Generally, people can agree on few things, be it politics, religion, or even climate change. However, when it comes to investing, we are all on the same page: it is a good idea.
If you have the ability to invest, do it!
It is the most effective way to make your wealth work for you. Depending on what your investment goals are, you can explore different options. If you are interested in sustainable and high returns, look no further than real estate investments.
Real estate is anything that involves property: land and buildings, for example. How exactly is this a good investment?
It is a little known fact that real estate is protected against both long and short-term inflation. As the cost of living increases, so does the rental yield and the value of the land or the building.
This means if you already own a property, you are protected from the adverse effects of inflation. In fact, you may end up benefiting from it since you are earning more. If you want to maximise your investment, buy when prices are low and be patient. They will go up.
There is a finite amount of land, and unless you decide to reclaim plots from the ocean like the United Arab Emirates (UAE) Prime Minister, Mohammed bin Rashid Al Maktoum did, eventually, each piece of property will be claimed by some entity or other. This makes it infinitely valuable.
As such, property will never stop having value, unlike traditional investment options such as stocks and bonds. In case of an economic crash, you will still have a tangible source of wealth to fall back on.
Contrary to popular belief, there is no end to the number of ways you can invest in real estate.
The most popular in Kenya right now is to develop a residential complex and sell it to end users. However, you could also rent or lease it out and enjoy a regular income. This also applies to office and storage space.
People make millions of shillings annually just from setting up and letting out godowns.
There are also those who have grown wealthy from property flipping. If this is not your cup of tea, there is also the hospitality industry, which always seems to do well. Hotels and serviced apartments can be a lucrative source of income, especially during the high season.
Have you considered buying land for agriculture? Or how about buying land, servicing and then reselling? What about joint ventures? Or, just buying it and letting it appreciate? Whatever you choose will depend on a few things, like how much capital you have, time and your investment goals.
Real estate consistently offers high returns even durng market slumps. In fact, it consistently outperforms traditional investments like stocks and bonds, because it is anchored in a tangible asset. When you consider other aspects such as capital appreciation, rental yield and inflation hedging, then you really have no excuse to eschew this type of investment.
A PASSIVE SOURCE OF INCOME
As with most investments, real estate is also a passive source of income because your money grows without needing too much labour, capital or time. Obviously, this may not be true during the initial phases, for example during construction, but once it has been set up, it will not require much from you aside from maintenance and the occasional upgrade.
Investing in real estate does not have to be purely selfish, it could also be altruistic. This can be twofold. On the one hand, when you buy a property and start to develop it, you are creating income for others — contractors, builders and the like. On the other, as you develop property in a certain region, you are making it more attractive to other investors.
Moreover, it also prompts the government and private players to improve infrastructure and other social services in the area.
The construction of the Western Bypass to service Ruaka in Nairobi is a great example. In this way, the entire community grows.
But you cannot skip pertinent steps. For one, due dilligence and research is a must. As with anything else, you must dive in armed with information so that you are more likely to succeed. Not only will this help you pick the right investment partner, you will also choose the option that will get you closest to achieving your investment goals.
Lastly, diversify your portfolio to cut risk. Think about what else you could invest in, on top of real estate. Having done so, sit back and watch your money work for you.
The writer is Head of sales and Marketing, Centum Real Estate.
World Bank pushes G-20 to extend debt relief to 2021
World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.
“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.
He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.
The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.
People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.
For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.
Debt burdens, already unsustainable for many countries, are rising to crisis levels.
“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.
Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans
The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.
“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”
According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.
Tighter Reins on Platforms for Mobile Loans
The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.
Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.
Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.
Scope Markets Kenya customers to have instant access to global financial markets
NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options.
This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.
The Scope Markets app offers clients over 500 investment opportunities across global financial markets.
The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.
The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).
The platform also offers an enhanced client interface including catering for those who trade at night.
The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour; Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).
The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.
Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”
He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.