By CHEGE MUIGAI, email@example.com (email the author)
Posted Monday, October 3 2011 at 18:11
For most people, buying a new home is the most significant investment they make during their productive life.
With an average price of Sh3 million at present in Nairobi for a two-bedroomed house, this easily dwarfs the cost of crucial life events like weddings and education as well as other domestic and personal necessities like buying a car. For such an important investment, careful planning is important.
Business Daily has done the prowling to give you useful wisdom to have in mind when buying your home.
Do your homework
The process of acquiring a house begins long before you move into your new home. According to Sue Muraya, the managing director of Suraya Property Group that develops gated-communities, prospective home buyers should keep themselves acquainted with real estate trends and prices long before they start looking for a home to move into.
“There are general price and settlement trends that are very important to track,” says Ms Muraya.
“If a certain new area is being subdivided into an acre and half acre plots, that is your cue to realise that the target population is the high net worth class who demand relatively large spaces.”
Such research should then be topped up with a visit to the financier for the prospective homebuyer to establish how much they can access for the purpose of buying a home, she says.
“It is most important that you establish this early enough to ensure no time is wasted shopping for a home in areas that are out of your financial ability range,” says Ms Muraya.
Daniel Ojijo, chairman of the Mentor Group, which owns real estate brands like Villacare and Homes Kenya, agrees with Ms Muraya and adds that a good mortgage package should not cost in excess of 30 per cent of the combined family income in total repayment costs.
Mr Ojijo also brings out a key point that has forever been emphasised by financial advisors, but which is always worth repeating; “A single bedroom house in Kileleshwa goes for about Sh7 million while half that amount would buy you a three bedroom house in Mlolongo or Thika. That is because the first three key considerations in real estate should be location, location and location,” says Mr Ojijo, adding that location is the decider of the neighbourhood quality and resale value in the property market.
Who your neighbours are, the access to public services like roads, power supply and water is decided by the location, says Mr Ojijo. A home in Muthaiga or Lavington will have an uninterrupted power and water supply, have excellent security services and be resided by the kind of neighbours who everybody dreams of having while the opposite may be the case in off-the-range estates.
“Location is the sole decider of value in real-estate and getting it right is not only important, it is necessary.
A prospective home buyer should take their time to uncover the profile of different says. Ms Muraya advises that it would make better value sense to sacrifice a bedroom and live in a better location as that would then mean more long-term value.
The experts also encourages the investment approach when buying a home. A good purchase should offer the potential of capital gain in the medium to long-term.
“Such potential is mostly possible in new or developing suburbs,” says Mr Ojijo who cautions that mature areas like Muthaiga, Westlands and Hurlingham will most likely have a negative movement in value in the future.
The focus for people who plan to buy a home should therefore be on an area like Kiambu Road and along the new bypass routes in Embakasi, Ruaka and Ruiru.
But while that is so important, the home environment should be convenient and serene. A new home owner should not let the hunting of bargains lead them to risky, isolated and inhospitable environments for their families.
“You should be very careful not to lead your young family to places where you must always look over your shoulder and where every nightfall promises danger,” says Ms Muraya. The presence of quality access routes, hospitals, schools and shopping centres are also critical considerations, according to home experts.
“Bargains are important only when they do not compromise on convenience and safety,” says Mr Ojijo who also worries about the rising instances of people getting into home purchase processes without the involvement of experts.
“Your wife’s opinion is very important as is your friend’s. But at the very least, you will need a lawyer to check out on the very small, but nonetheless crucial details. On your own, you will be prone to overlooking many important aspects that will cost you much more than the services of a lawyer would cost.”
People are also being encouraged to look beyond the obvious. The finishing, the paint job, the quality and durability of structural materials like roofing, plumbing and storages should be assessed by field-relevant specialists.
“Many people are buying houses on shiny illusions and only come to realise their oversight when it is too late to remedy anything,” says Mr Ojijo.
Old home or new one
A house may have a colonial appearance, have a crumbling appearance yet be of higher quality in value terms.
“Buying a house for half the going market rate and spending only a small amount to make it to the envy of the neighbourhood is the epic of real estate genius,” says Ms Muraya, adding that those kinds of houses are everywhere, but are mostly ignored in a world where the flashy appearance holds a lot of undeserved currency.
“In Europe especially, houses 100 years old or more are more appreciated and their price on the homes market has a significantly higher mark-up than modern homes.
The opposite is the case here where history is largely sniffed upon and modernity unduly exalted. Real estate dealers really struggle to move old buildings and most of those who buy them end up demolishing them to make space for modern buildings,” she says.
Ms Muraya finally touches on the understated benefits of living in gated communities.
Many people snub the communal living made famous in the 80s and 90s in the United States.
While concerns of privacy have received all the press, Ms Muraya insists that such an arrangement provides a wonderful environment for growing children who have a safe company to mingle with.
She also says that the expansive nature of such projects helps in bringing costs per unit down significantly while such homes serve to bring together like-minded people to experience different cultures and to share costs of otherwise expensive amenities like swimming pools, shops and gymnasium.