Property Developer Kisumu-Factors to think about when Building an Apartment
When you wish to consider investing an apartment building, there are fundamental factors which you need to take into account before you invest a single coin. The end result and return thereof which largely relate to how well you addressed those factors. Being a property developer in Kisumu, it’s our business that will help investors make right decisions before investing any amount in a real estate property.
Here are the factors to consider when setting up a real estate property much like an apartment.
1. Cash Flow
Will the property bring net positive cash flow? Simply put; will I make profit from this investment? This is very important to ask giving you assess the market critically.
What will help you make good judgement here depends on these factors;
The demand in the local marketplace for unitsIf there's a huge demand that are available, you will not end up with long vacancy period. This will confirm you start getting returns immediately the property is finished and even when a tenant gets out, the time you need to bring in another tenant will be a short one.
The type of market you want to invest inThe type of market will dictate the huge amount you can charge as rent. If you operate outside the expected range, you will definitely miss out on tenants. Therefore the market will impact directly on that which you can receive as rental income. There will be estate were a two bedroom unit in an apartment attract monthly rental income of between Ksh.20, 000 and Ksh30, 000. The very same two bedroom unit if transported to another estate will attract a maximum of Ksh15, 000.
The cost of financingIf the price of capital or finance is high, the return will be decreased. If you secure financing at an interest rate of less than 10%, in which case you stand a chance of creating good return from the investment than if you secure funding at an level of interest of 13% or more.
The amount of your down paymentThe amount of deposit you commit will reduce the funding required hence the pricetag of financing. If you position a deposit of 40% of the cost of the project, then you will only look for financing of 60%. If another person places an advance payment of 20%, the remaining 80% will surely be financed by debt capital hence more interest expense.
Once you have evaluated all these points, after that need to ask whether you will obtain money by investing in the property you have on your mind? If you don’t have a good clear answer, look into a property developer who offers consultancy or financial analyst.
2. Appreciation
You need to try to ask yourself whether the place you desire to invest as the good potential of appreciation of property value and rental over a period of time. You need to invest in a place where rental income inclined go up and not down over quite a while.
If you buy in an estate where rental income or property value rarely appreciates, then you are putting your money into a high risk area. If the value does not appreciate, there is a high chance that this value will come down over the same period of time analysis.
5. Risk
Risk is something to plan for. It’s said that you expect the very best but you prepare for the poorest. You need to ask yourself do you know what happens if all your assumptions were wrong. If you expected the units to get fully occupied or at least 70% occupied and today you only attain 35% occupancy? You expected the value of the property to go up that gives you secure funding but today the value has dipped?
When you plan very well for the treat, you might be adequately conscious any outcome. Before investing in any property development project, assess the risks involved and then determine if you will still make money if the risk occur.
For more information on real estate developer kisumu service, contact us, WEST KENYA REAL ESTATE.
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Here are the factors to consider when setting up a real estate property much like an apartment.
1. Cash Flow
Will the property bring net positive cash flow? Simply put; will I make profit from this investment? This is very important to ask giving you assess the market critically.
What will help you make good judgement here depends on these factors;
The demand in the local marketplace for unitsIf there's a huge demand that are available, you will not end up with long vacancy period. This will confirm you start getting returns immediately the property is finished and even when a tenant gets out, the time you need to bring in another tenant will be a short one.
The type of market you want to invest inThe type of market will dictate the huge amount you can charge as rent. If you operate outside the expected range, you will definitely miss out on tenants. Therefore the market will impact directly on that which you can receive as rental income. There will be estate were a two bedroom unit in an apartment attract monthly rental income of between Ksh.20, 000 and Ksh30, 000. The very same two bedroom unit if transported to another estate will attract a maximum of Ksh15, 000.
The cost of financingIf the price of capital or finance is high, the return will be decreased. If you secure financing at an interest rate of less than 10%, in which case you stand a chance of creating good return from the investment than if you secure funding at an level of interest of 13% or more.
The amount of your down paymentThe amount of deposit you commit will reduce the funding required hence the pricetag of financing. If you position a deposit of 40% of the cost of the project, then you will only look for financing of 60%. If another person places an advance payment of 20%, the remaining 80% will surely be financed by debt capital hence more interest expense.
Once you have evaluated all these points, after that need to ask whether you will obtain money by investing in the property you have on your mind? If you don’t have a good clear answer, look into a property developer who offers consultancy or financial analyst.
2. Appreciation
You need to try to ask yourself whether the place you desire to invest as the good potential of appreciation of property value and rental over a period of time. You need to invest in a place where rental income inclined go up and not down over quite a while.
If you buy in an estate where rental income or property value rarely appreciates, then you are putting your money into a high risk area. If the value does not appreciate, there is a high chance that this value will come down over the same period of time analysis.
5. Risk
Risk is something to plan for. It’s said that you expect the very best but you prepare for the poorest. You need to ask yourself do you know what happens if all your assumptions were wrong. If you expected the units to get fully occupied or at least 70% occupied and today you only attain 35% occupancy? You expected the value of the property to go up that gives you secure funding but today the value has dipped?
When you plan very well for the treat, you might be adequately conscious any outcome. Before investing in any property development project, assess the risks involved and then determine if you will still make money if the risk occur.
For more information on real estate developer kisumu service, contact us, WEST KENYA REAL ESTATE.
property developer kisumu, property developer in kisumu, kisumu property developer, real estate developer kisumu,real estate developer in kisumu, kisumu real estate developer
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