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Am tired of paying rent!
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bwenyenye
#21 Posted : Friday, June 26, 2009 2:54:00 PM
Rank: Elder

Joined: 5/24/2007
Posts: 1,805
@TB

Just a quick one before you leave us.

A house (especially your first house) is not something you buy with the main intention of earning from later or now. You pay that much money and opportnity cost just for your peace of mind;that one day,your kids will have the advantage of not having to start from where you did. Just the same reason you want your kids to study more than you did. Just more opportunity for them.Do not look at a house as you would normal investments at the NSE. The view is different and that is why a bank will prefer your home ( more than commercial property)as collateral anyday because they know you will fight for it and ensure you repay the loan. Having your own house gives many the freedom to now risk higher knowing they are covered.

Your first house is not a common good of trade and so really whether it appreciates or not is not the main issue as in normal investments.

Cheers mate!
I Think Therefore I Am
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omachini
#22 Posted : Friday, June 26, 2009 3:13:00 PM
Rank: Member

Joined: 7/10/2008
Posts: 4
@ all,

wonderful talk on sk,

i practice what limuru boy said and would advice same.


the higher the risk,the higher the returns.
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Tebes
#23 Posted : Saturday, June 27, 2009 3:52:00 PM
Rank: Elder

Joined: 11/26/2008
Posts: 2,097
@ Gordon Gekko

I have always admired Morgage packages and really want one maybe end of the year. Now my biggest setback perhaps is the stammp duty payment fee of 4% of property value.

I live in a rented house of 14k and was actually paying the money direct into the morgage repayment account at kenya-reinsuarance of the landlord until early last year. I used to think,'what If I was repaying my own morgage!!'

Secondly,how do one ensure that the plot he is buying comes from a genuine bona fide owner?

Looking forward for answers from all.

Cheers.


Work like you will die tomorrow,plan like you will never die
"Never regret, if its good, its wonderful. If its bad, its experience."
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Marty
#24 Posted : Monday, June 29, 2009 4:35:00 AM
Rank: Veteran

Joined: 3/31/2008
Posts: 761
Location: Nairobi
@Tebes,

To answer you on the plot issue. The easiest and legally binding way (on part of he Government) of confirming the ownership of a property is by way of official search. Another way you can cover yourself is to use a lawyer and ensure that you only pay 10%
of the property and await the seller to get you all the completion docs (Original Title,consent to transfer and their personal docs). You can prepare their final payment and let it be held by a lawyer to be released only after you have transferred the interest of the property in your name( i.e. title in your name). That way,you cover yourself against any serious losses,other than the 10%).

..wise as a serpent,humble as a dove
When I admire the wonder of a sunset or the beauty
of the moon, my soul expands in worship of the Creator.
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muganda
#25 Posted : Friday, January 22, 2010 6:15:17 PM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
These words came to mind, typed them into the Wazua search box and see what I dug up...

Read through the thread and you'll agree - Brilliant - no more need be said.
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Siringi
#26 Posted : Wednesday, October 16, 2013 4:48:22 PM
Rank: Elder

Joined: 6/8/2013
Posts: 2,517
was not sure which of the many property and financial education threads to post this anyhow

=>Nobel Prize winner Robert Shiller's Devastating Takedown Of Housing As An Investment Will Have You Renting For The Rest Of Your Life

Excerpts:
Trish Regan: "Then why buy a home? People trap their savings in a home. They're running an opportunity cost of not having that money liquid to earn a better return in the market. Why do it?"

Robert Shiller: "Absolutely! Housing traditionally is not viewed as a great investment. It takes maintenance, it depreciates, it goes out of style. All of those are problems. And there's technical progress in housing. So, new ones are better...

"So, why was it considered an investment? That was a fad. That was an idea that took hold in the early 2000's. And I don't expect it to come back. Not with the same force. So people might just decide, "Yeah, I'll diversify my portfolio. I'll live in a rental." That is a very sensible thing for many people to do.

"If you think investing in housing is such a great idea, why not invest in cars? Buy a car, mothball it, and sell it in 20 years. Obviously not a good idea because people won't want our cars. It's the same with our houses. So, they're not really an investment vehicle."

=>The Economist Who Just Won a Nobel Prize Thinks Owning a Home Is a Terrible Investment

Discuss 50marks


"😖😡KQ makes money for everyone except the shareholder 😏😏 " overheard in Wazua
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Siringi
#27 Posted : Wednesday, October 16, 2013 4:57:05 PM
Rank: Elder

Joined: 6/8/2013
Posts: 2,517
"😖😡KQ makes money for everyone except the shareholder 😏😏 " overheard in Wazua
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Siringi
#28 Posted : Wednesday, October 16, 2013 4:59:09 PM
Rank: Elder

Joined: 6/8/2013
Posts: 2,517
"😖😡KQ makes money for everyone except the shareholder 😏😏 " overheard in Wazua
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Lolest!
#29 Posted : Wednesday, October 16, 2013 5:53:00 PM
Rank: Elder

Joined: 3/18/2011
Posts: 12,069
Location: Kianjokoma
Siringi wrote:

be careful when following these westeners with their home based solutions on real estate. Their reasoning is customised to their real estate sector!
Laughing out loudly smile Applause d'oh! Sad Drool Liar Shame on you Pray
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Lolest!
#30 Posted : Wednesday, October 16, 2013 5:55:37 PM
Rank: Elder

Joined: 3/18/2011
Posts: 12,069
Location: Kianjokoma
Gordon Gekko wrote:
@TB,your argument misses a fundamental point. In Management Accounting we are taught to isolate irrelevant costs when making decisions. Rent is an irrelevant cost as you will pay it whether you rent or buy as you must live somewhere. Therefore your 79K mortgage payment is effectively 79K - 50K = 29K.
My personal experience,I took out one for a 2.2M house in 1999 when the repayment was 28K and the market rent for the area was 12K. Effectively my mortgage was 16K. Five years later,my repayment was still 28K,but the market rent had risen to 19K,making my effective mortgage 9K. Today the market rent is 23K,but I have since cleared the mortgage,so I have a free cash flow.
Skerians,don't fear mortgages,just make sure (like I did) you pay more than the agreed rate. The difference goes straight to the principal payment.
I also urge you to join a pension scheme. With the changes in the budget,you will be able to use your pension savings as security. This theoretically means you don't have to come up with the upfront cash payment required to get started - and this is significant as this can be as high as 1M for a modest house.
Applause Applause Applause

I know this was posted 3 years back but it's great advice!
Laughing out loudly smile Applause d'oh! Sad Drool Liar Shame on you Pray
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