TOP
Tuesday,September 22,2020 15:32 PM

Ways to diversify your income before building

By Vision Reporter

Added 9th September 2013 01:39 PM

It is such a demanding activity that even when you think you are ready to start, you may not. However, even you commence construction, estimating when it concludes is, often guess-work.

It is such a demanding activity that even when you think you are ready to start, you may not. However, even you commence construction, estimating when it concludes is, often guess-work.

By Joel Ogwang

It is such a demanding activity that even when you think you are ready to start, you may not. However, even you commence construction, estimating when it concludes is, often guess-work.

Before the actual construction work commences, adequate preparations are requisite so as to accumulate enough resources — both finances and time — to procure construction materials, labour and meet other accompanying costs.

“Building a house, whether for residential or commercial use, is a project,” says Dedan Balinda, a civil engineer attached to ASSPRO Consultants. “It not something you do in a month and you are through, it takes years to conclude.”

Preparation is key

Construction of a house starts when the idea is conceived and plans made to reach at the final product. This lays the bedrock of the actual works. Key to building a house is land. “When I bought a plot at sh10m, I knew I was half-way the journey,” says Musa Kafeero, a shopkeeper in Ntinda, a city suburb.

With its elastic demand against an inelastic supply, property rates are always appreciating, so it is advisable to buy land soonest. A plot that cost sh7m will, for example, double or even triple within 12 months. When you have land, you need money to start the construction

“If you are sure the money you have is not enough to start, postpone it. It is better to seek a professional architect’s counsel before start.”

Cash-flow critical

Even before the foundation is laid, it is imperative that a person guarantees the cash-flow to ensure no abrupt stops due to resource constraints or any other foreseen hitches occur. “You need to have Bills of Quantities (BoQs) before you start construction,” says Sandra Asiimwe, an architect at Arc-Mark Engineers and Planners.

“These help you estimate how much you will spend from start to completion.” For most employees, salary is often the main source of income, just like profits are for those engaged in business.

However, depending on which side of the divide one falls, diversifying the source of income is critical to avoid heartaches before, during and after the construction works.

“It is better to diversify your income because construction work is not easy,” says Asiimwe. “Your salary alone may not be big enough to last the full construction.”

Diversify income source One way is to get a loan, just like most entrepreneurs look to it for their start-up capital. Depending on the terms of repayment, taking a loan where the interest is manageable is not as bad.

For a salary earner, business is always the nearest option through which they can diversify their income. This is wide-ranging. While one may start a retail shop, the other may take-on poultry, farming or sell assets.

“If it is a business, you have to make sure it is  well established before you invest proceeds,” says Asiimwe.

“Hardware dealing is a good business,” she says. The choice and nature of one’s job matters a lot when deciding the activity to engage in. Most business activities are so demanding that to reap profits; the owner ought to manage it full time lest workers steal from the business.

If you won’t be available often, then the choice of stand-ins or helpers matters, too. “A salary earner can go for a loan to invest in rentals because they are rewarding,” says Balinda. “When it is a retail shop worth sh2m, you have to ensure it is well established before you take money out of it. If not, it will collapse. In construction works, savings of any kind is very important,” she says.

Ways to diversify your income before building

Related articles

More From The Author

More From The Author