Owning your place to call a home is not the end of the world …[ATTACH=full]241726[/ATTACH][ATTACH=full]241727[/ATTACH]
owning property is not about cash.
unajenga nyumba laikipia na uko job nairobi, you rent here in nairobi, maintain a house back home and drive 250km to and fro every weekend. is this really being wise. if you are young and still working on your career avoid building a house till you get a stable job. then buy land near your place of work and it will serve you.
build a home. if it doesnt suit you rent it out. It is worth many times more than fluid cash.
I own houses in Kenya and a house in Trumpland and feel obligated to disagree with you.
Besides the feeling of accomplishment of owning, here are some comments from an expert in Trumpland most of which may apply in Jamu.
Homeownership is a rite of passage many of us dream of. Owning a home means putting down roots and having a space that is truly yours. It’s a significant moment of your life when you finally own a home.
But owning a home can be daunting because of the responsibilities and obligations that come with it, combined with the initial process it takes to get there. When done properly, though, buying and owning a home is a process that limits your financial risk, increases your investment power, and saves you tons of money over the long term—and it can even save you money immediately.
Renting has little to no ROI. Renters don’t have to worry about maintaining a residence or paying the mortgage. But if you’ve been renting long term, chances are you’re already performing home maintenance on some level and you’re at your landlord’s mercy when it comes to major repairs. And when it comes to paying the mortgage, there are many advantages over rental payments, which don’t provide any return on investment beyond securing a place to live through the end of the month or lease.
How much is rent actually costing you? Consider the amount one pays over a 10-year period. A $1000/month rental payment adds up quickly to a whopping $120,000 over 10 years, when the same amount of money could have gone toward reducing 1/3 of the debt on a 30-year home mortgage by essentially making the payments to yourself instead of a landlord. Wow!
[B]Here are 9 more benefits to owning your own home:
- Homeownership is an investment.[/B] Unlike a car and many other purchases that decrease in value, a home is a purchase that appreciates over time. While each local market has its own unique factors, the national median home price goes up each year, even in times of recession. As you pay your mortgage each month, your debt amount goes down, while the value of your home continues to rise. This creates the buying and reinvestment power better known as equity.
2. Gain equity. When it comes to homeownership, investment and equity are directly related. As you make mortgage payments each month, part of the payment goes toward the interest, while the rest pays down the principal balance. Equity can be better defined as the part of the principal balance you’ve already paid, or the percentage of your home you already own. Paying the principal is like depositing money in the bank, because that money becomes available for reinvestment in the home itself or a new home.
3. Take advantage of tax benefits. The federal government encourages homeownership (which in turn encourages economic growth) by offering tax incentives for homeowners. The biggest one is the option to deduct interest from mortgage payments on your income tax return, especially at the start of a mortgage when most of the payment is applied to the interest. Payments on private mortgage insurance (PMI) and certain home-related purchases also qualify for tax benefits.
4. Stabilize your housing costs. A fixed-rate mortgage means you’ll have the same mortgage payment for the term of the loan (usually 30 years), while monthly rental payments will continue to climb. And even adjustable-rate mortgages (ARM) have a fixed cap on them. Homeownership also stabilizes other home-related expenses like utilities and gives you more control over your ability to make investments in your property that keep those expenses down.
5. Gain control over your living space. Renting doesn’t usually come with a lot of options for modifying your living space to better suit your needs. Renters with changing needs must also deal with changing residences. Homeownership means you can make improvements to your home, and home improvements usually lead to increased home value, both financially and in daily home life. The power of equity can give homeowners the extra financing they need to reinvest in their homes when cash funds aren’t an option.
6. Increase your own sustainability. Homeownership can help you create a sustainable future in many different ways. Long-term renters lack sustainability because a high percentage of their income usually goes toward housing expenses that are constantly increasing. Locking yourself into a mortgage payment helps level out living expenses, so when income goes up it can be budgeted elsewhere. Paying off a mortgage allows homeowners a long-term plan to significantly reduce their living expenses as they move toward a retirement budget.
7. Stop moving. Homeownership increases sustainability and stability. Moving from rental to rental is a major inconvenience and a financial and emotional burden. Renting can mean that you never really know where you’ll be living next or what your expenses will be. Staying in the same home allows financial and emotional investment in both your living space and your community.
8. Social benefits. Staying put for longer periods of time also creates social benefits that range from friendships with neighbors to community involvement and consistent educational opportunities for children.
9. Use your investment to make another investment. The equity that comes from paying a mortgage is what allows many individuals and families to make future investments in the same home, a higher-valued home, or second home. A home equity line of credit helps homeowners use the part of their home that’s already paid off to obtain financing for investments apart from the home itself, such as purchasing a boat or RV.
