My weekend insight (21/11/2020)
By Sabiiti Herbert

Lately, there is an ongoing teaching by “financial consultants” that investing in rental properties is not a wise decision. According to their theorem, you would rather invest your money in stock, bonds or mutual funds. As a real estate and financial consultant, i hold a different opinion & would refute these allegations on any day. I tell you, it’s such a noble thing always to diversify your investments and real estate investment is an area you ought not to skip. Quote me right, am not saying that other avenues of investment are not feasible but you can always strike a balance aka “balance the boat” as it’s locally mentioned.

According to Uganda Bureau of Statistics (UBOS), there is a housing deficit of 2.1 million units and this figure grows by more than 200,000 units annually. Therefore, depending on your target market and location of your property, there is always demand for rental premises.. believe me you.

The pros for investing in rental properties are many and below are only a handful of them;

1. Monthly take home.
Most working class folks are renting…if you are a landlord it means your tenants partly work for you because you indirectly share on their salary.

2. Rental income is always above inflation
To those who may be familiar with landlords’ letters that read thus…”As you’re aware, the cost of living has increased, therefore beginning with x month your rent shall increase to…” The landlord does not want to know whether your salary has increased or not. Some landlords increase rent when your cost of living improves. I have this friend who bought a car and the following morning the land lord sent her a letter of rent increment.

3. Using other people’s money.
You can actually buy or build your rental apartment using loans from the bank. May i however note that the interest rate in Uganda is you may want to consider subscribing into a SACCO or Cooperative with that much financial muscle to aid your investment. Try to keep your mortgage limited to 5 years tops or ensure atleast the net income after all expenses including mortgage payment is above 6% of monthly total rental income.

4. Appreciation
It’s obvious that real estate appreciates in value by the day. Owning (a) rental apartment(s) will definitely increase the value of your land however much the building depreciates.

This of course depends on where your property is located. This means that as an investor, you grow your net worth overtime.

5. Retirement
My former landlord is a retired economist who used to work with bank of Uganda. He told me, he concentrated on building rentals for his retirement. Today, he finds no pressure watching his money grow on the account. Yes rentals are good for retirement.

However, be cautious on type of tenants that occupy your property. Sometimes the cost of repairs exceed their security deposit.

Try using a professional company for property management like Ridgeline ( and any other so that you can concentrate on your other businesses.

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  1. You’ve only given one side of the view (Pros). .. what of the other side (cons). As a student of your notes I would like to see both sides of the coin. Thanks!

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