How to Avoid Stalled Dream Home Project
2 months ago, 12 Oct 06:41
It was the late Paul Samuelson, the first American to win the Nobel Memorial Prize in Economic Sciences who said: “Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.”
The same could be true for constructing a house. Getting land, especially in urban set-ups like Nairobi is never easy. Buying genuine land and turning it into a dream home is even more demanding.
According to Mugo Mutembei, the CEO of Bristem Developers, the next three important things to do after acquiring land should be to plan, plan and plan again.
He adds that bankruptcy, abandoned structures and court cases are sure packets of misfortunes for anybody who tries to cut corners to own a house overnight.
“That is very common. If you go to areas which are developing, you will find so many uncompleted structures. That means the owners did not plan from day one. In fact, they were not aware of what they were entering into,” says Mr Mutembei.
In such cases, the search for rent-free life turns into a debt trap with an amplified risk of losing out the very land to financiers such as banks.
According to Land price index by Hass Consult, a real estate agency firm, land prices have maintained an upward trajectory, making it extremely important to plan in order to avoid losing money.
For instance, an acre of land in Donholm now averages Sh70.6 million and Sh60.9 million in Langata. In Parklands, one will require Sh414.4 million for an acre while the same size will cost Sh559.7 million in Upper hill, Sh408 million in Westlands and Sh143.7 million in Muthaiga.
Since such enormous figures may leave one with weaker financial muscles to construct houses on their own, one may opt for getting a loan for development. In an economy of depressed credit to private sector, getting the loan requires more than just having the land.
For banks to be convinced, one should present a title deed, the drawing for the dream house, bill of quantity and approved drawings from county government. In addition, one should have identified a contractor who is registered by National Construction Authority (NCA).
“Without these crucial evidence, banks may never get interested. So if you just plan blindly to rely on loan, you may be in for a shock,” cautions Mr Mutembei.
This means that one has to gather the right team of professionals to consult and bring on board. This will include the architect, engineer, quantity surveyor and the contractor. In addition, a lawyer will be critical.
Have an honest conversation with the quantity surveyor and explain the kind of house you have in mind and the amount of money they are willing to spend.
An architect will help design the dream house while a structural engineer will be handy in doing drawings especially if it is a storey house. This may involve the architect taking a tour of the land. With the two drawings now, Mr Mutembei says that one should move to a quantity ...
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