Are you looking at home ownership as a means of wealth creation or as a consumer good?

Let us define the two scenarios

Consumer good

1. Looking at home ownership as a means of satisfying an immediate need, e.g., I want to be close to a certain school, or a certain office etc
2. Buying or building a property that will NOT appreciate in value. Read how stand alone houses depreciate in value and how apartments depreciate in value
3. Realizing  that by the time you pay off the loan / mortgage you took to buy or build the house the value of your house will be less than the total loan and interest repayment. Click here to see a worked example.
4. Realizing that the rent you are likely to get from the house is less than Kshs 1 for every Kshs 100 that you invest.

Means of wealth creation

1. Knowing that living in a certain area might be a bit inconveniencing but you are aware of anticipated growth in land values because of mega projects that will take place in the near future.
2. Appreciating that the house can earn you some money either through renting out space, having a cottage industry or that the space remaining in your compound can accommodate another house which you can put up pole pole and eventually sell it or rent it out.
3. Having understood the above, you realise that the “consumer good” characteristics listed above do not apply.

Do you have to choose between the two or can you get the best of both?

Are you thinking of building or buying a residential house or land? Talk to me, I might have an insight or two to share. info@kariukiwaweru.com

Valuer Kariùki MISK, RV, MRICS

Registered & Practicing Valuer

Chartered Valuation Surveyor.