Rentals: Very Unpopular Opinion

[jmoy]

In this world, lands, apartments, cars, etc do not make any man wealthy but businesses, shares, bonds etc do!

[Rene_Descartes]

I have seen educated people end up in their 60s with only a shirt on themselves.
Its good to buy land. And maybe build rentals if you can. Dont be cheated by the numbers kids are putting out here. Kids here are only thinking about piling up money in the bank. For what?

[kryptony]

Azoh is right kiplani hapo. Am in construction industry na me hitembea sana sites zinajengwa huku counties.

Looks like there is a construction boom in these small centers. Shida ni every small time hustler who can access 2-3m just thinks of putting up the same ol bedsitters that will give 5k monthly. Now am starting to see a glut because nearly every homestead has some 10 rentals hapo kando. Tenants ni wale mashida shida tu yaani college students, broke bachelors, whorez and assorted hustlas. When you looks at the math after kulipa loan, Caretaker, kujilipa, taxes, KPLC [this can be a big money sink] etc unajipata in the red.

A smarter investment l think would be convert those bedsitters esp if the location is prime into lodgings. Huwezi kosa wasee wa hata 500 daily - my ‘hapa tunalipa ngapi’ niccas am looking out for you. Monthly that translates to at least 12k, not bad for a bedsitter

[marine1]

@jmoy

In this world, lands, apartments, cars, etc do not make any man wealthy but businesses, shares, bonds etc do!

haha wewe niwakuchekwa tu

[ChifuMbitika]

@marine1

There are better uses for ur money
Name 5 only

My sacco has consistently given us dividend per year on 12% interest. Imagine if you invest 5 million as shares. You will gain 600k which translates to 50k per month. Without the hustles involved in demanding rent from tenants

[ndume]

@ChifuMbitika

My sacco has consistently given us dividend per year on 12% interest. Imagine if you invest 5 million as shares. You will gain 600k which translates to 50k per month. Without the hustles involved in demanding rent from tenants

How do you compare this with T-bills?

[system]

@kryptony

Azoh is right kiplani hapo. Am in construction industry na me hitembea sana sites zinajengwa huku counties.

Looks like there is a construction boom in these small centers. Shida ni every small time hustler who can access 2-3m just thinks of putting up the same ol bedsitters that will give 5k monthly. Now am starting to see a glut because nearly every homestead has some 10 rentals hapo kando. Tenants ni wale mashida shida tu yaani college students, broke bachelors, whorez and assorted hustlas. When you looks at the math after kulipa loan, Caretaker, kujilipa, taxes, KPLC [this can be a big money sink] etc unajipata in the red.

A smarter investment l think would be convert those bedsitters esp if the location is prime into lodgings. Huwezi kosa wasee wa hata 500 daily - my ‘hapa tunalipa ngapi’ niccas am looking out for you. Monthly that translates to at least 12k, not bad for a bedsitter

Kenyans are naturally-born copycats. That’s why it always so easy to fool peopleto pursue some shoddy business ideas like the quail business, public likes.

[ChifuMbitika]

@ndume

How do you compare this with T-bills?

T-bills may fluctuate according to the economic situation. Ama?

[ndume]

@ChifuMbitika

T-bills may fluctuate according to the economic situation. Ama?

Yes you are right but you know the interesst rate b4 putting your money. How easy is it to get out of a sacco?

[Kijana_hodari]

sober discussions, will join in tomorrow, @dp mungai, you need to come here

[Ubongo]

Rentals are just for life security, that’s why you see people struggling to put them up

[Sambamba]

@ChifuMbitika

My sacco has consistently given us dividend per year on 12% interest. Imagine if you invest 5 million as shares. You will gain 600k which translates to 50k per month. Without the hustles involved in demanding rent from tenants

Sacco gani hii?

[vixi]

@Ubongo

Rentals are just for life security, that’s why you see people struggling to put them up

Rentals ni za kukupatianga kakitu kiasi kind of consistent. Imagine ukiwa 60 una rentals zako kadhaa. Si hapo unameet your needs bila wasiwasi?

[ChifuMbitika]

@Sambamba

Sacco gani hii?

Stima

[ChifuMbitika]

@ndume

Yes you are right but you know the interesst rate b4 putting your money. How easy is it to get out of a sacco?

It’s very easy so long as you don’t have a loan with them.

