NewMoney wrote:MugundaMan wrote:
Financial illiteracy is a terrible thing.
And I'm not talking about the poor chap who is being auctioned
How do you make the giant leap of faith from one single property being auctioned (with no reasons provided for us to make any sort of reasonable conclusion wrapped around facts) to DC is a terrible place to invest in vis-a-vis Valley Arcade?
Kwani there are no properties being auctioned in Valley Arcade?
And then even more amusing; ati a matchbox sized Chinese built 70sqm apartment sitting in the air tethered together to 200 other units in a cramped quarter acre plot is a better investment than a spacious 250sqm or more maisonette on its own 1/4 acre in DC. You gots to be kurazy, dear friends!
And the funniest of all. Ati rental yield.
Which
SERIOUS investor in Kenya who understands how real estate in Kenya works takes the "rental yields" metric seriously?
What is the "rental yield" on a 400m 5br bungalow in Muthaiga?
If you are excited about it, you probably need to get your head examined
Shalom.
Stop being too defensive brathe, am a huge DC supporter. A cashflow investor wants to see cashflow every month, a value investor is ready to wait for 5 years or even 10 for cycles to complete. I encourage the valley arcade apartment (100sqm btw with reasonable quality finish) for the former and kite plots for the latter.
Muthaiga is an established neighbourhood with well-defined quality guarantees that value/quality will never ever go below a certain level, while kite is an unknown, nobody knows how many slums or mabati plots shall and will pop around your plot so you gotta factor that in.
You gotta be flexible since times are going to change fast and without notice
New Money,
A simple question to you.
Lets take that 8m 100sqm apartment in Valley Arcade renting for 60k.
On an annualized basis, what is the rate of return? I am sure you will agree with me that even with this "super deal" after accounting for expenses, vacancies, taxes etc etc the ROI/yield is
the biggest of jokes. In fact you are better off putting that 8m in M-shwari lock savings or even a crumbling bank fixed deposit account instead if cashflows are your real motive.
Then look at appreciation potential. A house in Kileleshwa Othaya Rd on 1 acre was going for 7m in 1995. Today it is easily going for 300 metre and up. An apartment in Westlands in a block of say 20 units on 1 acre in 1995 was going for as little as 1.5m back in 1995. Today that same apartment is going for 20m (if you are lucky). The land under it, however is scraping a cool 200m+ on any bad day but you as the apartment owner will NEVER be able to unlock your equity in that communal land because your destiny is DOOMED to be yoked to 19 other people, some of whom refuse to pay service charge! How on earth will those two scenarios compete?
Fast forward to dustbowl. 1/4 acre Maisonette can be built easily for Valley Arcade apartment prices. What will the price be 10 years from now as the middle classes swarm Ngong, Kitengela, Rongai etc in droves? 20 years from now? 30 years from now? What about that apartment in Valley Arcade. This is not rocket science my braddah. My advice to you is RUN from Valley Arcade (and any apartment complexes on tiny pieces of land except the VERY HIGH END of the market - luxury duplexes etc) and come to DC where kina Hassconsult have been telling you guys for years has the highest returns on land alongside the other fast growing burbs of Nairobi.
I don't know why many Wazooans find this so difficult to understand. Unless you have 400m "old money" to shell out for a bungalow in Westlands or Karen (like Wukan
) you have no business wasting your time chasing hall ten university hostels type Chinese built cramped apartments in Nairobi core if super returns are your endgame.