Mr Sunday Ndamugoba
Well, I know the heading is catchy and you could
be drawn to read this hoping the content will clasp, bless and
complement the heading...phew…I hope you will not be disappointed.
Now…now…where do I begin! Well, at 30, I still have a few good years
left to be “outstanding” – but “old” is creeping up, but it’s not just
me either because here is a dark secret you didn’t know: you are getting
old too. So, I sat down and said why not share with lads how to get
into real estate investing, despite some of the disadvantages we have?
Well, before going further let’s look at the disadvantages of real
estate:
No money – let’s not fool ourselves most young
people have no what is termed as “money”. You could be working and have a
pocket change, but you do live salary to salary.
Minimal
life experience – I know, when I was 23 I thought I knew a lot. I
didn’t. In fact, I didn’t know anything. Now today, at 30, I think I
know everything. Haha, I don’t.
PS4 and XBOX 1 are so
alluring – Let’s face it – sometimes all we want to do is play some
video games, hang out on facebook, do a bit of twitter, click on Wema
Sepetu’s new post on instagram, go to Mlimani City and wonder around and
visit perhaps Samaki Samaki.
Chasing girls (or guys) –
From the moment puberty hits, boys and girls of this generation try
hard to find someone they can spend time together. After that, come
children that require every waking minute. That doesn’t leave a lot of
time for investing. See? No financial knowledge – When we were doing
“kidumu na mfagio” schools plus blessing “maua ya saa nne” with water,
at class we did not get any financial lessons. I mean we were not taught
how to manage our money or the importance of saving the little we have.
The same is the case to date.
The youth of today have a
lot of opportunities and the world or rather the environment they are
in provides for professional and financial growth. Why is starting young
so important?
Well, the answer is not rocket science
at all. By a sheer luxury of time that the youth has on hand in terms of
the period of investment, the risk appetite is multiplied several
times, which in turn leads to investments that by design are high risk,
high returns.
In all honesty, starting young means you
have the scope for distributing your investments over a long period of
time, ultimately leading to a substantial increase in the net amount
invested. Moreover, starting young means your money has that more time
to grow and hence, higher returns.
While this common
wisdom has had many young investors coming into the market, investing
largely in equities and debt instruments, real estate continues to be an
area that most are hesitant to venture into. The demand of houses and
the booming of real estate in Tanzania make it ideal for young investors
to venture in.
Inflation resistant investment
Any
reasonably experienced economist will tell you that those real estate
investments are an almost guaranteed way to get around inflation. You
see real estate is a growing market, more so because of the rapidly
shrinking supply of land. You only have to go house hunting in a city
like Dar es Salaam or Arusha or Dodoma to know the extent of land
shortage in the country. A shortage supply logically means growth in the
market and so long as this shortage persists, the market will not slow
down.
The core point here is a careful market research
before investing in real estate. You can hardly expect your money to
grow exponentially if you choose to invest your money in a landed
property in rural areas. The point is that investment in real estate can
be an excellent strategy for young investors to get past inflation. The
essential corollary is proper market research and careful consideration
before investment.
Affordable option
Oh,
yes, you read it right. Contrary to popular perception, investing in
real estate is actually one of the more affordable options with banks
funding up to 80 per cent of the cost.
Young investors
are expected to pay fixed instalments over the years, which in effect
amount to purchasing an asset at a lower cost, whose value is bound to
appreciate, while the investor’s own income too keeps rising.
Tangible assets
This
is not exactly an objective benefit, but may hold significant
importance in several cases. Unlike in the 1990s when owning a house
marked a definite landmark in one’s life, young investors can now enjoy
the benefits of a tangible asset pretty early on in their lives.
If
property is a residential one meant for personal purposes, the obvious
benefits are manifold. The key is to be prudent with your money and
invest as soon as you possibly can. While investing in real estate,
always remember, it is the only safe investment and a thorough market
research is very important.
Safety
Apart
from your pension you could have the little extra to live comfortable
aged life. Investments in real estate, residential and commercial
properties are found to be lucrative and much safer since they are
insured in contrast to those in gold, stocks and mutual funds. The youth
are always a best option to avail home loans.
They are
still young with no financial liabilities or burdens. Such people will
always be serious towards loan repayment and this is what all the banks
and other financial institutes obviously look forward to. Sir John
Templeton once stated, “Bull markets are born on pessimism, grown on
skepticism, mature on optimism and die on euphoria. The time of maximum
pessimism is the best time to buy, and the time of maximum optimism is
the best time to sell.”
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