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10-12M mortgage
enyands
#41 Posted : Saturday, May 14, 2016 3:19:01 PM
Rank: Elder


Joined: 12/25/2014
Posts: 2,300
Location: kenya
obiero wrote:
heri wrote:
Obi 1 Kanobi wrote:
Its a no brainer, take the mortgage quick quick.

The test is simple, its a good deal as long as the interest component of the monthly payments are lower than the rental incomes. Principal component is an investment.


@Obi, i have never looked at it this way. I always check if the rent income will cover both the loan interest and the principal repayment.

Even at an interest rate of 6% the rental income will not cover principal plus interest
.



Mark you there are some rental houses that have been empty and takes awhile to fill it up. If you take a loan for such and investments and is not filled up, then be ready to take HB pressure medications.
Thitifini
#42 Posted : Monday, May 16, 2016 12:07:00 AM
Rank: Member


Joined: 1/15/2015
Posts: 681
Location: Kenya
N.B. 1)You can get the loan to build as long as it's residential house and you have the title to land you are to build on.
2) you can change jobs in between repayments periods as long as you can secure non-paid leave for "capacity building" (easy if in good relationship with chief executive).

I am taking the loan. Building on a 1/4 which I own. Calculations: am paying rent 38k pm, if I take 6M loan I repay 34k pm on the loan+interest, which will be less than the current rent after completion in 6months (say Jan 2017). I'm at preliminary stages of application.

My plan, I was to construct anyway from some assignments I'm consulting. If I get the loan then I get the income from the consultancies to expand my biz.

In case the loan terms don't look good in say a years time, then I have the biz buy out the motgage in cash (it can afford to at current). I will have got some income either way from appreciation and profit from the freed-up cash.

60% Learning, 30% synthesizing, 10% Debating
UpcomingPaperChaser
#43 Posted : Monday, May 16, 2016 5:18:05 AM
Rank: Member


Joined: 1/20/2015
Posts: 489
Location: Nairobi
Thitifini wrote:
N.B. 1)You can get the loan to build as long as it's residential house and you have the title to land you are to build on.
2) you can change jobs in between repayments periods as long as you can secure non-paid leave for "capacity building" (easy if in good relationship with chief executive).

I am taking the loan. Building on a 1/4 which I own. Calculations: am paying rent 38k pm, if I take 6M loan I repay 34k pm on the loan+interest, which will be less than the current rent after completion in 6months (say Jan 2017). I'm at preliminary stages of application.

My plan, I was to construct anyway from some assignments I'm consulting. If I get the loan then I get the income from the consultancies to expand my biz.

In case the loan terms don't look good in say a years time, then I have the biz buy out the motgage in cash (it can afford to at current). I will have got some income either way from appreciation and profit from the freed-up cash.


Your rent is twice Swenani's salary..........
Enjoy every moment of your life, you never know when your time will come.
Swenani
#44 Posted : Monday, May 16, 2016 12:48:02 PM
Rank: User


Joined: 8/15/2013
Posts: 13,236
Location: Vacuum
UpcomingPaperChaser wrote:
Thitifini wrote:
N.B. 1)You can get the loan to build as long as it's residential house and you have the title to land you are to build on.
2) you can change jobs in between repayments periods as long as you can secure non-paid leave for "capacity building" (easy if in good relationship with chief executive).

I am taking the loan. Building on a 1/4 which I own. Calculations: am paying rent 38k pm, if I take 6M loan I repay 34k pm on the loan+interest, which will be less than the current rent after completion in 6months (say Jan 2017). I'm at preliminary stages of application.

My plan, I was to construct anyway from some assignments I'm consulting. If I get the loan then I get the income from the consultancies to expand my biz.

In case the loan terms don't look good in say a years time, then I have the biz buy out the motgage in cash (it can afford to at current). I will have got some income either way from appreciation and profit from the freed-up cash.


Your rent is twice Swenani's salary..........


Life is not fairSad Sad Sad Sad
If Obiero did it, Who Am I?
Othelo
#45 Posted : Monday, May 16, 2016 1:18:59 PM
Rank: User


Joined: 1/20/2014
Posts: 3,528
Swenani wrote:
UpcomingPaperChaser wrote:
Thitifini wrote:
N.B. 1)You can get the loan to build as long as it's residential house and you have the title to land you are to build on.
2) you can change jobs in between repayments periods as long as you can secure non-paid leave for "capacity building" (easy if in good relationship with chief executive).

