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Re: Home Ownership Is Mostly A Bad Investment- Expert Says by Ugosample(m): 9:46am On Nov 15, 2019 |
seniormallam: exactly |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by Gerrard59(m): 9:50am On Nov 15, 2019 |
Mr Tayo's post suites business people who need to reinvest their profits into the business moving forward than salaried people. As someone whose parents bought quite a number of properties (of which some are emotional properties), I understand Tayo's point. Moreover, real estate unlike some persons say depreciates in the face of poor infrastructure, rising crime, rising sea levels and general poverty. Also, real estate is very illiquid - one cannot just wake up tomorrow to sell his/her properties at the same price they were purchased. It takes time to appreciate and even more time to find buyers. Worse still, inflation/devaluation eats up whatever gains it might have accured. Tayo never said "don't build a house". He simply said don't build a house when you can reinvest the money into more profitable ventures. It's also true that the house one owns and resides in is not an investment, never! It doesn't generate revenue rather it requires maintenance which requires money. It's more profitable to buy and lease out than buy to reside. Funny enough, people stress their lives by building houses in places like Ota, Agbara, Okokomiako yet work in VI, Lekki and Ikoyi. This is suicidal! Better to rent in Ajah, Yaba and invest in a business then later utilise the profits at a stage to purchase a property in those areas. When one even factors in the life expectancy rate in Nigeria, renting is better than outright purchase. The reason most do the latter like Tayo stated is because of their children and societal expectations. Unfortunately, some of these properties are sited in "emotional locations". Lastly, knowledge of basic economics, mathematics and accounting is essential for every individual in his/her quotidian activities. 6 Likes 1 Share |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by ajl: 10:00am On Nov 15, 2019 |
charliboy654: Did you even take a minute to digest his points? Or it's too complex to digest? |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by omomummy13: 10:01am On Nov 15, 2019 |
Promismike: You still do not understand him. That value is ONLY on paper as long as you live in the house. Whatever does not add to your income is a liability. After paying cash, you'll still be spending money to maintain until depreciation sets in. Who will want to buy a 10 year old house when newer designs with better features are everywhere for close to the same price? What i'm i even saying, everybody go dey alright las las. We won't take even 1 kobo with us to the ground. Do whatever massages your ego. |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by whitedove(m): 10:02am On Nov 15, 2019 |
I SEE sense in what the guy is saying.....an average Nigerian caves in into societal expectation of owning their homes,you don't have a thriving business and you own your house that wont generate any income for you,where is the sense in that? No wonder we have shanties here and there all in the name of being called a landlord...if you build to sell or rent out it is an investment. QED. |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by TEMINIKANSOSO(m): 10:08am On Nov 15, 2019 |
Marcsunny: Kindly create a thread or upload some of the materiala. |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by paix(m): 10:11am On Nov 15, 2019 |
charliboy654:He says, instead of you occupying the house; that it's better if you would rent it out to fetch you money. You're only tying down your investment if you occupy the house and it changes to become a liability. When you rent out the house, it is expected that you go for a cheaper house to rent for yourself. Technically, it pays your rent and you still have some cash in your pocket. |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by glingev(m): 10:12am On Nov 15, 2019 |
Treasury bills are good and the interest could be used in building a home. But come to think of it, the Federal Government has reduced the rate to 8% is it still viable? 2 Likes |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by osax4pal: 10:24am On Nov 15, 2019 |
Viking07:If need be you can sell the property and buy or build a much cheaper apartment, Buildings are asset that appreciate as times goes on. |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by tot(f): 10:31am On Nov 15, 2019 |
He should come back and say this when he is a pensioner, retired and still renting. Then he will understand the importance of having your own home. Yes, you have to apply sense in all financial decisions but making a blatant statement like this makes no sense. |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by seniormallam(m): 10:50am On Nov 15, 2019 |
tot:Uve just described a typical life of a civil servant here, pls what concerns a civil servant with a #40m talk? Bros this talk is not for people on your level, its for millionaires, go and buy ur land and start building it small small, but someone on ur level can still buy two land, after 10years sell one to build one, instead of squeezing urself to death in the name of landlord. 1 Like |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by ba7man(m): 10:56am On Nov 15, 2019 |
Deltatoto:They are far more sucessful than most Nairalanders so I'll go with their logic. They see houses as a means of generating wealth not storing wealth. |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by GeorgeTheCoder: 11:02am On Nov 15, 2019 |
perryy: There are many angles to this issue. First, expanding population, urbanisation and failure of government to invest in infrastructure means that available land and house prices are going up not down. Second, rent is not a constant figure. Capricious landlords can increase it at any time. Third, even businessmen require landed property as most bank lenders will not give you money without collateral. So your home in this case, can serve dual function. In short, the decision to own a home or not, depends on many factors. |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by tot(f): 11:03am On Nov 15, 2019 |
dake40: What does living in it for 10 years have to do with the argument? What difference does it make whether you live in it for 5 years or 12 years? |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by tot(f): 11:07am On Nov 15, 2019 |
seniormallam: So the person with #40m will not retire someday? Are civil servants the only ones entitled to pensions? Obviously not. |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by asahnwaKC: 11:16am On Nov 15, 2019 |