You can rent. But make sure you purchase a piece of land where you intend to retire. And early. 25-35. That way if you change your mind, you don’t have to purchase overpriced property to build.
What if your family are in Laikipia?
Good break down
it even makes it worse, you need to be there every weekend for them, fuel cost would be around 4k. it would make sense to have them with you in Nrb
Don’t own the house you live in. Use that money to build rentals which provide cashflow. Use rent (from rentals) to pay rent (a decent house in a gated secure estate). You will never go broke with a cash generating property portfolio.
I would rather rent a house in Runda and use that money to build a block of flats in Kasarani, Kahawa etc. But don’t judge me, because that is just my opinion. This is not financial advice.
Really, you do not know financial independence until you build your own home. No rent. I accept not everyone who can build where they work as they may shift from town to town but having roots set up is good done earlier than late. Lands prices always go up not down and don’t think of 1-2-3 years. Think of 10-20-30 years. Don’t think of yourself but your family. Homes are for them. That 30000 rent bill if it wasn’t there monthly then it can help a lot somewhere else.
If you can afford to build, build. Build your own home. The idea of staying in your own compound is just awesome. Knowing that your family will never be kicked out again because of not paying rent on time gives you emotional stability. I don’t have one but I have to. And homes appreciate in value actually.
I will say that if you put money into building a house, the money is held in the house. on the other hand no so much for cash in the bank, which disappears quickly.
I’m in the same boat. Kama ni kujenga as an investment, just build rentals straight up and use the profits to rent in a fancy neighbourhood. You can build rentals of 10m and with the proceeds, rent a mansion in a leafy suburb. This thing of building your own home and looking at that as an investment is wishful thinking. I saw it with my own parents, you will never sell/rent a house that you spent 10+ years building! The emotional attachment is simply too high. Hence that doesn’t count as an investment, hapo pesa ulimwaga tu for emotional comfort.
Supposing you come across a 50 million windfall. What would you do??
Scenario 1:
I wouldn’t use a single cent to build my own house. I would rather build a block of flats. Rent from that block of flats will afford me a better house (rent) than the one I would have built with that money, and leave me with a few hundreds of thousands extra cashflow. At the end of the day I have more casflow and live in a better estate than the guy who decided to build a pigsty.
Scenario 2:
Both of us lose our jobs one year after we complete our respective projects. You (guy who built a pigsty with your 50m) will put it on olx ASAP because you are cashstraped. I, on the other hand still receive a few hundreds of thousands extra. Worst thing that can happen to me will be downgrading my lifestyle a little bit unlike you who will have to sell that house cheaply.
You will learn a few harsh lessons:
- Cashflow is king
- Your personal residence is not an asset.
However, if you are financially independent (enough cashflow/passive income rolling in already) I think then it would make sense to own a house for peace of mind. But building your own house before rentals is not the best use of your money. That personal residence won’t pay your medical bills at 70.
The rent-vs-own debate in relation to housing is a middle class malady. The wealthy in society just buy/build because they can. The poor in society rent because…lemons. The middle class want to live in Runda on 100k salos. Their incomes suggest Isinya but their lifestyles demand Muthaiga.
Why do we look for money?
Is it not to have a comfortable life.
My opinion is get money,buy land ,build your pigsty and enjoy living in it as you look for more money,which should be channelled to other kind of investments.
Why build a dream home when you are in your 60s with a chance of living in it for not more than 20yrs.
The downside to the above approach is that you might amass more money/wealth and think of building yet a better retirement home kama ya ule jamaa billionaire mTZ mwenye aliaga juzi.Reginald
Why build when you can rent your dream home and have money left over? At the end of the day, we will live in identical houses and have the same living standards. But I will have a significant amount left after paying rent which you won’t have because the ROI on flats is higher than on typical pigstys. If we both lose our jobs, you are screwed, I’m not.
If we both lose our jobs, but you have a 50 million mansion in Thome and I have a 50 million flat in Juja, you are screwed and that’s when you will know that your own house is not an asset. Even if you shift and rent it out, a 50 million mansion will net significantly less than a 50 million flat. I won’t even have to leave the estate but you MUST downgrade.
Maisha si rahisi hivyo unasema… Nobody has a 50m flat na hana nyumba yake… Wacha porojo. Na maisha si 1+1.
Do you know a mansion of 50M ni nyumba gani?
“Nobody has a 50m flat na hana nyumba yake” …umesoma mahali popote nimesema kunaye ama ni bangi zako zinakuonyesha ivo? Secondly, wako wengi ni vile wewe hauwajui.
“Do you know a mansion of 50m ni nyumba gani?” Najua za 100million wacha za 50m na wacha peasant mentality.
Obviously you are a triggered homeowner juu umeona mtu ana-differ na your line of thinking.