There are plenty of benefits when a group is associated with real estate investments. Assuming your Chama has 20 members with savings policy of Ksh. 2,500 per month for year, the amount will total up to about Ksh. 600,000. This amount is enough for these organized groups to actually buy a property. A real estate service provider such as Enkavilla Properties Limited has flexible payment rates that any Chama can take advantage of. With its 10% deposit on all its properties, this kind of a Chama can deposit Ksh, 65,000 for the purchase of Enka Gardens Konza plot and be paying Ksh. 27,538 per month for the next 24 months and be a proud plot owner! Just like that!
Well, at times, it is always quite a challenge to identify a property to invest in from the perspective of a Chama. However, with the support of technology, a property provider is always a click away! A Chama can get to learn the background of their service provider hence build trust before investing their money. There are three major ways that a given Chama can benefit from Land Banking:
- Speculation Chamas could buy property cheaply in large quantities and withhold it from market, if they had sufficient capital to carry it, until rising prices brought profits. These profits can thereafter be used to reinvest in other property markets hence enhancing the Chama’s net worth.
- Buy and Rent Another way to increase the Chamas capital base is by purchasing a property then renting out to consumers who pay monthly rents. These monthly payments can be shared as dividends to Chama members or be used to promote Chama based growth initiatives.
- Buy build then Operate For commercial properties such as malls and office suites, Chama’s can buy, build then operate hence gain value in returns. Malls can be occupied by banks and supermarkets hence very attractive to serious investors. Beyond the benefits, value additions, location and current economic state determine appreciation rates. Title deeds have been a key collateral in accessing loans and mortgage facilities. Next time you choose to invest, choose real estate.