[jamaafresh254]

@Azor Ahai

I do not like killing people’s dreams. I come across as unconventional in most situations. I remember saying here and in many other places that despite everyone’s dream of becoming a landlord, pursuing that dream with peanuts is ill-advised. It has nothing to do with pride, sense of entitlement or desire to crash people’s dreams. I like telling people the uncomfortable truth that they do not like to hear/read because society has done a great job at giving them false hope. Real estate (specifically rentals) is a numbers game and a size game. You need more doors and larger capital for a big project for the numbers to make economic sense - I mean tens of millions. If you do tiny projects, you become a slum lord, carry a dagger when evicting tenants and manage the investment personally…effectively transforming it into a full-time job and the returns will still be mediocre. Unless you do not have better use for your time like focusing on your career or core business, it makes absolutely no sense starting with peanuts. The project size will be too tiny for you to hire a caretaker+agent and retain a monthly return worth talking about. A few millions is peanuts for real estate (rentals), but very decent capital for other ventures which you can later cash out of to build a sensible real estate project. My conclusion is that the average Kenyan does not consider the returns when venturing into rentals and they do it for purely sentimental reasons.

Ukuwe peasant, ununue land, ujenge 10 bedsitters na ulipishe 5k each juu obviously haziko karibu na town. What next?? At 90% capacity unapata 45k. Agent anakula 5k. Unabaki na 40k. Unalipa mama hapo hiyo area wa kuosha common areas na kukuangalilianga. Unamlipa 5k. Unabaki na 35k. Garbage?? Land rates?? Repairs??? Fuel yako ya kwenda kuangalia once per month?? Hii hustle yote for 30k - 35k net per month after investing a minimum of 5 million in the project inclusive of land. Don’t forget the months you wasted ukisumbuana na mafundi etc when building the tiny project. There are better uses for the money. Lakini kuambia mkenya that some real estate projects don’t make financial sense atafikiria uko na wivu, haumtakii mazuri etc. Society has taught him that he must be a landlord at any cost because it is the holy grail of financial freedom.

Absolutely False reasoning Omwami & here’s why

1. One of the reasons biz fails in ke.is because of greed…I mean authentic ke. cultured & build. Ke.&Chingchos bliv in making CRAZY MARGINS.

2. What you peddling is corporate mentality (… and if u are not then they hammered it into you and you bought it.) that capital should be in the hands of th bigger and more est’d one. Boss. When Kibaki (Economist No.1) came in he broke, burned and buried that myth. Tha why biz thrived.

3. You math is wrong :- Land rates is paid once a year so it’s not a monthly exps. With margins of 20-30K for small units you are doing extremely well. Subject to to fact that you did no get get facility to put them up.

4. In fact let me give you REAL FACTS. Edermmann (the biggest chingchong) cons have not gone down bcz of uzuri wasrikal.

I know someone who has 6 units her margins are 15k and she is enjoying her life with peace and prosperity kuliko Edermmann who have like a gazillion project…4 actually…na Ile Kiswahili wanachezea watu huko. Haizulu

Anyway kama untaka ku invest na ma rentals advise yangu Ni fanya 1 ama 2 bedroom. Hii kitu ya bed-sitter peleka hio biz na university ndio imakesense. Go back to my discus of margin hapo yuu. Why would you building a 2 bedroom for camp kids?..halafu wakianza ma sponsor munawalaumu? Good brains lied to by Corporate Capitalistic Bullshiters like Kirubi. I hope that man dies soon of what ails him.

End.

[sakwa]

@Azor Ahai

I do not like killing people’s dreams. I come across as unconventional in most situations. I remember saying here and in many other places that despite everyone’s dream of becoming a landlord, pursuing that dream with peanuts is ill-advised. It has nothing to do with pride, sense of entitlement or desire to crash people’s dreams. I like telling people the uncomfortable truth that they do not like to hear/read because society has done a great job at giving them false hope. Real estate (specifically rentals) is a numbers game and a size game. You need more doors and larger capital for a big project for the numbers to make economic sense - I mean tens of millions. If you do tiny projects, you become a slum lord, carry a dagger when evicting tenants and manage the investment personally…effectively transforming it into a full-time job and the returns will still be mediocre. Unless you do not have better use for your time like focusing on your career or core business, it makes absolutely no sense starting with peanuts. The project size will be too tiny for you to hire a caretaker+agent and retain a monthly return worth talking about. A few millions is peanuts for real estate (rentals), but very decent capital for other ventures which you can later cash out of to build a sensible real estate project. My conclusion is that the average Kenyan does not consider the returns when venturing into rentals and they do it for purely sentimental reasons.

