Hi good business people. This is my first time of posting in the Investment Thread and I will truly appreciate any help. This is my question:

what kind of plan can an individual have to enable him owe his own house in 10 years time, without using mortgages or loans. It has to be a kind of saving plan from his monthly income. Do banks have such plans that gives higher interest? Does anyone have an idea?

217 views no commet, na wha for una, if na sumtin wen go scam una, guys go rush in. c betta question hanging in the air like dat. Shmmmmm

georgikpons: 217 views no commet, na wha for una, if na sumtin wen go scam una, guys go rush in. c betta question hanging in the air like dat. Shmmmmm

Well, I was asking the question for an article I was working on, and I eventually did it and even liked the outcome because I am going to follow the plan. Since you seem interested, I will post it here for you.


As published in Hallmark Newspapers- www.hallmarknews.com


Own a home with a 10 year plan
UZEZI ADESITE

Most middle income earners are not open to embracing mortgages and housing loans as options to help in the realisation of their home ownership dreams.

Using a 10 year plan for an individual who earns N100, 000 monthly income, is it possible for the middle income earner to become a landlord of a three bedroom bungalow, without using housing loans to fast track the process? Although some stakeholders argue that it is more theoretical than practical, there are those who believe it is very possible.

Step by step
“Depending on your income level and the type of house you wish to build, you may decide to secure land first,” one stakeholder and business analyst, who pleaded anonymity, said. “Remember a home isn't built in a day, the moment you are able to secure land other things will be gradual, if your income level is such that can enable you start immediately after purchase of land, the next thing is to arrange for the plan for the type of house you need based on the available space of the land so that an engineer will be able to give you an idea of what it will cost to build it, then you can plan for savings for a year to start with the foundation. The moment you lay the foundation, all your attention should be on the house with little or no distraction to enable you achieve your dream.”

For a N100, 000 monthly income earner, stakeholders believe that he can purchase a good land in less than two years if he has the option of paying over a period of time and be able to do a foundation in another three years, if he saves at least N60, 000 monthly. For instance, Fresh Forest Nigeria offer a plot of land to subscribers in Agbara, who pay N35, 000 monthly for 20 months, which comes to N700, 000 a plot.

Niyi Osilagun, CEO of Abidoy Ventures and a civil engineer and building contractor, told Hallmark what the intended homeowner will need for foundation on a very good land is a strip foundation which today cost in minimum between N900, 000 and N1.3m for a simple designed bungalow. “This estimation is up to the level of German Floor,” he said. “It is the filling with concrete that takes most the fund.”

Going by Osilagun’s estimation of N1.3m and working on an annual inflation rate of 10%, after paying N35, 000 for land over 20 months (from Oct 2013- May 2015), the strip foundation will cost the intended homeowner N2.093, 663m if he lays it in October 2018, five years from when initial payment for land commenced. This is on the assumption that he still saves N60, 000 monthly, which will leave half a million in his accounts, after 20 months of paying for the land. Saving the N60, 000 for an additional 40 months from June 2015 to October 2018 will give him N2, 400, 000 in addition to his half a million naira. Paying an estimated N2.093, 663m for laying the foundation leaves him with a little over eight hundred thousand naira still. Five years gone, five more to plan for.

The saving plan
Eniola Philips, an independent financial analyst said the 10 year plan is realisable on certain conditions. “It is more possible if he has a separate business he had put up ahead of, or before this 10-year saving plan. It must be a business capable of re-capitalizing itself. And it is equally very possible if he has a working wife ready to support him with additional income. Also, the savings method that yields interest is the one to subscribe to.

“Fixed deposits in Nigeria do not yield much interest even if you put in 1million initial deposit. No fixed deposit for amounts below N1million, but some banks or branches of some banks will concede to N500,000 fixed deposit. You may then add up more into that if you care. The amount you add will be added to the former principal + interest on that former principal.”

Outside of embracing the fixed deposit as a way of saving towards this plan, Treasuring Bills are another alternative. Eniola Philips said: “the minimum period for buying Treasuring Bills is 91 days and minimum amount needed is N100, 000 that attracts 11.4% interest or at worst case scenario, 9% in 91 days.”

