[ATTACH=full]67900[/ATTACH] [ATTACH=full]67901[/ATTACH]
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Just as I said yesterdayâŚany rental yield of below 10% per annum for a property, you are overpaying for it. It is that simple. Also, I normally never think it is wise to factor capital appreciation on a property, because it gets eaten up by inflation, transaction costs if you decide to sell etc. Personally, if I was to get into real estate, I would only buy land if I intend to build on that land, not to speculate. Land speculation never makes any business sense for me, unless you have some valuable information about a place, and buy before the market prices in that information to the cost.
Hii capital appreciation, to my layman view, naiitanga pangâangâa tu. You only ârealizeâ it in monetary terms after sale. If youâre not selling itâs just another book entry.
ExactlyâŚunaskia jamaa ati amekuwa na shamba for a whole 10 years ameiuza tripple the priceâŚwhat he doesnât know is that the price of everything has also trippledâŚmeaning the actual gain is zeroâŚakitoa inflation, atoe cost ya broker, etc. Unless you know some valuable information about an area, that the market does not know, it never makes sense to me speculating on land. I would rather buy a plot and build. The real estate sector has what is known as the lottery phenomenaâŚwhere only the winners are made public. You will hear people who sold their land at tripple the price after three yearsâŚthose people are not many. Most will stay for 7-10 years for the price to double which means that unless you were using the land in other ways, you will not have gained after selling.
Time value of money.