerberg is probably getting around 3% returns on his fortune (I seriously doubt he even has $2m cash), each and every year. Stupidity would be to blow cash on his house when he can finance it at 1%. Do the math. Ditto! He could even be better of if he rented instead of buying. Why buy a cow when all you need is milk. No need to rent. When you get a mortgage at 1%, the monthly loan repayments will definitely be lower than the rent. Plus you get to keep the house. And as someone points out, in the US you can tax deduct all sort of things including your car, laptop, phone etc. if you can somehow prove it helps you in one way or the other in your business. Showing how your house is helpful in running your business is child's play. Even having a home office and holding some meetings in the said house must be enough. That is why the top 1% (Including the likes of Mitt Romney) pay relatively lower taxes than the other 99%. They know how to play the system. 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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Rank: Elder Joined: 3/2/2009 Posts: 26,328 Location: Masada
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In Kenya, will insurance company pay your Morgage balance if you TX at say 5 years for 25 year Morgage? Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Member Joined: 8/27/2010 Posts: 495 Location: Nairobi
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alma1 wrote:I always laugh when people try to downplay economic reality with patriotic messages. Math don't lie.
You can't continue pouring money into real estate investments when the market has obviously gone down from the heady days of buying a plot for 100k and selling it for 500k after 2 years. Those days are dead and buried.
You have to add value to land in order to reap any benefits thereby increasing your capital exposure in the short run in the hope that one day the "southern bypass" shall be built near here and property values shall shoot up as Maina Kageni would say.
I have personally suffered from property flat lines. Even stock declines. Even had my portfolio wiped out in one day in the stock market...Something called the tech boom. So excuse me if I happen to be very cautious and like walking around rather than reading reports from people's who's main business idea is to sell someone else a house. If they really believed in their own hype, they would hold on to the property and wait rather than pass it off to the gullible "investor".
If you want to test my theory, just put a for sale sign on your property today. Then advise us accordingly on this thread. I love learning new things every day and would very gladly take back all I have said. A very small sampling: Anyone gone to The Hub lately? Just next to The Hub, on the right when you're facing the entrance, there's a compound of houses which stalled over two years ago. No buyers off-plan. Near St. Hannah's school, a new compound of 8 houses was put up for sale a couple of years ago. 3 are occupied (rented), the rest empty. Not a single one has been sold. A 1 acre plot for sale @40m remains unsold 2 years down the line. Miotoni, 5 acres "ripe for development", remains unsold 2 years down the line. A few weeks back, kanjo were very busy in Karen cutting down advertisements of Knight Frank and others, after massive complaints. I could go on and on but I think that suffices. As Alma writes, there's a major problem and the likes of Hassconsult / Knight Frank / banks (trace the money trail of the three collapsed banks) are glossing have to gloss over the reality. After independence, the Kenyan property bubble seems to have a 12-14 year cycle until one can't find the greater fool. We're at the end of a 14 year cycle. Sent from my Black Nokia 3310
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Rank: Veteran Joined: 1/20/2011 Posts: 1,820 Location: Nakuru
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Meanwhile in Great BritainDumb money becomes dumb only when it listens to smart money
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Rank: Member Joined: 5/28/2014 Posts: 149 Location: Nairobi
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Ash Ock wrote:alma1 wrote:I always laugh when people try to downplay economic reality with patriotic messages. Math don't lie.
You can't continue pouring money into real estate investments when the market has obviously gone down from the heady days of buying a plot for 100k and selling it for 500k after 2 years. Those days are dead and buried.
You have to add value to land in order to reap any benefits thereby increasing your capital exposure in the short run in the hope that one day the "southern bypass" shall be built near here and property values shall shoot up as Maina Kageni would say.
I have personally suffered from property flat lines. Even stock declines. Even had my portfolio wiped out in one day in the stock market...Something called the tech boom. So excuse me if I happen to be very cautious and like walking around rather than reading reports from people's who's main business idea is to sell someone else a house. If they really believed in their own hype, they would hold on to the property and wait rather than pass it off to the gullible "investor".
