In the second and final part of this series, Felista Wangari dispenses more tips on how to make your home ownership dreams come true.
When buying land to use to construct your home, consider areas that are not quite developed now, but have potential for development based on their proximity to a developing area or on plans for a major road that would open up the area in later years.
Such land might be more affordable to buy and keep as you save up on other home ownership costs. Another option is to buy a chunk of land as a group, subdivide and come up with your own gated community.
Some of the costs you can’t escape are legal costs (search fees, Land Control Board, consent to develop agricultural land if the land is outside municipalities), professional costs for a surveyor, valuer, architect, etc. Beware of trying to save money during the construction, some shortcuts may be fatal. Have your budget and find out what it can reasonably do for you. Using alternative building technologies can help you save money and time, given that a big part of construction costs comes from construction materials. For this reason you can consider interlocking blocks and other cost-effective building technologies. You can even opt for a container home as you work on building your home using the money you previously used on rent.
The first question is how much of a mortgage you can afford and be able to pay based on your income and expenditure on other necessities. For instance, if you earn Sh70,000 net, the whole amount cannot go towards paying the mortgage, given that you have other costs to meet.
You’ll also have to meet some upfront costs like lawyer fees, stamp duty, deposit and other related costs. An alternative to a mortgage might be a construction loan from a Sacco or you can join a registered housing cooperative whose goal is to help members own homes.
This allows you to pay for a property before it is constructed, and thus is meant to be cheaper than buying a built house. Before you sign up, weigh your risks versus the gains in putting your money in that project. Do your due diligence on the developer and whether they have built off-plan houses before without issues and how they are holding up in terms of wear and tear.
You can protect any property you own before marriage with a prenuptial agreement (which are now legally recognised) which outlines protection for your property rights. Make sure you have a will detailing how you want your estate to be distributed upon death, and that your spouse has one too. Know what your husband owns and know what your property rights are to save you pain in case of your spouse’s death. If you co-own property, make sure that the ownership document provides for joint ownership not tenants in common as this is affected by law of succession.
As with all other goals, start small and work your way to your goal steadily.
Felista runs 52-Week Savings Challenge Kenya, a money management group on Facebook. You can email her on [email protected]
