To Buy, To Build or To Rent is the big question


08 Sep 2015 | by
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To Buy, To Build or To Rent is the big question

The biggest question currently running through the minds of most middle class Kenyans is whether they should buy a home, build a home or keep on renting...................

The biggest question currently running through the minds of most middle class Kenyans is whether they should buy a home, build a home or keep on renting. The largest population of this class happens to be residents of the major cities within country. As I mentioned in an earlier article, the demand for housing far supersedes the supply thus leaving residents at the mercy of their landlords and land-ladies. 

Taking into consideration that this population that is being targeted for the middle class housing projects already has its market niche cut out as far as rental is concerned, it is imperative that their standards of living is either maintained at the same level in house design and amenities, or something higher is created for them.  They are most likely to be found living in areas like Langata, South B, Ngumo and the likes and so we cannot expect them to buy their residential homes in areas they consider lower than their class. This brings up the challenge of whether they should build homes, buy ready-made homes or keep renting.

BUILDING:  This option exists only for the individual who has time in his/her hands, as well as the will power to fight “fundis” and keep track of the materials, both ordered to be delivered to site and those in the site stores and how the materials are being used. Of great emphasis is the fact that we are talking about the middle class individual, who most likely is employed in an office running an 8am to 5pm job. These are the people who drive the Kenyan economy literally.From experience, this option ends up wasting both time and money for the ‘would be’ home owner, leading to frustrations. More often than not, the owner is forced to move into an incomplete house, hoping to finish it before the children are old enough to move out and live on their own.

For this reason, we came up with a concept of building homes for the individuals with land. That way, Nature green manages the whole process of construction from the approval stages to the final handing over of the home, complete with the occupation certificate from the relevant authorities.  We then are bound by the agreement to take care of liabilities that may rise after the owner taking occupation of the house so we make sure we do a thorough job. It is a fast growing home development option.

BUYING:  It is the preferred option for most individuals because it involves an already built unit that is tangible. This is the mortgage provider’s playing field. It minimizes the risk of being given a raw deal since you are buying what you can see. This option is also first evolving. Buying a house off plan (Before actual construction) gives the home owner the chance to customize their units as well as follow up on it during the construction period. This enables the buyer to know the quality of items being used for his/her house. It is a very good option because houses are normally sold cheaper to those who buy off plan.  The rationale for this is that they reduce the developers risk by offering ready buyers at the end of the construction. They also reduce marketing costs. The other advantage of buying off plan is that one can have the house design and finishes customized. You get to have a say on what to want included in your house at a very early stage.  This is my most preferred option because it offers a win-win situation.

Besides the off plan purchase, one may decide to buy a complete house as is upon completion. You buy what you can see. It is the traditional method, tried and tested over the years. It seldom disappoints. Mortgage providers offer some well coveted services in this arena. The trick however is that you take a mortgage for the longest duration and pay it fully in the shortest time possible. That way you get the best deal. Before committing to any bank make sure that they will not penalize you for lump sum payment of the facility.

KEEP RENTING: Renting is ideally not such a bad idea for the person who has no intention of living in a certain locality for the rest of their lives. However it has proven to be very costly, much like living in a hotel room for a long time period. For those with the mind for investing, you may note that for you to own a home valued at KShs. 6 Million, the monthly mortgage payment will be anything between KShs. 50,000/= and KShs. 70,000/= depending on the choice of bank as well as the repayment duration. The aforementioned figures are similar to those that you will pay on rent for a house with the same qualities. The disadvantage is that whatever you pay in rent ends up being a sunk cost, while mortgage payment gives you an ownership edge.

One may choose to rent a house to live in after buying their first home. This releases their finances buy allowing them to either rent it out if they don’t need all that space, or refinance the mortgage for future developments or investments.The bottom line is that a good roof over your head is a dream worth being pursued by all.

 

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