Wazua
»
Investor
»
Property
»
Is Taking a Mortgage the WORST Decision Ever??
Rank: Elder Joined: 7/22/2009 Posts: 7,842
|
Link: Lavington Flats Auction.Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
|
|
|
Rank: Member Joined: 8/5/2011 Posts: 125
|
@maichblack... this is misleading, viv a vis the topic being discussed
|
|
|
Rank: Elder Joined: 7/21/2010 Posts: 6,194 Location: nairobi
|
kiwaru wrote:@maichblack... this is misleading, viv a vis the topic being discussed its a relevant subject to me. "Don't let the fear of losing be greater than the excitement of winning."
|
|
|
Rank: Member Joined: 8/5/2011 Posts: 125
|
mlennyma wrote:kiwaru wrote:@maichblack... this is misleading, viv a vis the topic being discussed its a relevant subject to me. I think its off... The article is with regards to a "failed" project, after which the bank and the developer are now trying to protect their interests. The failure did not result from the financing arrangement but probably due to wrong strategy (poor sales from numerous possibilities e.g. oversupply in the market) or realised risk (numerous in our economic context, and in that subsector) This thread, on the other hand, is about the options for financing home-ownership (not project) and the opportunity cost for those resources
|
|
|
Rank: Veteran Joined: 11/15/2013 Posts: 1,977 Location: Here
|
kiwaru wrote:mlennyma wrote:kiwaru wrote:@maichblack... this is misleading, viv a vis the topic being discussed its a relevant subject to me. I think its off... The article is with regards to a "failed" project, after which the bank and the developer are now trying to protect their interests. The failure did not result from the financing arrangement but probably due to wrong strategy (poor sales from numerous possibilities e.g. oversupply in the market) or realised risk (numerous in our economic context, and in that subsector) This thread, on the other hand, is about the options for financing home-ownership (not project) and the opportunity cost for those resources @kiwaru i would say you don't have a third eye. The principles, circumstances,terms &conditions are more else similar for mortgage!!! haha hehe so a "project" is not a "home /house" . pleease. Everybody STEALS, a THIEF is one who's CAUGHT stealing something of LITTLE VALUE. !!!
|
|
|
Rank: Member Joined: 8/5/2011 Posts: 125
|
Boris Boyka wrote:kiwaru wrote:mlennyma wrote:kiwaru wrote:@maichblack... this is misleading, viv a vis the topic being discussed its a relevant subject to me. I think its off... The article is with regards to a "failed" project, after which the bank and the developer are now trying to protect their interests. The failure did not result from the financing arrangement but probably due to wrong strategy (poor sales from numerous possibilities e.g. oversupply in the market) or realised risk (numerous in our economic context, and in that subsector) This thread, on the other hand, is about the options for financing home-ownership (not project) and the opportunity cost for those resources @kiwaru i would say you don't have a third eye. The principles, circumstances,terms &conditions are more else similar for mortgage!!! haha hehe so a "project" is not a "home /house" . pleease. I dont think so. The objective of a project defines the measure of success. A developer (Singh, et al) doing a block of apartments vs someone doing a mortgage for his/her own house? ...worlds apart my friend. Certain factors like peace of mind, sacrifices by other members of the family, unaccounted for costs when pursuing a "personal" project makes it different from the developer who registers a firm (company, partnership, etc), does a proposal, seeks funding and creates a project management system to initiate and run the project. In the "personal" project, the objective tends to be the off-setting of constant cost (rent) in light of the fact that one and one's own cannot live on a tree i.e. meeting a BASIC NEED. While building a block of flats, one would probably be looking at income through sales/rent (journey to SELF SUFFICIENCY / SELF ACTUALISATION) Have you not noticed that the biggest component of mortgages, esp new ones, are salary-backed - i.e. based on primary income. Most developers use cashflows from sales / existing or anticipated income from the same project. Ask any banker
|
|
|
Rank: Veteran Joined: 4/16/2014 Posts: 1,420 Location: Bohemian Grove
|
mlennyma wrote:kiwaru wrote:@maichblack... this is misleading, viv a vis the topic being discussed its a relevant subject to me. Sounds like they had taken an accelerated mortgage but the payments stalled midway.
|
|
|
Rank: Elder Joined: 7/22/2009 Posts: 7,842
|
@Kiwaru - How many nicely spaced (not extravagant) "standard" two bedroom units can you fit per floor in a 50 by100 plot. Other wazuans who have done it before can also contribute. Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
|
|
|
Rank: Member Joined: 6/17/2011 Posts: 229
|
Kihara joni wrote:MaichBlack wrote:I know a number of people believe taking a mortgage is good decision because it enables you to own a house using money you 'don't have' and pay for it slowly. I beg to differ in the strongest terms.
Let's talk numbers.
If you take a mortgage for 10 million at a rate of 15% repayable in 20 years, you will be paying Kshs. 131,678.96/= every month:-
=PMT(15%/12,20*12,10000000,0,0)
Now, in 20 years, you will have paid
131,678.96 * 12 * 20 = Kshs. 31,602,949.98
Will the house be worth 31 million in 20 years? Maybe, Maybe not. But that is not the basis of my argument!
Now, assuming you decided to be investing the money [while paying rent] what would you end up with?
Let's assume you use the 31k to pay rent [you cantop it up if you want] and then be investing the 100k monthly at an annual return of 25% [which many wazuans can do with their eyes closed!] your investment will be worth a whooping Kshs. 671,911,370.91/= in 20 years!!!
=FV(25%/12,20*12,-100000,0,0)
Which guy would you rather be???
25% wel that caught my eye, any threads on how to achieve 25% or even more than 12% am currently getting? @Kihara, investing in real estate and private equity can easily give you 25% or more per year in dividends, bonuses and capital gains.
|
|
|
Rank: Elder Joined: 7/11/2012 Posts: 5,222
|
eco wrote:Kihara joni wrote:MaichBlack wrote:I know a number of people believe taking a mortgage is good decision because it enables you to own a house using money you 'don't have' and pay for it slowly. I beg to differ in the strongest terms.
Let's talk numbers.
If you take a mortgage for 10 million at a rate of 15% repayable in 20 years, you will be paying Kshs. 131,678.96/= every month:-
=PMT(15%/12,20*12,10000000,0,0)
Now, in 20 years, you will have paid
131,678.96 * 12 * 20 = Kshs. 31,602,949.98
Will the house be worth 31 million in 20 years? Maybe, Maybe not. But that is not the basis of my argument!
Now, assuming you decided to be investing the money [while paying rent] what would you end up with?
Let's assume you use the 31k to pay rent [you cantop it up if you want] and then be investing the 100k monthly at an annual return of 25% [which many wazuans can do with their eyes closed!] your investment will be worth a whooping Kshs. 671,911,370.91/= in 20 years!!!
=FV(25%/12,20*12,-100000,0,0)
Which guy would you rather be???
25% wel that caught my eye, any threads on how to achieve 25% or even more than 12% am currently getting? @Kihara, investing in real estate and private equity can easily give you 25% or more per year in dividends, bonuses and capital gains. How?
|
|
|
Wazua
»
Investor
»
Property
»
Is Taking a Mortgage the WORST Decision Ever??
Forum Jump
You cannot post new topics in this forum.
You cannot reply to topics in this forum.
You cannot delete your posts in this forum.
You cannot edit your posts in this forum.
You cannot create polls in this forum.
You cannot vote in polls in this forum.
|