All your figures are too optimistic.

- That it will cost only 12M to put up 20 units
- That these units will fetch 12k per month
- That occupancy will be at 85%

Use more realistic figures and then ran the maths again.

Personally, I wouldn't. I would rather invest the 12M in a blue chip stock that pays 10% dividend and then net 100k per month without having to hassle with tenants, maintenance, KRA etc.

Another alternative is the soon to be announced IFB interest free bond that will probably net 13.5% , that is 135k per month risk free and hustle free.

Thanks @My 2 cents, @tinker. Good insights
@ My 2 cents
1. All your figures are too optimistic: Quite to the contrary the figures are accurate, and the math’s correct. I am a bean counter, so numbers are to the dot. The unit rental rates are for occupied units and the 85% occupancy is based in total units occupied as a percentage of all the units. The lesson here is that most costs are exaggerated by contractors, but self-builds save quite some penny. The downside is it takes time and energy, and one cannot do it for long.
2. Alternative investments. That’s a good perspective depending on a investor’s preference. But I think for one to get a 10% Div one would really need to diversify. IFB looks quite appealing. Will research more on it.

@tinker
3. 12M can indeed do 20 standard bedsitter units. Again the emphasis is basic, ie basic tiles flooring, basic kitchenettes, open wardrobes, and decent plumbing. Nothing top range but decent for the market category. Downside would be higher repairs/replacement costs due to wear and tear.
4. SACCO charging : This is indeed a pain. Lesson is to stagger the loan disbursements as per need to avoid high initial cash disbursed which would lay idle for some time. Most SACCOs would allow this.
5. Duration : 1 year is on the lower end. At least one year and a half for decent work and site management