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Renting vs. Buying
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My 2 cents
#11 Posted : Friday, August 13, 2010 10:23:49 AM
Rank: Veteran

Joined: 6/2/2010
Posts: 1,091
@ Pablo, I actually bought property in 2005 for 8M. market price is know about 13/14M. So ia have made annualised retuns of about 10 -12% on the property. At the same time I have been buying stocks, and bought quite a lot last year when the market was down. the stocks I bought last years (all combined) are already at 70% gain.

So I am not just talking theory. I have real experience. Though i have necer ever regretted buying the property; it havs saved me rent for 5 years. I still sometimes wish I had sold it last year to buy even more stocks.

Now if my own experience above favours stocks despite the fact that my property was not leveraged at all; imagine what the comparison would be like if I had use leverage of about 14% p.a for the property. Stocks would have won ten times over......
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young
#12 Posted : Friday, August 13, 2010 3:24:43 PM
Rank: Elder

Joined: 6/20/2007
Posts: 2,075
Location: Lagos, Nigeria
@All,

If you say stocks is the best then you are wrong

If you say land is the best then you are wrong


If you say mixture of stocks and real estate then that is balanced and fair.

Real State
Look beyond plots, think of developing your land for rent to sell at a premium. Buy dipilated building renovate rent to appreciate and sell at a premium.

Stocks
Look at money and capital market in general. So split your investment into savings (Ksh / forex), bonds, fixed deposit, treasury bills.

It is also good if you can also invest in other markets, to leverage your risk.
My local bourse (Nigerian Stock Exchange
is current in a basic mess. Beyong global conomic meltdown first scandal in the financial sector , second allegation of fraud and consequent removal of the CEO of Nigerian Stock Exchange. Those that depended on Nigerian bourse
for years are in big trouble. Handful of us that diversified to other markets are luckier as the impact is minimal.

Just as you should not be married to a particular counter, 21st century equity investor should not be married to a particular stock exchange. Things are changing we need to change with the changing times.
The wazua spirit as members is to educate and inform and learn from others within the limit of what we know in any chosen area irrespective of our differences in tribes, nationalities, etc. .
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  | | Edit by user: Friday, August 13, 2010 3:41 PM | Reason: Not specified
tony stark
#13 Posted : Friday, August 13, 2010 4:56:22 PM
Rank: Veteran

Joined: 7/8/2008
Posts: 947
muganda wrote:
I personally just can't get enough of this issue - always turning in my mind. Just a quick reference to when it last came up...

Do our perspectives change with time?

Jun16, 2010 SHARES versus REAL ESTATE

Apr06, 2010 Best long run investment


This issue has been discussed for years to add to the list Am tired of paying rent
Has interesting insight from tusker baridi.
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tony stark
#14 Posted : Friday, August 13, 2010 5:08:14 PM
Rank: Veteran

Joined: 7/8/2008
Posts: 947
young wrote:
Have decided to diversify . I am considering :-

Stocks 60%

Property 40%

As usual I am digging deep to learn the nitty gritty of property investment and my horizon is African countries. Have pencilled down Nigeria (my country),Ghana and Uganda.

Nigeria Charity begins at home,is a familiar terrain

Ghana Imminent Economic Boom due to new oil discovery

Uganda Small Land Locked East African Country to watch in the future,petroleum producer in 2010. Good Economic growth propspects.

This purely my opinion.









AFRICAN INVESTOR

I have been digging through the very resourceful SK archives and i found this post written Sunday, April 26, 2009 5:53:00 PM and was titled What Have You Learnt From Global Stocks Slide?
I have a few question which I would be glad if you entertained them.

Have you succeeded in your diversification?

Have you diversified your property into Naija, Uganda and Kenya.

Out of curiosity is your "amazing" mutual fund manager still performing as well as he was 2-3 years ago?
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young
#15 Posted : Friday, August 13, 2010 5:30:58 PM
Rank: Elder

Joined: 6/20/2007
Posts: 2,075
Location: Lagos, Nigeria
@Tony Stark,

I believe you mean diversification instead of 100% stocks to real estate. I will tell you a capital YES is the success story so far.

Where ?
Strictly titled plots in Nigeria and neighbouring Ghana because of Proximity.

In Nigeria two cities Lagos (the former capital ) and Abuja (the current Capital).

In Ghana Accra (the capital city) and Tema (the
Port City).

GHANA
www.redrowghana.com
www.falconcrestghana.com

Because of limited funds I am into buying serviced plots at the moment hoping to develop or sale them in future. I always pick up installmental payment plans.