I am taking the loan. Building on a 1/4 which I own. Calculations: am paying rent 38k pm, if I take 6M loan I repay 34k pm on the loan+interest, which will be less than the current rent after completion in 6months (say Jan 2017). I'm at preliminary stages of application.

My plan, I was to construct anyway from some assignments I'm consulting. If I get the loan then I get the income from the consultancies to expand my biz.

In case the loan terms don't look good in say a years time, then I have the biz buy out the mortgage in cash (it can afford to at current). I will have got some income either way from appreciation and profit from the freed-up cash.


Your rent is twice Swenani's salary..........


Life is not fairSad Sad Sad Sad

While he enjoys more bread and fish in Wazua than the rest smile
Formal education will make you a living. Self-education will make you a fortune - Jim Rohn.
UpcomingPaperChaser
#46 Posted : Monday, May 16, 2016 11:24:32 PM
Rank: Member


Joined: 1/20/2015
Posts: 489
Location: Nairobi
Othelo wrote:
Swenani wrote:
UpcomingPaperChaser wrote:
Thitifini wrote:
N.B. 1)You can get the loan to build as long as it's residential house and you have the title to land you are to build on.
2) you can change jobs in between repayments periods as long as you can secure non-paid leave for "capacity building" (easy if in good relationship with chief executive).

I am taking the loan. Building on a 1/4 which I own. Calculations: am paying rent 38k pm, if I take 6M loan I repay 34k pm on the loan+interest, which will be less than the current rent after completion in 6months (say Jan 2017). I'm at preliminary stages of application.

My plan, I was to construct anyway from some assignments I'm consulting. If I get the loan then I get the income from the consultancies to expand my biz.

In case the loan terms don't look good in say a years time, then I have the biz buy out the mortgage in cash (it can afford to at current). I will have got some income either way from appreciation and profit from the freed-up cash.


Your rent is twice Swenani's salary..........


Life is not fairSad Sad Sad Sad

While he enjoys more bread and fish in Wazua than the rest smile


hahahaa.......vybe master, his baits have an accuracy of 99.99%
Enjoy every moment of your life, you never know when your time will come.
tnai9
#47 Posted : Monday, June 20, 2016 2:25:25 PM
Rank: Member


Joined: 6/21/2010
Posts: 345
Location: easto
Been house shopping a lot for my mortgage house and even went to the counties armed with advice from wazua. I come from the western part of the country and found a 4br bungalow in Eldy Kimumu-(Eldoret-Iten road) on a near quarter plot of land that is like 60m from the tarmac(agreed 7M with the owner)
The house is rented- 26k pm and there is big room for expansion both in front and behind(guy built the house at the center of the plot)
Rental returns are 12-13k for a 2br and 7-8k for 1 br. Fundis told me if I push in another 5m, rental income would easily go to almost 100k p.m.(6-2br)
For eldy, these returns are fairly good, and am may not be able to get such a deal elsewhere considering many factors.
But now to the elephant in the deal -- my people and my friends..a number of them are strongly discouraging me..that since am not a local and with our poisoned politics..its not a wise investment. Some history supports this argument and I had also thought about it in some way..

Its a slippery/controversial issue but objective advice is welcome.
I don't intend to stay in the house(s)
"The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence." ― Charles Bukowski
streetwise
#48 Posted : Monday, June 20, 2016 4:28:29 PM
Rank: Veteran


Joined: 6/23/2011
Posts: 1,740
Location: Nairobi
Nothing wrong about the location but one advise I will give you, It does not matter how much you will get from a nice looking investment venture, key understand the cost.

Remember a business makes losses when the cost is greater than the revenue
tnai9
#49 Posted : Monday, June 20, 2016 5:04:08 PM
Rank: Member


Joined: 6/21/2010
Posts: 345
Location: easto
streetwise wrote:
Nothing wrong about the location but one advise I will give you, It does not matter how much you will get from a nice looking investment venture, key understand the cost.

