- Advertisement -
   

Chamas can profitably use land as an investment vehicle

- Advertisement -

[dropcap]F[/dropcap]or most people, land forms the basis of livelihood – from cultivating food to constructing houses. Land gives them the natural resources that they may extract, refine then sell.

Former president of the United States of America, Franklin D. Roosevelt once said that, “a nation that destroys its land, destroys itself. Forests are the lungs of our land, purifying the air and giving strength to our people.”

In these modern days, land has been commercialized to form a key aspect of economic development. Both public and private sectors have shown great interest in land banking and infrastructural development.

Recently, the government of Kenya with the support of the Peoples Republic of China launched the Standard Gauge Railway.  This project has given an opportunity to land owners closer to the railway line to benefit from huge appreciation of their properties.

RELATED: Two simple ways to own your own home

Organized social investment groups famously known as Chamas have an opportunity to benefit from land ownership.

Since land is the basis of any development, it comes with high demand, low supply and high appreciation rate. Some of benefits of land investment for Chama members include:

A chama may position itself to benefit from the profits of land banking hence growing its capital base to transform the lives of the membersHuge Return on Investments (ROI): According to Global Property Guide Kenya, values of residential property are on a sharp rise. This translates to rise in the cost of housing, hence a Chama can get huge returns on rental property.

Accessibility to key amenities: Some property providers ensure their clients have access to high quality internal roads, electricity, perimeter walls as well as space for community centers, playing fields, learning institutions amongst others. Enkavilla Properties, for example, has invested in quality value additions for all its strategically located properties.

An opportunity to speculate (land banking): A chama may have the option of purchasing land, holding it to accrue value then later selling it. Due to ever appreciating nature of land, a Chama may position itself to benefit from the profits of land banking hence growing its capital base to transform the lives of the Chama members.

 After sale benefits: A Chama will ensure that its members benefit from after sales services. A good real estate company takes up services such as title transfer, project and property management and project management. For instance, one has the option of purchasing fully serviced plots to buy and build. It should also have ready house plans and offer project management services thus taking the entire project off your hands.

Title deeds as a collateral/ a bond in court of law: A group tittle deed may be used to access bank loans as  collateral hence increasing the financial bargaining power of groups. A good real estate firm should have strong partnership with financial partners (Enkavilla works with KCB Bank, Rafiki Micro-Finance and Astro Sacco) who can give you more information on how that piece of land you own can be used as a guarantee for bank loans.

NEXT READ: Chris Kirubu’s success formula you won’t find in college


Meshack Muhoho is the CEO of Enkavilla Properties. Email: [email protected]

[crp]

- Advertisement -
- Advertisement -
- Advertisement -
Must Read
- Advertisement -
Related News
- Advertisement -

1 COMMENT

0 0 votes
Article Rating
Subscribe
Notify of
guest
1 Comment
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Arthur Rwenji Gaitho

I have two lands one is in Muguga 1/4 acre and another one in Nairobi,Kangemi 1/8 along Waiyaki Way very prime area.The land in Muguga i am now processing my title deed but the one in Kangemi we are yet to acquire a title deed since we have sub-divided it into two each shares,each one of us has a 1/8 this plot of Kangemi with my brother equal shares.my question is can Enkavilla develop or build rental houses, one bedroom or bedsitters units at this plot in Kangemi as a joint venture,once complete they manage my plot at 70% and i get 30% of the total income until they repay back their cash or give me a loan and i deposit my Muguga title deed as my security.please let me know.thanks.

.
....