So yesternight as I was struggling to get some sleep after getting high on some cheap liquor, my mind wandered off to the world of landlords. I got curious to know what my landlord makes per month. This apartment block consists of 53 units, bedsitters, one bedrooms and two bedroom units. Rent going 10k for bedsitters, 16k for one bedrooms and 20k for two bedrooms…
Doing a quick math, letting average for all units be 15k, multiplied by 53 units, it comes to a whopping 795k!!! Let the 95k cater for ownership expenses. Motherf***** goes home with a whopping 700Gs every month! Man, that is some real good money for just one apartment block. I ain’t a real estate expert, but let me just assume the guy used 20 to 30M to raise the flats, 700Gs per month guarantees ROI.
I have been living here for the last 6 months or so, I can tell you for sure the units are ever full because they are well designed,i.e. modernized and are cheap in comparison to competing blocks. Sasa hapa ndio nilisema liwe liwalo, nitakuja kuwa landlord siku moja.
What if he borrowed all or some of that 20m he used to build those units. All of a sudden, it doesn’t look so rosy ha!!!
First lesson you need to learn is that there is nothing like Risk-free investing.
Such real estate investments usually have a payback period of 8 years minimum.Ukiongeza vacancies and running costs it can take as long as 12 years.
. That’s the minimum your landlord used unless he stole the building materials and grabbed the land on which it sits.
No story is ever smooth as you perceive it in your mind. If you don’t believe, just try to wade in that murky water then you’ll understand. And no, a modernized apartment containing the units you stated will not go for anything less than a hundred million, as I was told in a jaba den
He must have factored in his ROI, after paying off the loans or whatever he borrowed. Toa Basi 300k ya loan from hio 700gs, 400k per month is good money, yaani unalala tu 400 inaingia kwa account kila mwisho wa mwezi, bila stress
Every business is always good on paper. Anyway, where I stay a 1 bedroom goes for 25,000 and two bedroom 32,000 and they are always occupied. I did a quick math and the landlord pocket almost 1.8M per month, passive income.
I think this is too high. For a block in places like Kahawa, kasarani, umoja, dohnholm etc… I am based in Msa, so am giving you these examples because where I live is more or less the same as the mentioned places.
Banks have a lot of cash. And they invest it. Their most preferred mode is Treasury Bonds and selling property. If this business of renting was that easy, why are banks not in this business on a large scale. You people are forgetting to cost the Capital.
My elder bro bought a 1/4 acre land in 2012 at 2.5m cash somewhere in naks. He then Took a loan ya 7.5m, hizo zingine akatumia savings zake to build 35 units za 1 na 2br. After agent amechukua zake he pockets kitu 300k/ month which he is able to pay back with ile loan ya 7.5m na abakishe za mfuko. Watu wa bank waushinda wakijaribu kumsukumia doh aanzie project zingine. So yes, real estate iko sawa.
Very true … if you have viable project banks are more than willing to finance it. When i was working kuna client alikua na tu ploti apo pangani we used to prepare documents anaenda bank anapewa loan ya 100m plus depending on size of the project.
30 M ni uwongo. Labda 80M kuendelea
I was once told here zile ghorofa za pipeline cost 20-30M to put up. Hizo ghorofa zinakuanga na 50-60 Units za SINGLE Rooms(Shared toilets, bathrooms,sinks. No wardrobes. Narrow stairs.Bogus finishing)
Assuming that flat cost 70million or $700,000…that money can earn you $56,000 at 8 %interest p.a ($4,600 per month) if you invest in bonds or a savings scheme. Stress free, no sumbua tenants or crookish foremen. That’s the real definition of passive income in my book.