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How much money does it take to be affluent in Kenya?
Rank: Member Joined: 3/17/2008 Posts: 567 Location: Nairobi
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An easier way than hustling for 400k a month every month till you die, just save up like 30M or a significant portion of it. (I am sure with your lifestyle in the US this i possible, not easy but possible)
That will be enough to put up an apartment block with 25 2br apartments each of 1000Sqft. You can then spend your time playing golf at Karen CC.
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Rank: Veteran Joined: 11/30/2006 Posts: 635
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jasonhill wrote:4,800,000Ksh a year madhaquer.... ok. That's a reasonable assessment. Thanks for the breakdown. On a solid, conservative investment... let's say a government bond, how much would I need to invest into the bond? Would an 5% return on such a bond, or a bank fixed deposit seem feasible? Are the returns from investment income taxed? If so, at what rate? If 4.8m is what I need yearly from the investment, that's about 96mil in government bonds or bank CDs that I'd need to invest in order to live off the interest. I guess the biggest question is taxation on the capital gains. It's pretty high here in the US. Is it also high in Kenya?
Fomoney... Thanks for your comment. I understand that my question was fairly broad. Thanks for your input.
Boss have you considered getting into Kenyan business via private equity. Lately there has been a goldrush by private equity firms to get a piece of the cake in young Kenyan businesses. Mostly this has been in the areas of manufacturing, healthcare, finance, IT. More than 20 private equity firms have now set up shop here in the last 12 months. The good thing is there are businesses looking for as low as US$ 100,000 and offering significant equity stakes for it. Follow these links http://www.theeastafrica.../-/cdfgimz/-/index.html
http://www.nation.co.ke/...0/-/cfjwr6/-/index.html
http://www.theeastafrica...0/-/42w37y/-/index.html
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Rank: Veteran Joined: 11/2/2006 Posts: 1,206 Location: Nairobi
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@jasonhill.....You might really hustle here in Kenya trying to make 400k/month even with your good experience in IT consulting. As someone suggested,save up and construct some flats.A relative of mine has 8 two bedroom apartments in South C whose rent is 29k/month.She spent 15M constructing them (she had bought the land in yr 2000 at 2M).That's an easy 232,000sh every month. Why don't you save around 20M to buy prime land now (should take you 4yrs) and another 30M (should take you 4yrs) to construct houses that will fetch you over 400k a month? You can then come back in 8yrs and play golf at Karen all day and night.Otherwise I find it silly for old Wazees who are 40yrs plus consulting in IT day and night. Formally employed people often live their employers' dream & forget about their own.
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Rank: Member Joined: 1/22/2011 Posts: 322 Location: Chicago, IL, USA
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@Obi 1 Kanobi, I have a lot of Kenyan friends here in the US, and what I know is the result of a good amount of research.
@gathinga, that is $35 million dollars, that's correct. When it comes to buying companies, that isn't a lot of money. It is quite doable to raise that kind of money from investors and other sources, run book, roadshow, and buy a controlling interest. Remember, rich people love to invest. If I have a plan to turn it around and make it highly profitable, and I'm the guy that can get it done, and can convince investors of that, 35 mil ain't nothin' but a number. By the way, thank for for the private equity information. I will certainly look into that.
@pablo and bird_man, I just want to clarify... what you are telling me is that if I show up with 30mil Ksh, or US$375k, that I can build a multi-unit residential property that will make me 232,000Ksh/$US2900 a month, in which I can live quite nicely in a Nairobi suburb? If so, that's very doable.
If that's the case, should I get a plot or two now, and then develop it when I get there? I like how that sounds. Thank you both.
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Rank: Member Joined: 1/1/2011 Posts: 396
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Jasonhill: U sound like a man with a plan. I suspect u r validating your decision. The advice so far has been spot on...property is your absolute best option if you can secure a separate income stream for your lifestyle / or adjust it downwards! Main thing is to separate your business from your living expenses. Most of the property moguls I know in Kenya were happy to live off their spouses'/their own meagre income as the portfolio grew. Even to date they are landlords to tenants with better cars than their own! Best of luck and give us a shout when you get settled in.
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Rank: Elder Joined: 6/27/2008 Posts: 4,114
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half acre in Kile-Lavi will put you back Sh70m Put up 8 units of apartments at say, another Sh30m Rent them out at Sh60k each Live in one of them if you want... Total Expenses = SH100m (US$ 1.25m) Income = Sh455k pm assuming you are living in one of them... Pay tax of Sh80k pm and you are left with sh375k... remember, your housing is already taken care of.... you have enough for a good life! Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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Rank: Elder Joined: 6/27/2008 Posts: 4,114
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....lead time: 36 months Current rents are ABOVE sh70k for new units, but there is an oversupply. So to fill up your units, you can under-price to sh65k Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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Rank: Member Joined: 3/17/2008 Posts: 567 Location: Nairobi
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@jasonhill
A quarter acre in a place like Ngong, Kiserian, Uthiru etc is possibly about 7-8M. Construction costs @ 14,000 per SqM for 20,000 sq ft (1 sqM = 10.77SqFt) totals up to about 32 - 33M.
If these are 25, 2br flats your rental could anywhere between 350k - 400k.
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Rank: Veteran Joined: 4/16/2010 Posts: 906 Location: Nairobi
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mukiha wrote:half acre in Kile-Lavi will put you back Sh70m
Put up 8 units of apartments at say, another Sh30m
Rent them out at Sh60k each
Live in one of them if you want...
Total Expenses = SH100m (US$ 1.25m)
With prices like these people are still touting real estate as the best investment?! 1.25 million dollars should buy you a mansion in the Hamptons, not an apartment block in Lavington! Surely there must be some better underpriced assets in this Kenya
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Rank: Member Joined: 6/23/2010 Posts: 182 Location: Kenya
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KenyanLyrics wrote:mukiha wrote:half acre in Kile-Lavi will put you back Sh70m
Put up 8 units of apartments at say, another Sh30m
Rent them out at Sh60k each
Live in one of them if you want...
Total Expenses = SH100m (US$ 1.25m)
With prices like these people are still touting real estate as the best investment?! 1.25 million dollars should buy you a mansion in the Hamptons, not an apartment block in Lavington! Surely there must be some better underpriced assets in this Kenya @KenyanLyrics, did you really understand or did you read the thread to understand what's being discussed before commenting? I really doubt you did.
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