Let us define the two scenarios Consumer good 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 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 Realizing  that by the time you pay off the loan / mortgage...

A few weeks ago, I learned of a young man (let’s call him Peter) who had lost his job because their organization had shut down it’s operations and sent everyone home due to COVID 19. I can imagine the confusion and pain of not being able to provide for his wife and 2 young kids. I’m sure this is the unfortunate situation in many organizations. I’m writing to John and other young men like him....

Today we look at stand alone houses. Recently we saw how apartments depreciate in value. Read more about that here Scenario 1 John* builds a stand alone residential house in an uncontrolled area with the following neighbors. Single rooms made of iron sheets on one side A hostel with 6 floors towering over on the other side A church on the other side A boda boda stage on the front side. He...

For about a decade, I have worked as a valuer (some pronounce it as varier, others varuer). Click here to learn more about what a valuer does. I have seen properties appreciate in value from 1m per plot to 10 million per plot in 10 years. I have also seen properties (both stand-alone and apartments) lose value from 12 million per unit to 7 million per unit in 10 years. What went wrong for the person (Call...

Recently, a friend called me (let’s call him James) and said that he was coming to Thika road and that I should go and help him check out an apartment that was on sale. I went and found him looking all excited that he had found what he had been looking for. An affordable apartment in a block of 3 floors is located in a master planned estate with the following features; many green spaces complete with...

In the spring of 1822 an employee in one of the world’s first offices – that of the East India Company in London – sat down to write a letter to a friend. If the man was excited to be working in a building that was revolutionary, or thrilled to be part of a novel institution which would transform the world in the centuries that followed, he showed little sign of it. “You don’t know how wearisome...

If you own a home, you’ve probably been sold on the benefits of a shorter mortgage or heard it’s wise to pay more than the minimum so you can pay it off sooner. I was actually exposed to this idea before I owned a home, in my high school math class, when our teacher espoused the virtues of a shorter mortgage. I rushed home and breathlessly asked my mom, “Mom, do we have a 15 year mortgage? If...

What is valuation? The valuation of property has long been characterised as both an art and a science: an art because of the need to make value judgments concerning the intangible features that attract certain buyers; a science because it is possible to establish trends and analyse how these are interpreted by buyers and sellers, including the value placed on particular property...

When I wrote an article a few months ago about how to protect against colossal loss in a strange investment environment, little did I know that a major sell-off was just around the corner. My argument was based solely on the combination of very optimistic market prices and general investor complacency about risk. These factors argued for guarding your wealth against unforeseen negative outcomes. My...

With global stock markets tanking and coronavirus cases rising rapidly in Asia, Europe and North America, politicians around the world are racing to unveil emergency measures to help the economy weather the storm. In Italy, where the entire population of 65 million has been under lockdown since early this week, the country’s finance minister has announced a policy that has earned some attention:...