That's why it's good to include tenant house while building...cave out your own plus tenants ...so u will getting money for body and house maintenance |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by Mitch99: 11:28am On Nov 15, 2019 |
charliboy654: Exactly what he’s saying... apply |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by Nobody: 11:36am On Nov 15, 2019 |
helinues: The problem is Nigerians don’t think. People who have never been outside Nigeria talking about things they don’t know, many people have multiple houses in the uk that they rent out. A property you bought in Nigeria before 2015 is most likely worth half what you paid. If you bought a property for 40m Naira before 2015, that property is still probably worth 40m today. In 2015 naira was $160 today it is 360 meaning a property that was with $235k in 2015 is only worth $111k today. If you had used that money for business or invested your money abroad and rented instead would have increased your capital. Even if you merely kept it in a dollar account, your $235k (40m) from 2015 would be worth 84 million naira today. 3 Likes |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by khalids: 11:40am On Nov 15, 2019 |
Seems a lot of people did not understand what he was saying....Let me break it down Cost of getting a good decent house, is, let say 40M You are going to be leaving in that house let say for the next 20yrs You can put the say 40M in treasury bills that will yield you 4M every year.......you can then take 1.6M or even 2M to rent a very good house...While you will have 2M for other investments or just savings .....Over the same 20yr period you would have saved 40M, and your initial 40M will still be running and turning a profit for you. Its a case of opportunity cost.... He also mentioned that for you to own your own house, the reason should be strong, reasonable and valid in comparison to the opportunity cost you are foregoing... 1 Like 1 Share |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by partnerbizn5(m): 11:40am On Nov 15, 2019 |
Mires: His analysis is not quite correct. The t bills will give him 5m, true. But he failed to understand that the property appreciates as well. He equally failed to factor in the effect of inflation and devaluation on that his 50m and the 5m interest. The property equally |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by Nobody: 11:43am On Nov 15, 2019 |
khalids: Many people are financially illiterate. 1 Like |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by khalids: 11:45am On Nov 15, 2019 |
tot: Even as a pensioner, he will have no problems...because the profit from the treasure bills pays for the rented apartment and still leaves him with 2million to play around with........... Same pensioner that builds his house with 40m, has roof above his head but cannot feed, because his pension is not coming at the right time or has been swallowed by a political snake.... This is what the OP is analyzing for you 1 Like |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by Nobody: 11:49am On Nov 15, 2019 |
partnerbizn5: Property does not always appreciate. Property is like any commodity, subject to demand and supply and if you buy at the peak of a market your property may never appreciate in real terms in your lifetime I have already given the example of anybody who bought property before 2015. Most Nigerian properties are in real terms worth half of what you paid in 2015. Most people don’t understand this because we are dealing in Naira. The truth is most of our living expenses tract the dollar because most of the things we consume are imported. A good example, you cannot sell your property today and buy the same car or pay your children’s fees with the same Naira you used to purchase your house pre 2015. In real terms your pre 2015 property is worth half what you paid in 2015. See my post above for a more detailed explanation. 2 Likes |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by tot(f): 11:50am On Nov 15, 2019 |
khalids: So what happens when treasury bills rates drop to 2% for example and it can no longer cover his rent not to mention have change left to play around with? The security of having a roof over your head should never be underestimated. Investment climes change, stocks go up and down, same with savings rates. |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by tot(f): 11:54am On Nov 15, 2019 |
isthatso: Majority of the time, property appreciates - in most countries. The reason land generally tends to appreciate is because it is limited in supply, consequently, as the population increases, so does the demand for land, driving its price up over time. |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by dake40(m): 11:55am On Nov 15, 2019 |
tot: What he meant here is LONG TERM.. |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by khalids: 11:55am On Nov 15, 2019 |
tot: if the rate drops to 2%, he still has his original 40Million plus 800k interest....which he can diversify to continue to generate interest for him.... |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by tot(f): 11:56am On Nov 15, 2019 |
dake40: Yes I know he meant long term, but how that buttresses his point is what I don't understand. What difference would it make if the person planned to live there just for the short term 2-3 years? |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by tot(f): 11:56am On Nov 15, 2019 |
khalids: But he was banking on paying his rent with the interest. If his rent is 2m, and tbills interest is 800k, he would likely have to dip into his capital for the balance. 1 Like |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by dake40(m): 11:59am On Nov 15, 2019 |
tot: Bonds, Stocks etc will surface... Treasury bill is not the only investment plan that gives good returns.. |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by khalids: 12:04pm On Nov 15, 2019 |
tot: Agreed, let's not forget that he has 40M, will he just sit there and be chopping the money....he has capital to fund and resolve his challenges.... And besides anyone wise enough to see this benefit would not have been playing around with the interest that the 40M had been generating for them And if he feels he can't find any investment options, which is most unlikely...he can then go ahead and buy a house.... Whichever way you cut it, he is till in a far better financial situation than someone who just ploughed the 40m into one building. |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by tot(f): 12:04pm On Nov 15, 2019 |
dake40: You are not getting my point. Bonds historically are low returns, stocks which return more over the long term go up and down AND you can lose money as well. A roof over your head is guaranteed. Investments are NOT guaranteed. |
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