We were not talking about rentals vs building a house. Even if we were, who told you that hauwezi jenga nyumba yako and still build those rentals?
You guys assume your ability to make money ends immediately umemalilza nyumba. Making money doesn’t stop. After umejenga rentals, alafu? Like I said, this is not the conversation we were having.
The point is, a mindo krass wannabe is better off owning their own house than renting. This is a no-brainer. Any other reasons are just derailing from the topic at hand.
The cost of construction always goes up so ishi ukijidanganya ati utajenga after you make 100M from your businesses. By then iyo it will cost you 30M kujenga when you could have spent 10M today today.
Alafu stop assuming that all houses can’t be rented out. If you can get a good location, then your standalone house will be rentable. Anyone building along Kiambu Road, Ngong etc can and will be able to rent out their house if they ever need to move. In any case, you’re not building to rent it out but if you have to rent it out, it still gives you “unexpected money”.
TLDR: Your ability to make money doesn’t end after building a house. You make money till you die. Keep making @Landlord rich.
These guys think watu wanajenga 100KM from Nairobi. There are people building only 20KM from Nairobi. A standalone house 20KM from Westlands is much better than an apartment in Westlands. It takes 20 minutes to get there and you can retreat to your peaceful house jioni. Mindo krass chieth wanataka tuishi kwa apartments with zoomali terrorists and nigerian conmen like them.
Give these wannabes 15M cash leo and watch in amazement as they all build a house because they know it’s important. Hawana iyo pesa that’s why they’re shouting.
Ango akienda kwa bed sitter na 2 dotas and a son, alikua amesota for real. After striking gold ama a better job, ndio akarudi kwa mansion na suv lifestyle.
I am not attacking your strategy but it’s still flawed in my opinion. Kids growing up in a spacious compound with their own spacious bedrooms and rooms they can go relax by themselves makes them develop a calmness of mind that aids their cognitive abilities. Chaos za apartments are actually detrimental to the mental health of your kids.
International markets are good but don’t pour all your money there and neglect giving your family comforts at home in the name of not missing out on crypto and the markets. Peace of mind and comfort are priceless.
At the end of the day, you’re making money so you can build that house eventually. If that’s the end goal, why not build it now and enjoy it? You remind me of some anedote involving an investment banker and a fisherman by the beach somewhere in Mexico.
There are better investments than owning a house. Owning a house is an inefficient way of deploying scarce capital.
Hii ni hesabu nimefanya countless times and concluded that I’m better off renting than buying. Hata if you do the math on a comparable investment (rentals), its still better to rent than to own the house.
For example, why would I buy a 14M house instead of building bedsitters or one bedroom units that will yield 140k? I can collect the 140k rent, use 70k to rent the 14M house, and pocket the extra 70k. This is the point you dummies keep missing. Houses are terrible investments (low ROI) but wonderful utilities. Also, I would never have to worry about rent increments from my landlord because I’m hedged (using rent to pay rent).
First of all, a house is not an investment (in Kenya - but it is in the West). It’s a place to live. An investment brings you money - cash in - every month. Now that aside, you’ve concluded that it’s better to rent because the only money in your possession can only either run your businesses or build the house. It is scarce so of course building the house is stupid in your case. You mentioned that the better option would be building 15M rentals but you haven’t, despite still not building the house. You have NEITHER a house nor a rental property so clearly, money is scarce on your end. That’s okay. Not everyone is Mr. Money Bags like @Bandit1 and @Gaza. It’s okay.
Now let’s assume you had 15M mbele na nyuma. That’s a nice chunk of change to set up your life in shithole Kenya for the medium term. It doesn’t make sense to buy a house. That’s when, like you wisely pointed out, you buy a plot in your county and build one bedrooms alafu unaokota 150k yako every month. Having done that, the possibilities are endless:
You can go to the bank and borrow 10M to build your own house and use the rents collected to pay back the loan and still have enough for fuel and food.
You can borrow 10M to expand your rentals so you now start collecting 200k instead of 150k.
You can choose to live in Westlands and use half of your rent collection to pay for a fancy 100k apartment apo General Mathenge
I am not disputing that building rentals is the smart play here. It is. Let nobody lie to you. However, that wasn’t the point of conversation but you still brought it up.
Most of these mindo krass folk don’t have 15M to actualize that rentals dream (it’s the minimum amount required to start such a venture). Instead, what they have is 3-4M ikienda sana. If you have 10M+ liquid, you are not mindo krass my broda. You are solidly upper middle class in Kenya. That’s a fact.
Now someone with access to 3-4M (the actual mindo krass) doesn’t actually have it. They can only GET IT VIA LOANS from a bank. Now, which 3M business will give you enough cash to pay off such a loan without forcing you to quit your job so you can supervise it yourself??? Remember, your paycheck is the collateral so you can’t leave your job. No passive business will net you enough to pay off such a loan. NONE!