A good flash is suncity marketed by www.falconcrestghana.com at an offer price of USD 10,000 in 2009 (3 years payment plan) now goes for USD30,000 for new subscribers.

I only acquired a plot for holiday home in Kampala ie Kakungulu Satelite City marketed by www.akright.biz, and they will build our small bungalow for us (installmental plan) in years ahead. I have been priced out of Kenya, you understand what I mean.
The wazua spirit as members is to educate and inform and learn from others within the limit of what we know in any chosen area irrespective of our differences in tribes, nationalities, etc. .
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  | | Edit by user: Friday, August 13, 2010 5:38 PM | Reason: Not specified
young
#16 Posted : Friday, August 13, 2010 5:57:55 PM
Rank: Elder

Joined: 6/20/2007
Posts: 2,075
Location: Lagos, Nigeria
@ tony STARK

ON MANAGED FUNDS

My Ghana Accra managed fund managers Databank Group are still superb.

I first invested in this product called
EPACK (95% on equities in 11 African Countries)

I have also diversified into their
other products

MFUND (100% money market in Ghana)

BFUND (50% Equities in Afri countries , 50% Money market)

www.databankgroup.com

Be aware they are about to unvail the new site
but the old site wite with full info is still available.
The wazua spirit as members is to educate and inform and learn from others within the limit of what we know in any chosen area irrespective of our differences in tribes, nationalities, etc. .
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  | | Edit by user: Friday, August 13, 2010 6:31 PM | Reason: Not specified
tony stark
#17 Posted : Friday, August 13, 2010 7:17:34 PM
Rank: Veteran

Joined: 7/8/2008
Posts: 947
Asante sana for the insightful posts!!
Cheers
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young
#18 Posted : Friday, August 13, 2010 7:44:50 PM
Rank: Elder

Joined: 6/20/2007
Posts: 2,075
Location: Lagos, Nigeria

AN EXTRACT FROM MY POST IN 2009 RELEVANT TO THIS
TOPIC
Stock investment is my No1 but it is extremely perfect to back up with Real Estate. The most difficult thing with real estate especially in Africa is the fear of being conned especially if you are overseas,also the huge amount of Capital involved. But I have discovered that for a salary earner like me I can still decipher a reliable way to start small without being conned even without having huge capital.

To avoid being conned you have to see what you want to buy (by travelling there) and you must conduct due diligence to establish the authenticity of the land or house to buy. More importantly buy a house or serviced plot from a planned estate and don't cut corners (pay the right legal fees / commission) and follow due
diligence
The wazua spirit as members is to educate and inform and learn from others within the limit of what we know in any chosen area irrespective of our differences in tribes, nationalities, etc. .
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obiero
#19 Posted : Friday, August 13, 2010 8:20:26 PM
Rank: Elder

Joined: 6/23/2009
Posts: 14,318
Location: nairobi
this may be slightly off topic, but would it be advisable to own a car while renting a house? iv been considering this for some weeks but im in doubt of the appropriate financial decision..
COOP, IMH, KEGN, KQ, MTNU
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Mwafrika31
#20 Posted : Sunday, August 15, 2010 12:58:22 PM
Rank: New-farer

Joined: 6/18/2010
Posts: 95
mukiha wrote:
My 2 cents wrote:
....Sam and Tim both have the ability to invest Kshs 50,000 per month.

Sam takes out a morgage which eats into the entire Kshs. 50,000 each month.

Tim invests Kshs 30,000 each month without fail and rents for Kshs. 20,000.

With Real Estate appreciating only single digit figures over the longterm whereas stocks appreciate by double figures. I can bet you that if Tim remains disciplined, he will own stocks worth much more than Tim's house in the long term.

Which stocks is Tim investing in?

Would he have been savvy enough to buy ARM @ sh4.53 and EACBLS @ sh0.69 in year 2000 and cash out at sh156 and sh18.50 today?

Hindsight is such a good thing...

What if he had picked Kenol & Uchumi?

Oops!!!


You are right on the mark. In 2001 I invested in KQ which gained value and at the same time invested in Uchumi which lost all value. Buying into the stock market is gambling, too many unknowns. Anyway, buying a prebuilt home in Kenya right now is not wise since those houses are overvalued.

We saw this cycle in the states. It lasted a decade and the market painfully corrected leaving many with mortgages more expensive than the value of the houses being serviced. Best investment is government backed securities. Slow secure growth with minimal risk.
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