Other financial advisers say the beauty of going with treasuring bills to help save towards achieving this project is that apart from the good interest rate and ability to re-invest after the maturation of the initial investment, it is a means of strict saving discipline without an option of being tempted to withdraw the fund.

Another five years of saving N60, 000 brings in N3.6m to be added to what was left to build the simple bungalow.

Assumptions
The project can be influence either positively or negatively by events like loss of job, salary increment, interest acquired over a long period of time from investment in treasuring bills or buying bonds.

Also, where the plan fails, Kolade Akintayo of the Real Estate Exchangers and Agents Group , a stakeholder, believes a kind of financial help is what an individual will need, especially if the intending homeowner subscribes to payment plans from a property development firm. “How else can you own a home if you don’t hold an equity/debt instrument against the house?” he asked. “Buying a house is one of the most expensive transactions that people face. But then, it can be worked out if you are able to calculate how much time is needed to make contribution towards the effort. An individual aiming for personal ownership can afford 10-30yrs contribution with affordable payment plan.”

Akintayo adds that developers who can render a payment plan service, do so in partnership with institutions with the legal jurisdiction to do so like mortgage banks.

“You will find that this task is far beyond the services that a traditional developing company you see around can assume,” he said. “So consumers are to enter into a purchase contract only with developers and sign corresponding and associated mortgage agreements with such legal entities established to offer mortgage services separately.”

Stakeholders advise all investors, especially if buying land through developers and spreading payment to do their due diligence before commitment.

i like this

Emzybrown: i like this

thanks. I was really please to be able to do it, because it is a plan I can do for myself

Hmmm.... Very interesting! I might actually try it out (by the grace of God)

its just about the mindset of an individual n how he plans to achieve his goals,buh a question is that isn't Ten yrs too long? What happened to a 3 to 5yr plan? that should be a better target.

zayzee:

Well, I was asking the question for an article I was working on, and I eventually did it and even liked the outcome because I am going to follow the plan. Since you seem interested, I will post it here for you.


As published in Hallmark Newspapers- www.hallmarknews.com


Own a home with a 10 year plan
UZEZI ADESITE

Most middle income earners are not open to embracing mortgages and housing loans as options to help in the realisation of their home ownership dreams.

Using a 10 year plan for an individual who earns N100, 000 monthly income, is it possible for the middle income earner to become a landlord of a three bedroom bungalow, without using housing loans to fast track the process? Although some stakeholders argue that it is more theoretical than practical, there are those who believe it is very possible.

Step by step
“Depending on your income level and the type of house you wish to build, you may decide to secure land first,” one stakeholder and business analyst, who pleaded anonymity, said. “Remember a home isn't built in a day, the moment you are able to secure land other things will be gradual, if your income level is such that can enable you start immediately after purchase of land, the next thing is to arrange for the plan for the type of house you need based on the available space of the land so that an engineer will be able to give you an idea of what it will cost to build it, then you can plan for savings for a year to start with the foundation. The moment you lay the foundation, all your attention should be on the house with little or no distraction to enable you achieve your dream.”

For a N100, 000 monthly income earner, stakeholders believe that he can purchase a good land in less than two years if he has the option of paying over a period of time and be able to do a foundation in another three years, if he saves at least N60, 000 monthly. For instance, Fresh Forest Nigeria offer a plot of land to subscribers in Agbara, who pay N35, 000 monthly for 20 months, which comes to N700, 000 a plot.

Niyi Osilagun, CEO of Abidoy Ventures and a civil engineer and building contractor, told Hallmark what the intended homeowner will need for foundation on a very good land is a strip foundation which today cost in minimum between N900, 000 and N1.3m for a simple designed bungalow. “This estimation is up to the level of German Floor,” he said. “It is the filling with concrete that takes most the fund.”

Going by Osilagun’s estimation of N1.3m and working on an annual inflation rate of 10%, after paying N35, 000 for land over 20 months (from Oct 2013- May 2015), the strip foundation will cost the intended homeowner N2.093, 663m if he lays it in October 2018, five years from when initial payment for land commenced. This is on the assumption that he still saves N60, 000 monthly, which will leave half a million in his accounts, after 20 months of paying for the land. Saving the N60, 000 for an additional 40 months from June 2015 to October 2018 will give him N2, 400, 000 in addition to his half a million naira. Paying an estimated N2.093, 663m for laying the foundation leaves him with a little over eight hundred thousand naira still. Five years gone, five more to plan for.

