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Stocks vs Land (A 5 - 10 year window)
MaichBlack
#1 Posted : Tuesday, March 30, 2010 6:23:40 PM
Rank: Elder

Joined: 7/22/2009
Posts: 7,838
Supposing I wanted to build myself a house somewhere along Thika Road in say five to ten years, would it be advisable to buy the plot now and let it lie idle for those years or use the cash I have to buy shares at the NSE with a view selling the shares and buying myself a plot when I'm ready to build.
The price of land will most probably appreciate and I might be forced to buy the land at approx. 4 times the current price (or more) in five years. Any stocks (specific counters) that can yield much more than that in five years?
I know there are no definite answers to some of these questions - or we would be ALL stinking rich - but a critical analysis by group of sharp minds goes a long way in providing direction.
Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
yekeyeke
#2 Posted : Tuesday, March 30, 2010 6:41:17 PM
Rank: Member

Joined: 6/4/2008
Posts: 345
Maich

I would advice you buy the land and not the shares.
why: The value of land especally on thika road is going up very fast. And i mean FAST. Like 200% per year since 2008.
If you hold on and buy stocks, who knows what will happen in 2012 and where the NSE will go again. From 5600 points to 3200 or worse??!!

Then again its your choice but i dont see any counter or group of counters giving you an growth of 200% or even 100% in any year. So what will happen if you buy stocks is that you will simply be edged out by the capital gains on land.
This is my advice. To see why i have this view, read below article. and PLEASE let me have your views.

http://www.businessdaily.../-/1kql4iz/-/index.html
sparkly
#3 Posted : Tuesday, March 30, 2010 10:43:59 PM
Rank: Elder

Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
@yekeyeke read up on risk - return pay off. No way you can have a return of 200% on land with a 0% risk. Well noted on the nse index though, it can move to 3200 or 10,000 thats the risk- return pay off. Risk of assets is generally as follows: savings account, term/fixed deposits, treasury bills, land, bonds, stocks. Its unrealistic to expect a 200% return from idle land in one year unless you strike gold. Remember it will have maintenance costs like rates and at onset you also pay legal fees, stamp duty & registration fees.
Life is short. Live passionately.
wanduni
#4 Posted : Tuesday, March 30, 2010 11:52:33 PM
Rank: New-farer

Joined: 3/30/2010
Posts: 1
Location: London
I do not have much experience with shares, however for land along Thika Rd, you could be 100% sure its value will have gone up. Wih shares there is no guarantee to have any significant added value...you may or you may not. if i were you, i would go for land. The final decision is yours!!
kadonye
#5 Posted : Wednesday, March 31, 2010 5:25:33 AM
Rank: Elder

Joined: 5/30/2009
Posts: 1,390
It would take a guru in stocks to beat the gains made in real estate along such a promising corridor.
What a wicked man I am!The things I want to do,I don't do.The things I don't want to do I find myself doing
muganda
#6 Posted : Wednesday, March 31, 2010 6:28:14 AM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
Kenyans love and understand land. So the more rational view is to buy some land and a little stock - very secure.

But in my opinion land is often an end game. I know there's always the capital gains but many continue owning the asset and make money from the rent.

I believe true wealth lies in creating wealth. So if you use the land/stock to make alot of cash (not just value) that you can use to take advantage of an opportunity to create more cash etc etc.
kadonye
#7 Posted : Wednesday, March 31, 2010 6:36:16 AM
Rank: Elder

Joined: 5/30/2009
Posts: 1,390
Your goal looks clear:to construct ua hse, not speculation.then it wld be better to make steps towards it.Look 4 a plot in a place u desire,buy it n fence it.That way you'll save on the land cost.The stamp duty is a 1 off thing, the rates are low n u can have arrears 4 aeons.u can use this land as security 4 a loan/mortgage...peni zangu mbili
What a wicked man I am!The things I want to do,I don't do.The things I don't want to do I find myself doing
Wa_ithaka
#8 Posted : Wednesday, March 31, 2010 6:53:22 AM
Rank: Veteran

Joined: 1/7/2010
Posts: 1,279
Location: nbi
Buy rand-Kenyans understand it...
The Governor of Nyeri - 2017
B.Timer
#9 Posted : Wednesday, March 31, 2010 7:38:33 AM
Rank: Veteran

Joined: 5/31/2008
Posts: 1,076
Land any time.
Appreciation in land is sure whereas stocks move in either direction - and the posibility of eating into the capital are real.

Yearly apreciation in land within the greater Nairobi is anywhere btn 50 - 150% depending on what's happening in the area. A stock can stay dormant indefinitely - Take for instance the course taken by Mumias in last 3-5years and imagine you had joined then. Contrast this by finding out the trend in cost of land at the area of your choice in the same period.

Stocks are hyper sensitive to political climate not so for land.
Even weather conditions could mean you losing a chunck of your money in stocks which doesnt aply to land in Nairobi.
Those who bought Safaricom at IPO are largely on the same spot while anybody who bought land then is anywhere near doubling their money.
We can go on and on.
Bottom line-

Go for land.

There after you may try you hand at stocks for speculative purposes.
Dunia ni msongamano..
yekeyeke
#10 Posted : Wednesday, March 31, 2010 8:41:39 AM
Rank: Member

Joined: 6/4/2008
Posts: 345
Wewe Sparky wacha kiswahili mob. Hata sisi tulienda shule. But it looks like you missed something from the original request. The guy is looking for land, not just any land , but land along THIKA ROAD. Read again . Land along THIKA ROAD. Now lets take your education and look at what is happening along THIKA ROAD. We can see that this THIKA ROAD is in nairobi north. Nairobi north is where the majority of Nairobi's and kenyas rapidly growing middle class resides.
Then angalia tena. The government has contrcats three chinese companies to build the first express way in East and Central Africa. This express way, that has been desined for high speed driving, has eight lanes. Not two or three like you have most likely seen elswhere.
There there are the two bypasses. Eastern and Northern.
Where else in nairobi, kenya or eastern africa do you find this sort of thing going on.
There there is the post election violence.....and 2012 on the way...
Kama umesoma economics, as you sound like, si hii ndio intaitwa special circumstances?
Kama ndio hiyo, basi kwa nini angalile stocks. This to me is simple and straight...
Anunua shamba saa hii otherwise asiponunua atabakia na thuo investment compoany land thats way past thika town....

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