If you want to test my theory, just put a for sale sign on your property today. Then advise us accordingly on this thread. I love learning new things every day and would very gladly take back all I have said. A very small sampling: Anyone gone to The Hub lately? Just next to The Hub, on the right when you're facing the entrance, there's a compound of houses which stalled over two years ago. No buyers off-plan. Near St. Hannah's school, a new compound of 8 houses was put up for sale a couple of years ago. 3 are occupied (rented), the rest empty. Not a single one has been sold. A 1 acre plot for sale @40m remains unsold 2 years down the line. Miotoni, 5 acres "ripe for development", remains unsold 2 years down the line. A few weeks back, kanjo were very busy in Karen cutting down advertisements of Knight Frank and others, after massive complaints. I could go on and on but I think that suffices. As Alma writes, there's a major problem and the likes of Hassconsult / Knight Frank / banks (trace the money trail of the three collapsed banks) are glossing have to gloss over the reality. After independence, the Kenyan property bubble seems to have a 12-14 year cycle until one can't find the greater fool. We're at the end of a 14 year cycle. Prices are on the ridiculous side...hopefully those developers were not desperate for money. I often wonder about the people who happily pay 75M for houses on half acres then I tell myself to stick to my lane. Plots for 200k still have buyers. We love land, and we generally can't afford it, so the 200k plot will soothe our souls. When you live for others' opinions, you are dead.
- Carlos Slim Helu
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Rank: Elder Joined: 7/23/2008 Posts: 3,017
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DBLyon wrote:Ash Ock wrote:alma1 wrote:I always laugh when people try to downplay economic reality with patriotic messages. Math don't lie.
You can't continue pouring money into real estate investments when the market has obviously gone down from the heady days of buying a plot for 100k and selling it for 500k after 2 years. Those days are dead and buried.
You have to add value to land in order to reap any benefits thereby increasing your capital exposure in the short run in the hope that one day the "southern bypass" shall be built near here and property values shall shoot up as Maina Kageni would say.
I have personally suffered from property flat lines. Even stock declines. Even had my portfolio wiped out in one day in the stock market...Something called the tech boom. So excuse me if I happen to be very cautious and like walking around rather than reading reports from people's who's main business idea is to sell someone else a house. If they really believed in their own hype, they would hold on to the property and wait rather than pass it off to the gullible "investor".
If you want to test my theory, just put a for sale sign on your property today. Then advise us accordingly on this thread. I love learning new things every day and would very gladly take back all I have said. A very small sampling: Anyone gone to The Hub lately? Just next to The Hub, on the right when you're facing the entrance, there's a compound of houses which stalled over two years ago. No buyers off-plan. Near St. Hannah's school, a new compound of 8 houses was put up for sale a couple of years ago. 3 are occupied (rented), the rest empty. Not a single one has been sold. A 1 acre plot for sale @40m remains unsold 2 years down the line. Miotoni, 5 acres "ripe for development", remains unsold 2 years down the line. A few weeks back, kanjo were very busy in Karen cutting down advertisements of Knight Frank and others, after massive complaints. I could go on and on but I think that suffices. As Alma writes, there's a major problem and the likes of Hassconsult / Knight Frank / banks (trace the money trail of the three collapsed banks) are glossing have to gloss over the reality. After independence, the Kenyan property bubble seems to have a 12-14 year cycle until one can't find the greater fool. We're at the end of a 14 year cycle. Prices are on the ridiculous side...hopefully those developers were not desperate for money. I often wonder about the people who happily pay 75M for houses on half acres then I tell myself to stick to my lane. Plots for 200k still have buyers. We love land, and we generally can't afford it, so the 200k plot will soothe our souls. Very true, I do believe the bubble is here with us. atleast at the top end of the spectrum. I would also question the intelligence of someone still busy buying plots for speculation. "The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
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Rank: Veteran Joined: 7/3/2007 Posts: 1,634
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Obi 1 Kanobi wrote:DBLyon wrote:Ash Ock wrote:alma1 wrote:I always laugh when people try to downplay economic reality with patriotic messages. Math don't lie.
You can't continue pouring money into real estate investments when the market has obviously gone down from the heady days of buying a plot for 100k and selling it for 500k after 2 years. Those days are dead and buried.
You have to add value to land in order to reap any benefits thereby increasing your capital exposure in the short run in the hope that one day the "southern bypass" shall be built near here and property values shall shoot up as Maina Kageni would say.
I have personally suffered from property flat lines. Even stock declines. Even had my portfolio wiped out in one day in the stock market...Something called the tech boom. So excuse me if I happen to be very cautious and like walking around rather than reading reports from people's who's main business idea is to sell someone else a house. If they really believed in their own hype, they would hold on to the property and wait rather than pass it off to the gullible "investor".