Remember a business makes losses when the cost is greater than the revenue


hmmm...d'oh! d'oh!

philosophical....
"The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence." ― Charles Bukowski
tnai9
#50 Posted : Monday, June 27, 2016 8:19:31 AM
Rank: Member


Joined: 6/21/2010
Posts: 345
Location: easto
Wazuans am considering the following options:
1 - Flat on mbagathi way-9.5M - rental return 50-55k
Advantages - Location, rental growth(will level off at sm point), can stay in it since am based in Nairobi
Disadvantages - apartment(inflexibility)

2 - Maisonette in Buru with an extension 9.3M - Total rental income 50k, main 35, ext 15k
Advantages - own title, can modify, can rent out the extension and stay in main, Cant miss tenant in case of renting
Disadvantages - hse within eastlands - slow rental growth, eastlands challenges--Outer ring completion may solve some

3 - Hse in a County HQ(main house + 2SQs) - 7.5M Rental income 50K
Advantages - Higher ROI that Nairobi, Own title, Can clear the mortgage faster and move onto something else.
Disadvantages - Will have to be a tenant now that am based in Nairobi..

4. House in county HQ with room for expansion - 7M , rental return 26K
Advantages - There is big room for expansion and growing the rent,House so close to the road, own title
Disadvantages - Capital for expansion not available immediately,

which option do wazuans lean towards?
"The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence." ― Charles Bukowski
iKenya
#51 Posted : Monday, June 27, 2016 9:12:07 AM
Rank: Member


Joined: 7/27/2008
Posts: 241
I think your decision is deciding between Capital appreciation and not high rental yields. Do you want after 10 years to have collected 10M in rent on a property you can only resale at what you bought it or, do you want to hold a property worth 20million but with 5M worth of rent collected to date. The younger you are the more I would encourage the capital appreciation route, however, since you are taking a mortgage, then the basic determiner will be how you will service it in a manner that the capital appreciation is not negated/consumed by the interest rate.
Quote:
Buy when there's blood in the streets, even if the blood is your own...
UpcomingPaperChaser
#52 Posted : Monday, June 27, 2016 11:55:11 PM
Rank: Member


Joined: 1/20/2015
Posts: 489
Location: Nairobi
Go to Bamburi in Mombasa. You can easily get a 1/4 acre for 3 million. With the remaining 9 million, build 9 hgihg standard bedsitters at 1 million each. a nicely finished bedsitter goes for 7-10k here, so we are looking at a gross monthly return of between 63 - 90k per month.

The advantage of this avenue is that, 9 bedsitters will barely occupy 1/8th of an acre. That means you will still have another 1/8th of an acre awaiting development in the future.

Another advantage is that the bedsitters will occupy the ground floor hence leaving you with room for additional floors upwards.

If you are serious with this, i could carry out a detailed feasibility study for you with figures and numbers involved.
Enjoy every moment of your life, you never know when your time will come.
tnai9
#53 Posted : Tuesday, June 28, 2016 8:38:31 AM
Rank: Member


Joined: 6/21/2010
Posts: 345
Location: easto
UpcomingPaperChaser wrote:
Go to Bamburi in Mombasa. You can easily get a 1/4 acre for 3 million. With the remaining 9 million, build 9 hgihg standard bedsitters at 1 million each. a nicely finished bedsitter goes for 7-10k here, so we are looking at a gross monthly return of between 63 - 90k per month.

The advantage of this avenue is that, 9 bedsitters will barely occupy 1/8th of an acre. That means you will still have another 1/8th of an acre awaiting development in the future.

Another advantage is that the bedsitters will occupy the ground floor hence leaving you with room for additional floors upwards.

If you are serious with this, i could carry out a detailed feasibility study for you with figures and numbers involved.

@PaperChaser,
We are only allowed to buy residential houses otherwise commercial property was the way to go.

I have narrowed down to two options
The apartment on Mbagathi way, majorly because of location and anticipated capital gain and the Houses in the County HQ coz of slightly higher returns and a lower initial cost.

Where are the investment analysts?
"The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence." ― Charles Bukowski
UpcomingPaperChaser
#54 Posted : Tuesday, June 28, 2016 3:27:11 PM
Rank: Member


Joined: 1/20/2015
Posts: 489
Location: Nairobi
tnai9 wrote:
UpcomingPaperChaser wrote:
Go to Bamburi in Mombasa. You can easily get a 1/4 acre for 3 million. With the remaining 9 million, build 9 hgihg standard bedsitters at 1 million each. a nicely finished bedsitter goes for 7-10k here, so we are looking at a gross monthly return of between 63 - 90k per month.

The advantage of this avenue is that, 9 bedsitters will barely occupy 1/8th of an acre. That means you will still have another 1/8th of an acre awaiting development in the future.

