This year 3 people have tried to sell their townhouses to me. I have always suspected that a house is not an asset, but now that the economy is in the toilet, I know for sure. When your business or job goes under, an asset is supposed to provide you with income. However, almost always when someone’s business goes under or he loses his job, he is forced to sell his house. If he attempts to rent it out, he gets peanuts.
Houses are good utilities and consumer items. But they are not assets…change my mind.
Land is an asset. You cannot rent it out but sell it when you need cash.
There are fixed assets and current assets.
A commercial house may be a current asset because it will readily generate revenues by renting. However, a family house remotely located is a fixed asset that may not fetch you rent revenue easily.
Uongo mtupu. Whereas land is an asset, it ain’t really a liquid one. Luna plot nishawahi jaribu kuuza hapa kwa kijiji na kwingineko nikiwa kwa fix. Nilikaa nayo mpaka nikajipata nimeshatatua shida nilikuwa nayo nikalenga hio story.
Now imagine they didn’t have the house and when things go south inakuwa double trouble unapata hata watoto wamefungiwa inje na landlord? At least when you have a house you have a base to operate from as you reorganise yourself. Your family must also have a place to live in whether you own a house or not. The fact that your house saves you from paying rent, it means it is an asset since it saves you rent money ie eg if you were supposed to be minus 100k each month after paying rent, now your account is +100k every month coz you don’t pay rent.
A house has a terrible ROI that’s why they prefer to sell instead of renting the houses out. Hizo nyumba rent ni 60k or thereabouts and they think that the market can give them 15M. If houses were decent assets, they would just keep them and enjoy the cashflow but they don’t. Don’t even think about the headache of finding that one middle class tenant and depending only on him/her for rent.
It’s double trouble because the ROI is laughable and the returns are unreliable. You go from 100% occupancy to 0% occupancy instantly and its a lot harder to find tenants. If you consider a house as an asset, then it is one of the worst “assets” to own. My view is that people should buy/build houses but at the end of the day, they won’t bail you out of a shitty situation without having to sell them or refinance.
A single family house is a perfect utility but a terrible investment.
Hii ndio uoga hata our parents waliuziwa enzi zao and it reeks of scarcity. Msee yeyote with a young family mwenye anareason hivi shida zimemngojea hapo mbele tuu.
So what do you want people to do? You want them not to own houses and put their cash in cryptos, stock exchange, businesses that are collapsing all over?
The worst part of owning a house when you are still young is, the structure looks so outdated 10-15 years down the line. When you’re in your 50s you look like a peasant compared to your neighbours, yet you were doing well in your youthful years.
Instead of spending your million shillings on a house, put the money in a money market fund (MMF) at 8+% interest p.a. In 20 years’ time you will have made 5× of your money and retire in a decent house.
:D:D:D
Kupata customer wa kutoa zaidi ya five hundred thousand hii Kenya sio rahisi. Hapo ndio unaskianga mtu alikopa kitu kama three hundred thousand akashindwa kulipa, shamba worth millions ikaenda hivo.
Investment mzuri ni ya matatu.
The rubbish we read in this Kijiji sometimes boggles the mind. I bought a house via mortgage at 27 years for 1.4 million. I rented out part of the house and lived in the other. When i eventually sold the property I got Kshs. 6.5m. I was able to put up my retirement home in shags, buy farm machinery like tractor, plough, harrow and Bowser. I retired at 43.
So your experience is not like other people’s. Keep you misinformed opinion to yourself and go and invest in matatus.