Some experts are convinced investing is much better than saving. You may wonder how? Well, investing assures you have passive income until death. On the other hand, saving means you have money stored.
If you are big on investing, it’s possible you have tried real estate investments. However, there are others who have no idea where to invest. Although they can’t be blamed since in Kenyan culture saving is ultimate. Saving to own a home is different from investing your savings than buying after getting returns. Honestly, what is better?
Related: Real Estate Investment: How to Be Smart about it
The logic is you will need savings to invest but the gist is- saving to buy will take longer. For example, your dream house will cost you Kes 5 million- you start saving kes 30,000 a month in a year you will have saved Kes 360, 000, in 5 years you will have saved Kes 1.8 million. This amount is nowhere near the cost of your house. On the other side, you invest the Kes 360,000 in a property that offers is guaranteed to own the property after the said 5 years.
Mind-blowing?
This is in no way to discourage you from saving but to give you another option for long term saving. Just imagine if an emergency occurs, you will use your savings to sort it out. Savings are important but they are short term. Investment goes a long way, especially for retirement.
You can be a big saver and it works for you however does it earn you interest? If you want to grow your wealth you should consider venturing in aspects that provide you with continuous growth. Back to the topic, of saving to buy- unless the bank has an interest rate then saving is not as efficient as you assume.
Why investing to buy?
Investing in real estate has three options:
- You will own the property after a while; for example, if you are investing in an apartment building you are guaranteed to own one unit according to your contract with the developer. This unit can become your home.
- Second, is you can earn passive income from the rent of the unit making you a landlord.
- Third, you can be a general investor can gain returns but not owning any property.
The bottom line:
Both options benefit each individual differently. You have to weigh the choices before deciding a way to finance your home. Moreover, if your savings aren’t enough mortgage is always on the list.
Furthermore, Kenya Homes is ready to assist you on decisions of home buying. Consult us today, get that specialist view of real estate.