Ukuwe peasant, ununue land, ujenge 10 bedsitters na ulipishe 5k each juu obviously haziko karibu na town. What next?? At 90% capacity unapata 45k. Agent anakula 5k. Unabaki na 40k. Unalipa mama hapo hiyo area wa kuosha common areas na kukuangalilianga. Unamlipa 5k. Unabaki na 35k. Garbage?? Land rates?? Repairs??? Fuel yako ya kwenda kuangalia once per month?? Hii hustle yote for 30k - 35k net per month after investing a minimum of 5 million in the project inclusive of land. Don’t forget the months you wasted ukisumbuana na mafundi etc when building the tiny project. There are better uses for the money. Lakini kuambia mkenya that some real estate projects don’t make financial sense atafikiria uko na wivu, haumtakii mazuri etc. Society has taught him that he must be a landlord at any cost because it is the holy grail of financial freedom.

You absolutely right, these small projects only work well for retirees who need something to keep them busy and improve their social status which makes sense since they don’t need to make more millions, just a little maintenance cash is enough. I would definitely do it in my 60s but sio saa hii

But for a youthful investor with big dreams, it’s a dumb investment strategy. Better go for stocks or put your time in a more productive business venture

[Azor_Ahai]

@jamaafresh254

Absolutely False reasoning Omwami & here’s why

1. One of the reasons biz fails in ke.is because of greed…I mean authentic ke. cultured & build. Ke.&Chingchos bliv in making CRAZY MARGINS.

2. What you peddling is corporate mentality (… and if u are not then they hammered it into you and you bought it.) that capital should be in the hands of th bigger and more est’d one. Boss. When Kibaki (Economist No.1) came in he broke, burned and buried that myth. Tha why biz thrived.

3. You math is wrong :- Land rates is paid once a year so it’s not a monthly exps. With margins of 20-30K for small units you are doing extremely well. Subject to to fact that you did no get get facility to put them up.

4. In fact let me give you REAL FACTS. Edermmann (the biggest chingchong) cons have not gone down bcz of uzuri wasrikal.

I know someone who has 6 units her margins are 15k and she is enjoying her life with peace and prosperity kuliko Edermmann who have like a gazillion project…4 actually…na Ile Kiswahili wanachezea watu huko. Haizulu

Anyway kama untaka ku invest na ma rentals advise yangu Ni fanya 1 ama 2 bedroom. Hii kitu ya bed-sitter peleka hio biz na university ndio imakesense. Go back to my discus of margin hapo yuu. Why would you building a 2 bedroom for camp kids?..halafu wakianza ma sponsor munawalaumu? Good brains lied to by Corporate Capitalistic Bullshiters like Kirubi. I hope that man dies soon of what ails him.

End.

1. I didn’t propose starting a business with the entire sum. Just a tiny fraction of the total sum. I did that for a reason. I also understand the riskier nature of business.
2. Corporate mentality or whatever you call it is sometimes right. About it, bring figures, not history.
3. I don’t remember writing anywhere that you pay land rates monthly. Plus, I already know its peanuts but it is a cost nonetheless. I expected the reader to use common sense and divide the number by 12 which you didn’t.
4. That point is neither here nor there. I don’t see how it applies to this thread.

Erdermann is a developer. This thread is about being a landlord. I also don’t remember writing anywhere mtu ajenge 2 bedrooms for campo kids. You have a serious problem comprehending a straightforward argument. So, you are one confused element and there is no need to engage you further.

[Tonito]

Fungua club bwana na hio 5M, pimp vizuri, in towns like Mombasa, Nakuru , kisumu. The club doesn’t have to be like Sabina joy ama Tribeca, etc… but sure as hell club ya 5M Ni kitu Swafi, you shall constantly have in flow of customers, in a short time utakuwa umerudisha Doo zako

[Azor_Ahai]

@Tonito

Fungua club bwana na hio 5M, pimp vizuri, in towns like Mombasa, Nakuru , kisumu. The club doesn’t have to be like Sabina joy ama Tribeca, etc… but sure as hell club ya 5M Ni kitu Swafi, you shall constantly have in flow of customers, in a short time utakuwa umerudisha Doo zako

Mtu ako willing kufanya project ya 5 million kukuwa slum lord, that is obviously his life savings. If you were in his position u-risk your entire life savings by kufungua club, you would lose that money in 2 years. Kuna kitu inaitwa risk kwa business. Ushawahi try biz in real life?? No businessman would ever advise anyone to risk a significant portion of their net worth in a start-up. Kusema ati utakosa kukuwa slum lord ufungue biashara na the entire sum ni kuruka mkojo unakanyanga :meffi:. If I was to advice the guy ningemwambia anunue land with 4.5 million. Land is extremely low risk. Then he can start a wines and spirits shop na 500k which is extremely high risk.