If you want to test my theory, just put a for sale sign on your property today. Then advise us accordingly on this thread. I love learning new things every day and would very gladly take back all I have said. A very small sampling: Anyone gone to The Hub lately? Just next to The Hub, on the right when you're facing the entrance, there's a compound of houses which stalled over two years ago. No buyers off-plan. Near St. Hannah's school, a new compound of 8 houses was put up for sale a couple of years ago. 3 are occupied (rented), the rest empty. Not a single one has been sold. A 1 acre plot for sale @40m remains unsold 2 years down the line. Miotoni, 5 acres "ripe for development", remains unsold 2 years down the line. A few weeks back, kanjo were very busy in Karen cutting down advertisements of Knight Frank and others, after massive complaints. I could go on and on but I think that suffices. As Alma writes, there's a major problem and the likes of Hassconsult / Knight Frank / banks (trace the money trail of the three collapsed banks) are glossing have to gloss over the reality. After independence, the Kenyan property bubble seems to have a 12-14 year cycle until one can't find the greater fool. We're at the end of a 14 year cycle. Prices are on the ridiculous side...hopefully those developers were not desperate for money. I often wonder about the people who happily pay 75M for houses on half acres then I tell myself to stick to my lane. Plots for 200k still have buyers. We love land, and we generally can't afford it, so the 200k plot will soothe our souls. Very true, I do believe the bubble is here with us. atleast at the top end of the spectrum. I would also question the intelligence of someone still busy buying plots for speculation. If this burst does happen, expect Dr Opus Dei to share some of the blame. His crackdown on banks, especially KYC, is making it virtually impossible to launder stolen money. Most of it was being cleaned through real estate, including the 75M houses you mentioned above. As a result you can now expect there are some pretty heavily stuffed mattresses around. The weak underbelly of the Kenyan economy is corruption, but it is also its driving engine. What to do? "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: 3/19/2010 Posts: 3,504 Location: Uganda
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Obi 1 Kanobi wrote:DBLyon wrote:Ash Ock wrote:alma1 wrote:I always laugh when people try to downplay economic reality with patriotic messages. Math don't lie.
You can't continue pouring money into real estate investments when the market has obviously gone down from the heady days of buying a plot for 100k and selling it for 500k after 2 years. Those days are dead and buried.
You have to add value to land in order to reap any benefits thereby increasing your capital exposure in the short run in the hope that one day the "southern bypass" shall be built near here and property values shall shoot up as Maina Kageni would say.
I have personally suffered from property flat lines. Even stock declines. Even had my portfolio wiped out in one day in the stock market...Something called the tech boom. So excuse me if I happen to be very cautious and like walking around rather than reading reports from people's who's main business idea is to sell someone else a house. If they really believed in their own hype, they would hold on to the property and wait rather than pass it off to the gullible "investor".
If you want to test my theory, just put a for sale sign on your property today. Then advise us accordingly on this thread. I love learning new things every day and would very gladly take back all I have said. A very small sampling: Anyone gone to The Hub lately? Just next to The Hub, on the right when you're facing the entrance, there's a compound of houses which stalled over two years ago. No buyers off-plan. Near St. Hannah's school, a new compound of 8 houses was put up for sale a couple of years ago. 3 are occupied (rented), the rest empty. Not a single one has been sold. A 1 acre plot for sale @40m remains unsold 2 years down the line. Miotoni, 5 acres "ripe for development", remains unsold 2 years down the line. A few weeks back, kanjo were very busy in Karen cutting down advertisements of Knight Frank and others, after massive complaints. I could go on and on but I think that suffices. As Alma writes, there's a major problem and the likes of Hassconsult / Knight Frank / banks (trace the money trail of the three collapsed banks) are glossing have to gloss over the reality. After independence, the Kenyan property bubble seems to have a 12-14 year cycle until one can't find the greater fool. We're at the end of a 14 year cycle. Prices are on the ridiculous side...hopefully those developers were not desperate for money. I often wonder about the people who happily pay 75M for houses on half acres then I tell myself to stick to my lane. Plots for 200k still have buyers. We love land, and we generally can't afford it, so the 200k plot will soothe our souls. Very true, I do believe the bubble is here with us. atleast at the top end of the spectrum. I would also question the intelligence of someone still busy buying plots for speculation. the hype has devolved to the counties. land price are flying.plots selling 100000 two years ago near a shopping centre now going at 600000. i need to slap myself for not getting more then punda amecheka
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Rank: New-farer Joined: 1/14/2016 Posts: 12 Location: here and there
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I have been following recent property news in Nairobi and i can't stop wondering what could have happened to nextgen along mombasa road near Eko hotel.
Could it have stalled or was it a victim of imperial bank easy money?
What do wazuans think?
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