So now, what can you possibly do with 3-4M to get a headstart? Building a house!
Let me also tell you something. Once you get that 15M, you’ll not even build those rentals. You think you will but you won’t. Why? As you make more money, you start developing some form of taste. Those rentals in low income estates lose appeal and you want nothing to do with such monstrosities. You lose interest in such things because you yourself wouldn’t even live there. So why build such for other people’s kids to live in? It’s called compassion. Most kikuyu landlords are old school village boomers so of course they keep building those concrete money printers. The new generation like myself won’t build that so we are waiting to make 100M so we can build liveable housing that even we can live in. Can I build 20M rentals tomorrow? Absolutely. Will I do it? Absolutely not! I’d rather build 4 nice bungalows that even I could live in and put them up for sale knowing that I am providing actual value.
There are people who have money and 100 K is nothing to them; naonanga rents zikiingia promptly by the 1st…watu ya KeNHA, self made etc . Not everyone likes living far away from CBD or building a house…watu wanataka kutoka kwa nyumba and pap they are at Junction , Riara School, Alchemist, Makini , Rusinga you name it . Personally I hate all the noise and congestion and prefer to be out of Nairobi visit the town for business and then going back to the bush.
[quote=“sani, post:48, topic:542403”]
…mkuje niwauzie nyumba hapa Imara Daima own compo
Capital is the god of capitalism. If you have it (the 15m you mention) , why lose it all building a house (for a psychological payout called ‘security’ and status) while you can invest it in a risk free instrument like a bond and live off the interest (assuming even 10% thats 1.5m a year or 120k per month) anywhere you like… And after the bond matures the 15m plus your additional savings and earnings will still be there… You can rinse and repeat, growing your capital, while being flexible about where you want to live and secure in terms of having a roof over your head (since money comes with or without a job) …Then when youre old and have a lot of capital, you can build for retirement where you want and hopefully not a city like nairobi whose population doubles every five years but investments in infrastructure and social services lag.
You niggas crack me up with these bonds and MMF nonsense. Show me anyone who pours 15M in bonds and I’ll show you an idiot. If that were a smart decision, hedge-funds would be flocking to buy those Kenyan bonds.
So let’s assume it’s a smart move, are you going to live like a nomad all your life? If you have 15M to build a house, you have much more than that.
First bonds and MMF are two very different things. Bonds have existed for more than 500 years and are basically how governments finance their expenditure. Taxes are collected first and foremost to pay off interest and principles of debts… So try getting a proper education on finance… MMF are funds managed by licensed investment firms that invest in low risk instruments like term deposits etc
Newsflash… You are a nomad all your life… Or you think after you die and take your 15m bungalow with you?.. The best life is to live where you want and have flexibility to move in case what you want changes or circumstances dictate that you must move… Building in your 30s works solidly against that… Live off your capital while keeping it fir when you need it… Thats why its called capitalism and “market” economics…
Alex Kairu dealing with rentals is stress and not worth it. Before last year you could get a treasury bond for 20% . I know one fcker who invested in a 20 year bond , put in 100 million at 20% . Many laughed at him since they believe in gorofa but he makes 20 million a year tax free which translates to 1.7 m per month. He uses the money to rent in Karen, send kids to international school and invest in other ventures. He has not built his dream house yet but has an acre in Karen.
So in your mind… Throwing away 15 m of sure money, and foregoing more than 1.5 m in interest a year (with no day spent at work, no colleagues, no boss, no competitor etc) is stupid… Someone who generates 7.5m every five years, in addition to preserving 15 m in five years, all without doing anything but sitting, is dumb? … Okay brainy whats smart?
And just btw you have no clue about whhaf hedge funds do of dont do… They have what is called mandates, which dictates the asset classes they invest in, the geographiea they pick, their investment strategy etc…
Bonds are defensive investments and are mostly purchased by pension funds, insurance companies and banks that need to manage their excess liquidity… In Kenya CBK publishes performance of bond auctions. More than 90% of auctions are usually oversubscribed btw…
Yaani you cant be soo ignorant and rude at the same time son. You’re very ignorant about money son
The KESH has weakened by 44% against the USD since 2015. The yearly inflation rate in Kenya is 7.68% on average. Additionally, the USD depreciates at 3% yearly on average.
You call yourself a mathematician, calculate the liquid value after 10 years of holding the bond. One thing I’ll admit though is you’ll get the regular cash flows in today’s money.
Now do the same math with real estate and report back. After all, you’re so smart and I’m an idiot who doesn’t know the difference between MMFs and Bonds. I’d have taken you seriously if you were talking about stocks like Palantir, Costco, Crypto etc but you started blabbering about Kenyan bonds lmao.