Another advantage is that the bedsitters will occupy the ground floor hence leaving you with room for additional floors upwards.

If you are serious with this, i could carry out a detailed feasibility study for you with figures and numbers involved.

@PaperChaser,
We are only allowed to buy residential houses otherwise commercial property was the way to go.

I have narrowed down to two options
The apartment on Mbagathi way, majorly because of location and anticipated capital gain and the Houses in the County HQ coz of slightly higher returns and a lower initial cost.

Where are the investment analysts?


For the Mbagathi apartments, you say the rent is about 55k, you forgot to factor in service charges which is compulsory in apartments. so we are looking at about 10k off the 50k.......

As for teh county one, you ought to realize that capital appreciation outside the biggest towns in kenya is very minimal. so for a 12 million house, you might find it to be worth only 15 million in ten years time.......

option of last resort, scout for those Mombasa Road apartments going for 4 - 4.5 million like Sunset Boulevard and Sheshe where the rent is about 20 - 25k per month, for 12 million, buy 3 of them. hence an anticipated gross income of between 60 - 75k. the advantage of this is that the appreciation will be threefold as each apartment will appreciate in value independently!!!!
Enjoy every moment of your life, you never know when your time will come.
tnai9
#55 Posted : Tuesday, June 28, 2016 5:16:43 PM
Rank: Member


Joined: 6/21/2010
Posts: 345
Location: easto
UpcomingPaperChaser wrote:

For the Mbagathi apartments, you say the rent is about 55k, you forgot to factor in service charges which is compulsory in apartments. so we are looking at about 10k off the 50k.......

As for teh county one, you ought to realize that capital appreciation outside the biggest towns in kenya is very minimal. so for a 12 million house, you might find it to be worth only 15 million in ten years time.......

option of last resort, scout for those Mombasa Road apartments going for 4 - 4.5 million like Sunset Boulevard and Sheshe where the rent is about 20 - 25k per month, for 12 million, buy 3 of them. hence an anticipated gross income of between 60 - 75k. the advantage of this is that the appreciation will be threefold as each apartment will appreciate in value independently!!!!


The service charge is excluded and paid separately. For the Mbagathi way flat, its 3k. We are only allowed to buy one house at a time
"The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence." ― Charles Bukowski
SKAS
#56 Posted : Wednesday, June 29, 2016 2:05:54 PM
Rank: Hello


Joined: 6/29/2016
Posts: 1
@ UpcomingPaperChaser please send me your email we talk on the Bamburi Plots and construction my email is chandra.kunder@philips.com

tnai9
#57 Posted : Thursday, June 30, 2016 9:33:58 AM
Rank: Member


Joined: 6/21/2010
Posts: 345
Location: easto
deleted



"The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence." ― Charles Bukowski
UpcomingPaperChaser
#58 Posted : Friday, July 01, 2016 12:22:32 AM
Rank: Member


Joined: 1/20/2015
Posts: 489
Location: Nairobi
SKAS wrote:
@ UpcomingPaperChaser please send me your email we talk on the Bamburi Plots and construction my email is chandra.kunder@philips.com


Already done that
Enjoy every moment of your life, you never know when your time will come.
Kim Ani
#59 Posted : Wednesday, July 06, 2016 8:08:32 PM
Rank: New-farer


Joined: 1/16/2010
Posts: 15
I am in a similar dilemma....

I came across the below and I'm thinking i could perhaps start with the little i have to build the shell then pole pole

http://www.nation.co.ke/...l/-/pa2n76/-/index.html

tnai9
#60 Posted : Thursday, September 08, 2016 8:21:58 AM
Rank: Member


Joined: 6/21/2010
Posts: 345
Location: easto
Jon Jones wrote:

If its possible to get the cash 12 million, buy an eighth in a satellite town like Ruiru...build bedsitters and you will be smiling all the way to the bank.


I am working on an arrangement that will get me this money cash, but scaled down to about 9M. It will be mortgage money but diverted to my account.
I intend to clear the mortgage in 5yrs. Wazuans, what most lucrative business can I do with 9M. I am thinking RTO. I would buy the house, but dont think 60K pm rent from a 9M house is the best return.
Am thinking of...
1. Car business
2.
3.

Wazuans ideas..Ill have the money by December 2016
"The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence." ― Charles Bukowski
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