March 2021

There is a common misconception that in order to gain success in any business, its purely about having a brilliant idea or adequate capital. While these elements are indeed essential, they are just pieces of a much larger puzzle. Financial education serves as the glue that binds these elements together, guiding entrepreneurs in managing resources, understanding market dynamics, and making informed...

Believe it or not, one of the most important indicators of whether you can become a millionaire is how you think. Yes, a large part of financial success begins with your mind. What are your thoughts about money and wealth? Do you think like the wealthy? Millionaires are not afraid to take risks. Many of us fear change and would rather settle on the easy path - the path of least resistance. This...

Note: We will get practical in this journey to financial education. For now we are just dealing with basic but very important concepts. We’ll also be relating to the Kenyan scenario(s) so as not to sound theoretical. Just to caution readers that I have a bias to real estate and most of the topics will revolve around it in future. However, other important topics like financial planning, chamas, Life...

A deed is a signed agreement especially about the ownership of property or legal rights. A Title deed is a legal document providing somebody’s right to property and subsequently ownership. Then what is a deed plan? This is a signed plan by the Director of Surveys showing the precise particulars of a surveyed piece of land. It shows the details as in the shape of the plot, the distances and bearings...

On this particular Saturday morning sometimes in 2008, my partner Paul and I met one of our brokers who showed us a very nice piece of land in Ruiru off the Eastern bypass. It was approximately 2km from the junction of Thika Road and Eastern bypass towards Ruai, third row from the tarmac. The site was wonderful but we have since learnt not to be so excited by the aesthetics of a shamba. The shamba was up...

Paul and I met this broker who was introduced to us by a friend in Rongai. This was on a cold Thursday morning sometimes in August 2010. The guy went ahead and showed us a very nice 2 acre piece of land around Rimpa, some place between Rongai and Kiserian. It had an old building and was on sale. We felt the price quoteed by the owner was quite low. However, the story went that the owner was liquidating a...

I signed that agreement and I never really understood most of the clauses therein. This is a common issue with most land purchasers. Did you know in the unlikely event of failure to complete a land purchase transaction and in the event of failure to resolve amicably any issues that may arise, the recourse the purchaser or the seller have will be based on the content of the agreement. Let us try and...

... “The sale is subject to the Law Society Conditions of Sale (1989 Edition) in so far as they are not inconsistent with the conditions in this agreement.” The LSK Conditions of sale (1989 Edition) are boiler plate set of conditions to aid in drafting of agreements and guide the sales and conveyancing process. They outline how critical matters are to be dealt with...

We shall base the info herein on a subdivision of a freehold title. Before you subdivide any land, you must get the consent to do so from the Land Control Board. Ideally the consent is issued upon the proprietor appearing before the Board. Notice that all land transactions are controlled. However, we all know that in Kenya, we may not necessarily appear before the board, but we can get what they call...

If you look at a title deed, you’ll notice that the approximate area of the plot / land is normally in hectares. 1Ha = 2.47105381 Acres = 10,000 Square Meters 1cre = 0.404685Ha 1 Meter = 3.2808399 feet Having understood the above, what is a 50 * 100? This is usually in feet. If you look at a plot that is 50*100 (exact measurements), then the same would translate to...

Just before the expiry of your lease make sure you write a letter to the Commissioner of Lands informing him that you are the current holder of the lease and you are requesting for its renewal. You also must undertake to pay the charges attributable to the renewal. The letter will be filed at records and a request dispatched to the land officer of the respective land registry where the Certificate of...

The Physical and Land Use Planning Act, 2019 (previously Physical Planning Act (Cap 286) now repealed) change of use: “The owner of Plot LR NO. AAA/AA located wherever is proposing to change the use from agricultural to residential (multi-dwelling) subject to approval by AAAA Council. Individuals, institutions etc. with objections to the proposal are requested to forward them in writing within fourteen...

Did u know that the Kenyan Government only recognizes title deeds and allotment letters as bona-fide documents to show proof of ownership of land? And by the way, from our previous lessons, the allotment letter is just an offer and the expectation after receiving the offer is to accept it by way of paying the charges therein. So, when you purchase a plot from a land buying company and all you receive...

Joint ownership of property will come in two forms: Joint proprietorsProprietors in Common When two or more people purchase land, they can be registered on the Title as either of the above. Where two or more parties register as Joint Proprietors each registered owner does not have a specific share of the property - all owners have an undefined share in the whole of the land. The right of...

You probably don’t trust your wife / husband that much and you think it is wiser to register that property in the name of the kid. In the new act (Land Registration act 2012) the issue of minor’s registration is dealt with in section 47: “The name of a person under the age of eighteen years may be entered in the register to e n a b l e the minor’s interest to be held in trust and shall be...

When you see the word debt, what comes into your mind? Is it the HELB loan, the soft loan you took from a friend, the goods unpaid for in the shop in your estate, mortgage or that credit card debt that keep following you? We have two forms of debt that are fundamentally different and can never be painted with the same brush. Read on and you might discover how debt can actually be good for you, when...

Leverage (debt) magnifies outcomes. What does this mean? To illustrate how leverage works in a real estate investment, we'll take the following investment parameters (The figures are hypothetical but not so far from reality, just to put the points across): •Construct 5 units for sale each at construction cost of 5M (inclusive of land) •Financing at 14% interest (service interest during...

The higher the leverage, the higher the risk but as we saw last time the higher the profit margin. We all agree that in Kenya, a developer’s world only makes a lot of sense when the concept of OPM (Other Peoples’ Money) is utilized to the maximum. So then along the same line of thinking, developers in Kenya are clever enough to utilize the less risky of the OPM. Off plan sales The idea is of...

When it comes to Real Estate Investment, it is often said that the secret to success is location, location and location. Where you invest is generally more important than how much you invest. There is a very strong link between where your real estate investment is located and the financial success you will enjoy. There are several examples of individuals with access to a lot of money and who also...

We have seen it happening. Some hardworking chap struggles to set up a business that becomes and empire. Soon after transition, the empire collapse like a stack of dominos. Or you could have noticed a cycle in family fortunes that change from generation to generation. One generation finds nothing to inherit, and then they struggle so hard and by the time they are going they leave massive wealth. The...

Research has shown that 70% of family businesses do not survive from generation to generation. This is quite sad bearing in mind the hard work of setting up a successful business. If you own a family business and you want to retire, it will not just be a matter of waking up one day and deciding not to go to work .So the question of what happens to the business in your absence is paramount. Who's going...

We all know we should make a will, but it’s one of those things that many of us never seem to get round to. We keep procrastinating. In fact, it’s estimated that one in three people die without ever having made one. Making a will now prevents a financial headache for your family when you die. But not making a will may mean chaos and financial worry for your family or dependents after you’ve gone....