Want a house? Build rentals first

By Joel Ogwang

Judith Mirembe, an employee at a charity located in Kansanga says, the decision to build a six-bedroom house in Mukono town in 2010, came easy.

“We had a 100ft x 50ft plot of land,” she says. “Tom Oguttu, my husband and I agreed to contribute towards building.”

Mirembe invested savings of sh8m, while Oguttu invested sh10m. But Mirembe lost her job in 2012. This left Oguttu as the sole financier of the construction, off his sh2m salary, sh350,000 of which went to rent and sh200,000 for upkeep.

Why a launch-pad is critical

When her father-in-law visited, he castigated them for being too ambitious, says Mirembe. “He said we needed to build a single bedroom house to live in temporarily, to avoid paying rent, while we proceeded with constructing the main house. “We were forced to do partial completion on two rooms where we now stay, to avoid rent that was becoming unbearable. I wish he had advised us earlier!”

According to David Lubwama, an architect attached to Nest/ EHO Associates, a launchpad is pertinent when building a house. “It enables you to save on rent, while you construct the main house,” he says. “This is the easiest way for a person who doesn’t have a lot of money, to build a house.”

Rental units better

To off-set rent dues but also earn money to build a house, one can erect rental units first. A single-bedroom house with a living room and bathroom costs about sh4.5m. Depending on its location, a person can reap between sh150,000 and sh350,000 monthly, earning over sh4m a year, says Lubwama.

“If you have five units, that is over sh20m a year,” he says. “In five years, you can earn sh100m to build your dream house.” Rental units are also a lifetime source of revenue and they make life easier after retirement. “I earn sh25m annually from my four rental units,” says Isaac Kirunda of Kira town council.

“I want to quit my job because I have a steady cash flow from my rentals.” “The challenge is raising the money to build them,” says Lubwama. “Land is very expensive in urban areas. In addition, this favours the wealthy over people of humble means.”