The saving plan
Eniola Philips, an independent financial analyst said the 10 year plan is realisable on certain conditions. “It is more possible if he has a separate business he had put up ahead of, or before this 10-year saving plan. It must be a business capable of re-capitalizing itself. And it is equally very possible if he has a working wife ready to support him with additional income. Also, the savings method that yields interest is the one to subscribe to.

“Fixed deposits in Nigeria do not yield much interest even if you put in 1million initial deposit. No fixed deposit for amounts below N1million, but some banks or branches of some banks will concede to N500,000 fixed deposit. You may then add up more into that if you care. The amount you add will be added to the former principal + interest on that former principal.”

Outside of embracing the fixed deposit as a way of saving towards this plan, Treasuring Bills are another alternative. Eniola Philips said: “the minimum period for buying Treasuring Bills is 91 days and minimum amount needed is N100, 000 that attracts 11.4% interest or at worst case scenario, 9% in 91 days.”

Other financial advisers say the beauty of going with treasuring bills to help save towards achieving this project is that apart from the good interest rate and ability to re-invest after the maturation of the initial investment, it is a means of strict saving discipline without an option of being tempted to withdraw the fund.

Another five years of saving N60, 000 brings in N3.6m to be added to what was left to build the simple bungalow.

Assumptions
The project can be influence either positively or negatively by events like loss of job, salary increment, interest acquired over a long period of time from investment in treasuring bills or buying bonds.

Also, where the plan fails, Kolade Akintayo of the Real Estate Exchangers and Agents Group , a stakeholder, believes a kind of financial help is what an individual will need, especially if the intending homeowner subscribes to payment plans from a property development firm. “How else can you own a home if you don’t hold an equity/debt instrument against the house?” he asked. “Buying a house is one of the most expensive transactions that people face. But then, it can be worked out if you are able to calculate how much time is needed to make contribution towards the effort. An individual aiming for personal ownership can afford 10-30yrs contribution with affordable payment plan.”

Akintayo adds that developers who can render a payment plan service, do so in partnership with institutions with the legal jurisdiction to do so like mortgage banks.

“You will find that this task is far beyond the services that a traditional developing company you see around can assume,” he said. “So consumers are to enter into a purchase contract only with developers and sign corresponding and associated mortgage agreements with such legal entities established to offer mortgage services separately.”

Stakeholders advise all investors, especially if buying land through developers and spreading payment to do their due diligence before commitment.

You asked the question, and you provided the answers. Obviously you are here to market your company and her products.

It is very possible to build a house within or less than 10 years.

I always advice people to make sure they invest whatever they as house rent, in real estate investment.
If you must pay 600k per annum for rent, you must be able to invest another 600k in real estate. If this is not possible, I will advice the person to get a cheaper accommodation of may be 300k, so that he can have another 300k to invest in real estate on an annual basis.

But how will someone earning 100k per month be able to save 60k per month. Won't he pay house rent, transportation, feeding and other miscellanous, wht of if he has a wife and children.

manie:



You asked the question, and you provided the answers. Obviously you are here to market your company and her products.

I asked the question because I needed expert opinions on the issue. I am a journalist. I do not have the answers. I had to talk to other experts and it is the result of what I found out that I used in writing the story.

Of course it is possible to own a house in lesser time. But every pocket is not the same. The main thing is to have a goal that is achievable. A ten year plan like this would make much more sense to a 25 year old and by 35, he or she is a home owner.

emergency2: But how will someone earning 100k per month be able to save 60k per month. Won't he pay house rent, transportation, feeding and other miscellanous, wht of if he has a wife and children.

This is just a plan to show that it is possible. But then, I took into consideration that there are people who earn less than 50k a month, who have wives and children and are paying house rent. With discipline and lots of sacrifices, anything is possible.

These are theoritical plans. If you need practical plans and answers contact me.