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Looking for property in slums.
Rank: Member Joined: 7/6/2010 Posts: 242
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Personally i have been toying with the idea of purchasing a 1/4 acre in a growing town , then put up shops and single rooms behing the shops.The biggest challenge for me has been how i will finance the construction .
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Rank: Elder Joined: 4/30/2008 Posts: 6,029
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Bachuma Gate wrote:Mawinder,
A better way is to shop for an 1/8th plot in the outskirts of Mulolongo, Kitengela, Kiserian going for say 450,000.00 to 700,000.00. Spend another 700,000.00 (20*35,000.00) to put up 20 mabati houses (plot size is 50*100ft. Tu rooms are 10*10). Total spend 1.3m - 1.4m. Income 20*1,800.00=36,000.00 less expenses may be 30K. For 1.4m, 30k return is not bad. Rent for a 2 bed house at Nyayo Embakasi is going for 30K but to it costs 6.5m to buy. Return is about 26% pa. The beauty is that the land is yours, you have a title and it will keep on appreciating.
Thanks for the information.Will certainly take this route and have the mabati structures as I accumulate capital for building a permanent structure on the plot.
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Rank: Member Joined: 3/26/2012 Posts: 280
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Same here. That's why our govern. really needs to fix this interest rates issue. One should be able to borrow to construct, repay the loan and have some residual income however little. Cant happen with the current rates. DOH
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Rank: Member Joined: 1/13/2011 Posts: 297 Location: Nairobi
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Bachuma Gate wrote:Mawinder,
A better way is to shop for an 1/8th plot in the outskirts of Mulolongo, Kitengela, Kiserian going for say 450,000.00 to 700,000.00. Spend another 700,000.00 (20*35,000.00) to put up 20 mabati houses (plot size is 50*100ft. Tu rooms are 10*10). Total spend 1.3m - 1.4m. Income 20*1,800.00=36,000.00 less expenses may be 30K. For 1.4m, 30k return is not bad. Rent for a 2 bed house at Nyayo Embakasi is going for 30K but it costs 6.5m to buy. Return is about 26% pa. The beauty is that the land is yours, you have a title and it will keep on appreciating.
great analysis, but you missed cost of abluition block 150k, power connection 35k, water connection and storage 30k.all necessary to attain 80+ occupancy for returns above.
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Rank: Elder Joined: 4/30/2008 Posts: 6,029
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Foz00 wrote:Bachuma Gate wrote:Mawinder,
A better way is to shop for an 1/8th plot in the outskirts of Mulolongo, Kitengela, Kiserian going for say 450,000.00 to 700,000.00. Spend another 700,000.00 (20*35,000.00) to put up 20 mabati houses (plot size is 50*100ft. Tu rooms are 10*10). Total spend 1.3m - 1.4m. Income 20*1,800.00=36,000.00 less expenses may be 30K. For 1.4m, 30k return is not bad. Rent for a 2 bed house at Nyayo Embakasi is going for 30K but it costs 6.5m to buy. Return is about 26% pa. The beauty is that the land is yours, you have a title and it will keep on appreciating.
great analysis, but you missed cost of abluition block 150k, power connection 35k, water connection and storage 30k.all necessary to attain 80+ occupancy for returns above. The beauty of wazua.Will definitely follow the plan.Better than investing in the Legacy Apartments.
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Rank: Member Joined: 3/26/2012 Posts: 280
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Foz00 - Good input. The danger about power is missuse. But of course you can mitigate. Rent also goes up with that amenity. DOH
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Rank: Member Joined: 1/13/2011 Posts: 297 Location: Nairobi
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Electricity - install check meters for every hse/unit and bill for power. Currently a unit of power in the vijiji is minimum 30, from the extra after your kplc bill you can pay for water.
Water- ration i.e 6 - 9 a.m and 5-7 p.m
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Rank: Member Joined: 3/26/2012 Posts: 280
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Foz00 wrote:Electricity - install check meters for every hse/unit and bill for power. Currently a unit of power in the vijiji is minimum 30, from the extra after your kplc bill you can pay for water.
Water- ration i.e 6 - 9 a.m and 5-7 p.m Good info DOH
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Rank: Veteran Joined: 12/23/2010 Posts: 1,229
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Definitely a better return on investment but comes with a bit more work. Who will manage the property? Especially the rent collection bit. Plus these are controlled tenancies.
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Rank: Elder Joined: 4/30/2008 Posts: 6,029
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For Sport wrote:Definitely a better return on investment but comes with a bit more work. Who will manage the property? Especially the rent collection bit. Plus these are controlled tenancies. As for management it is easier.You just need to be rough to the tenants or get a tough guy.
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Rank: Elder Joined: 9/7/2010 Posts: 2,148 Location: elderville
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josimar wrote:Personally i have been toying with the idea of purchasing a 1/4 acre in a growing town , then put up shops and single rooms behing the shops.The biggest challenge for me has been how i will finance the construction . By the you surmount the challenge of finance and finish your project you shall discover that your biggest challenge is rent collection and property management. A colleague of mine put up a 3000-6000 rentals and he couldn't get rid of them fast enough. Problem of non-payment of rent, tenants going to the rent tribunal and getting stay of any distress for rent, the septic tank getting full almost on a weekly basis, astronomical electricity bills, illegal bypass of water supply, damaged rooms and fixtures etc. He who can express in words the ardour of his love, has but little love to express. - Petrach, Son. (That men by various ways arrive at the same end. - Montaigne, The Essays of.)
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Rank: Member Joined: 11/17/2006 Posts: 143
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Did you @Mawinder say the management of these structures easy? You kidding!It has never been and it will never be a walk in the park to collect rent from the always disillusioned lot. However a trick that work is getting someone (of course reliable point man known to you from the same slums) and providing him with one such free room out of the 'estate' and voila, the rent collection puzzle is solved.
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Rank: Member Joined: 1/13/2011 Posts: 297 Location: Nairobi
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the septic tank getting full almost on a weekly basis, lack of proper planning on landlords then you blame tenants
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Rank: Elder Joined: 4/30/2008 Posts: 6,029
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254.co.ke wrote:Did you @Mawinder say the management of these structures easy? You kidding!It has never been and it will never be a walk in the park to collect rent from the always disillusioned lot. However a trick that work is getting someone (of course reliable point man known to you from the same slums) and providing him with one such free room out of the 'estate' and voila, the rent collection puzzle is solved. I have one of my boys from Gachie who can do the rent collection job efficiently at a commission.
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Rank: Elder Joined: 9/7/2010 Posts: 2,148 Location: elderville
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Foz00 wrote:the septic tank getting full almost on a weekly basis, lack of proper planning on landlords then you blame tenants
Probably. Though meant every third week. The every week on average issue which I didn't mention is the blockages. The guys were flushing all manner of things down the toilets. He who can express in words the ardour of his love, has but little love to express. - Petrach, Son. (That men by various ways arrive at the same end. - Montaigne, The Essays of.)
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Rank: Elder Joined: 4/30/2008 Posts: 6,029
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Rank: Member Joined: 1/13/2011 Posts: 297 Location: Nairobi
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Rank: Member Joined: 1/24/2013 Posts: 325
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Rank: Elder Joined: 4/30/2008 Posts: 6,029
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In slums you need some rough guys to enforce rent collection and rules or if you are a licensed firearm holder the easier.Just walk into your property with the gun visibly displayed and spread rumours around that you are very dangerous and have killed several people before.Your tenants will always call you to collect the rent.I learnt this from the late Fai Amario.
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Rank: Member Joined: 1/24/2013 Posts: 325
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