Are you still renting a home or apartment
for yourself or your family? If so, you're losing money. Besides losing out on
making money with Kenya real estate industry, renters don't get the same
satisfaction of home enjoyment that benefits home buyers. If you're renting,
find out how to buy your own home
If so, you're losing money. Think about
these three ways you lose money by renting:
1.
You're paying for someone else's mortgage payment. You're missing out on
the appreciation that the property gives to the landlord. Appreciation is a
term used in accounting relating to the increase in value of an asset, which
means in real estate terms, added value to the property. Over the past five
years, houses appreciated significantly all over the world especially Kenya
real estate, making many new real estate investor multimillionaires.
2.
Renters don't get to freeze their monthly housing expenses like home
buyers can. Of course, many home buyers get mortgage payments with adjustable
interest rates and their payments go up over time. However, these payments will
not go up over the long term like rising rents. Just think about how much an
apartment costs today compared to ten years ago. A two bedroom apartment in
Kenya, Kileleshwa leases for Kshs 90,000 today. The exact same apartment rented
for Kshs 30,000 in 1995, when it was brand new. Home buyers who had low monthly
payments in 1995, who did not refinance their mortgage, enjoy low payments and
don't have to worry about rising rents.
3.
Renters don't benefit from tax advantages. Home owners get income tax
deductions. Tax deductions for interest costs, for instance, save tax payers
millions of shillings.
Emotional
Satisfaction of Home Ownership
Besides losing out on making money with Kenya
real estate, renters don't get the same satisfaction of home enjoyment that
benefits home buyers. Many landlords won't allow you to paint your walls in
colors that you desire. Also, you won't feel like fixing up the property with
custom window coverings and you get little say in flooring materials. Because
you can't make your personal statement, you won't feel like you're HOME as much
as home owners who feel emotionally connected to their property.
How
to Buy Your First Home
The biggest barrier to home ownership is
often accumulating funds for a down payment. People think they have to have
millions of shillings for a down payment. However, if you have good credit and
a decent job, you can get a mortgage for a home with zero down. And you can
finance some of your closing costs as well as ask the seller to help you pay a
good portion of your purchase costs. With today’s mortgage finance plans, you
may be surprised to find out how much of a home you can afford with payments
similar to what you currently pay in rent.
You may have to go out of the major
metropolitan areas to buy a home. That's why so many people commute in ongata
rongai-Kenya. Affordable housing costs much less in outlying areas. But so do
the rents. If you're renting an apartment for Kshs 200,000 in Kitusuri, you
could buy a Kshs 15,000,000 home in Thika road. A friend just purchased a home
in December 2012 and his mortgage payment, for a 3,000 square foot new home,
costs less than Kshs 2.5M. With his tax savings, he will pay even less than
renting a small apartment closer to the capital: Nairobi precinct.
If these amounts sound high to you, check
your local area. Perhaps your monthly rent is only Kshs 80,000 and houses cost
less than Kshs 17.5M. Talk to a mortgage loan officer and see how much of a
home you can afford.
If you're renting, make one of your
priorities to buy your own home in Kenya real estates sector. More information
visit www.kenyan-real-estate.com
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