Well, everyone wants to invest in land, wouldn’t you? Land is always appreciating and besides, you can always put up your ample abode and give landlords a wide berth. However, many are stories about individuals, especially those from the diaspora, who have burnt their pockets, literally. One common thing about these scary stories is that the investors fail by omission. How do I know this? As a young investor, I started paying for land without due diligence, trusting an individual I met on a newspaper classified. I was lucky. If I were to start again, I will follow the hard beaten path:
- Do my research well. Location is important as well as the potential for growth. With planned metropolises across cities in Kenya, proximity to the central business is important but not critical.
- Verify documents, particularly the land title. This can easily be done online so give no excuse of queues in county land registries.
- Buy from known entities, especially legal entities such as cooperative societies. I love this because such organizations are not for profit and you are likely to get a better deal without dealing with brokers.
I spoke with the chairman of Mkono Poa Housing Cooperative society, Mr. David Mbogo. Below are excerpts of our conversation.
What is this crazy about Vacant Land?
Vacant land is land that is not yet developed. So you are not buying a house or any development. With Vacant Land, You Don’t Need to “do” anything to the property. You just give it time and value keeps going up at rates way above inflation rates. At Mkono Poa one is able to make money when buying, meaning you can buy a plot today at Mkono Poa and put it on the market the same day and make profits way above 30%. This is because as a membership-based Cooperative society, we do not add profit to the cost of land. But I digress. Gong after vacant land means you get that land at a possibly below market price.
I hear this kind of investment is called “Hands-Off” investment. What does this mean?
Let me answer this using an example. Imagine a Matatu owner who has to deal with conductors, drivers, spare parts, worn-out tires, and police corruption. With land investment, you have all the time to yourself for other activities. Except for annual land rates, which are way below the appreciation, land remains the best investment opportunity.
Interestingly, Vacant Land Owners Are highly motivated to sell while the land itself attracts buyers for the simple reason that the land is vacant.
Is there competition in the property investment sector?
There is no industry without competition. However, land investors have very little competition to deal with. Most real estate investors think of the most marketed and advertised properties like houses, apartments, and commercial properties. Often, this information overload confuses the ordinary investor. As result, property investors miss out on the most rewarding sector of the industry, the vacant land. It’s like consuming end products instead of being the producer of goods. Most investors don’t understand the superior benefits that come with land, and this can definitely play to your advantage.
But the cost of land, as they say, is always increasing. How do you marry the paradox of affordable land and appreciating property?
The cost of land has been exaggerated by brokers who are trying to make a kill, literally. If one can avoid brokers, who increase the cost of land by up to 30%, then suddenly land becomes affordable. In fact, one does not need a bank loan to buy property. It requires minimum capital and normally the seller is willing to allow you pay in periodic installments devoid of punitive penalties. At Mkono Poa we have priced our property at almost cost price. Moreover, we let our members pay for the land in micro installments allowing everyone to own land. Among our members are mama mboga, mechanics, executives and normal people like you and me. All it takes is taking the first step.
For the benefit of our readers, can you give us a brief description of how one can join Mkono Poa and start investing?
Thank you for asking. As a registered housing co-operative society regulated by the commissioner of co-operatives in Kenya, we only sell the property to our members. But becoming a member is as easy as 1,2,3. One needs to pay registration fees of KES 2000 and buy a minimum of one share for KES 5,000. We accept payment through our Paybill or direct bank deposit. Upon payment, we shall request a copy of KRA, National ID, phone number, and email account to enable us to create your account. Of course one can register online on the member’s section of our website (http://www.mkonopoa.co.ke ). Our system is online and you can be able to manage your property including payments online.
- Contact us on +254 740 602 442 for more information. It is said that it is never too late to learn. My take home today is that:
1. Land is affordable, especially vacant land.
2. The best investment is in vacant land.