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Real Estate Investment strategy- Advice Needed
mibbz
#41 Posted : Sunday, September 02, 2012 11:24:48 AM
Rank: Member

Joined: 2/18/2011
Posts: 448
actually if you check the sqm per house and multiply with what A4architect says,you shall notice the huge price discrepancy.eg he says a high quality finish apartment eg in kileleshwa costs around 35k per sqm.now the lynx 1 bedroom is 27 sqm and costs 3.2mil cahs,3.6 mortgage.do the math......
jaggernaut
#42 Posted : Sunday, September 02, 2012 12:31:27 PM
Rank: Elder

Joined: 10/9/2008
Posts: 5,389
kaifastus wrote:
What's this crave about suraya? Some1 please make me understand. With 1.5 to 2.5m you can get a clean 50x100 or 40x80 plot. Use 3 to 4m to construct the first floor of 6 one bedroom rental houses. Rent them out for 5k to 7.5k a month. I am talking from experience.
Interesting. What's the size of each unit, the rooms?
guru267
#43 Posted : Sunday, September 02, 2012 4:09:50 PM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
kaifastus wrote:
With 1.5 to 2.5m you can get a clean 50x100 or 40x80 plot. Use 3 to 4m to construct the first floor of 6 one bedroom rental houses. Rent them out for 5k to 7.5k a month. I am talking from experience.
Let me get this straight! if i invest 4.5m and rented out each unit at 5k i would be earning 360k p.a! (8% yield) If i invest 6.5m and rented out each unit at 7.5k i would be earning 540k p.a! (8.3% yield) These yields still do not match up to the interest rate on bonds and dividend yields on some stocks.. Especially if you factor in the stress of housing development and the costs of maintenance and agents commission
Mark 12:29 Deuteronomy 4:16
kyt
#44 Posted : Sunday, September 02, 2012 4:57:36 PM
Rank: Elder

Joined: 11/7/2007
Posts: 2,182
that is a sober reflection guru. i think houses are really pain. some tenants are just too much stress. especially the low cost housing. 2000-3000. a guy can complain hata stima ya 150. stress i tell u.
LOVE WHAT YOU DO, DO WHAT YOU LOVE.
kaifastus
#45 Posted : Sunday, September 02, 2012 5:22:49 PM
Rank: Member

Joined: 8/17/2011
Posts: 207
Location: humu humu
guru267 wrote:
kaifastus wrote:
With 1.5 to 2.5m you can get a clean 50x100 or 40x80 plot. Use 3 to 4m to construct the first floor of 6 one bedroom rental houses. Rent them out for 5k to 7.5k a month. I am talking from experience.
Let me get this straight! if i invest 4.5m and rented out each unit at 5k i would be earning 360k p.a! (8% yield) If i invest 6.5m and rented out each unit at 7.5k i would be earning 540k p.a! (8.3% yield) These yields still do not match up to the interest rate on bonds and dividend yields on some stocks.. Especially if you factor in the stress of housing development and the costs of maintenance and agents commission
Guru its impossible to objectively compare stocks, real estate and bonds. One thing is clear though you need a mix of the three in your portfolio. Your analysis above of 8%to 10% is true for rental yields. What amaze me with real estate is that cost of material labor and land rises up so rapidly each year such that if you flip it in 10yrs you will realise tidy sum. Stocks also give capital gains,but the risk levels are very high. The investor need to be very good to take advantage of the cycles and also manage stress! Of which you are guru.
guru267
#46 Posted : Sunday, September 02, 2012 5:54:33 PM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
kaifastus wrote:
Stocks also give capital gains,but the risk levels are very high.
Risk is only high when you want to jump in & out of stocks... 1. If you buy and hold a blue chip stock yielding 10% in dividends for 10years just like you would a rental i believe the risk is minimal... 2. Dividends increases from blue chip stocks year on year will far outpace increase in the rent from your units. 3. The capital gains in stocks over 10 years far outpace those of real estate unless there is a global financial crisis! smile 4. Far, far, far less hustle in holding a stock as opposed to a rental unit 5. Tax benefits.. (5% dividend tax as opposed to 30% rental tax) 6. Far less paper work and risk of fraud in stocks as opposed to real estate! 7. Easier liquidity if a blue chip stock is selected.
Mark 12:29 Deuteronomy 4:16
kaifastus
#47 Posted : Sunday, September 02, 2012 6:50:26 PM
Rank: Member

Joined: 8/17/2011
Posts: 207
Location: humu humu
Consider real estate as a bissiness guru. Blue chip companies are subject to same tax obligations as any business be it real estate. Pple who invest in shares do so with funds realised from business and/or emploment.others start businesses from scratch and later list such business. Again guru Dividends will therefore be a function of profits realised. The multiplier effect of having a business worth 10 m is greater than buying 10m worth of blue chip shares. Equity,suraya projects and other companies were started as businesses. I can't imagine what couldave hapened if their owners bought eabl shares instead.
kyt
#48 Posted : Sunday, September 02, 2012 8:48:48 PM
Rank: Elder

Joined: 11/7/2007
Posts: 2,182
they would have owned (i think), by now.
LOVE WHAT YOU DO, DO WHAT YOU LOVE.
kyt
#49 Posted : Sunday, September 02, 2012 8:54:03 PM
Rank: Elder

Joined: 11/7/2007
Posts: 2,182
i think guru was alluding to returns of stocks investing (dividents vs rental income). as for capital gains, suraya loan that money albeit at a low interest rates (5-7% maybe) so the returns will be modest.
LOVE WHAT YOU DO, DO WHAT YOU LOVE.
40by40 100by50
#50 Posted : Sunday, September 02, 2012 11:26:37 PM
Rank: Hello

Joined: 9/1/2012
Posts: 4
@kaifastus... good stuff...
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