My friend saw an advert in the paper early this week. She called her close friends about this opportunity of a lifetime. We shared in her excitement as indeed it sounded like a really super deal.
A company that puts up ‘affordable’ housing units had an offer on their houses for cash buyers. Two-bedroom units which they usually sell at Sh6 million was going for Sh3 million.
A fabulous deal, it sounded. To make it more palatable was the advert in the newspaper that presented the real deal for someone looking for a home to buy near the city.
My friend could easily raise the money with support of her friends and family to top up an emergency loan she would borrow from the bank.
I recommended that before she signs for the deal, we first go and assess the property. Five of us set out for our friend’s newest investment-to-be in Athi River, Machakos County.
The location was superb. We felt we were in for a great bargain especially when one of the workers at the site offered to show us a ready apartment.
First sign that things were different from what we saw in the paper was the fact that the beautiful balconies presented to potential buyers had been pulled out to create more space for the sitting room.
But this fact was hidden. I read deception here but kept mum as I did not want to discourage my friend from the onset.
The rooms were extremely tiny, fit for a 3ft by 6ft bed. There was hardly enough extra space for a study table. The DSQ they had proudly advertised as being self-contained was smaller than a normal kitchen store and it is designed for just a two-foot bed (imagine) and nothing else, not even a seat!
When the tour was over after about six minutes, I studied my friend’s face; it was a mask of disappointment.
“It is a bad house,” she hissed out, “I am sorry I thought it was a deal.” We let the disappointment wear off before we talked about this big lie.
Imagine there are people who rushed to the bank to borrow money to buy these homes at the apparent ‘good’ price and got a really raw deal.
My friend’s experience has enlightened her on what to do before buying property.
Do your homework: Before you make up your mind about a property, check it out. There are people who have bought land through a newspaper advert or word of mouth only to discover that it is a swamp! Or there is no access to the said property.
Check out the legality of the property – are the rates paid up? Are you buying from a genuine owner or a conman? You must go out of your way to establish these facts before you put your money, however little, in any property.
Do the math: If you buy for speculative purposes, you need to be diligent too. Where there are hundreds of apartments being sold by a developer, how easy will it be for you to sell it at a profit?
Consider all angles: For rental purposes, you must also assess the distance to the road, the condition of that road and safety of your tenants.
Remember tenants have a wide selection to pick from and they may not necessarily choose yours. There is the chance that your apartment/flat can remain empty for many months, affecting your income flow plan.
Keep options open: Always keep in mind that a developer’s sole purpose is to make money and attractive profits. Therefore, if a house you have identified is on the outskirts of Nairobi or any other town and land is still affordable, it will make more business sense to buy land nearby and put up your own home.
The beauty of this option is that you construct a house according to your standards and have enough space to have a garden and plant some trees.