“People tell me this is obvious, but it’s ok to be obvious. Knowing and doing are different. Many people
know many obvious things they completely fail to do despite their knowledge”, Scott Berkum. The
observation is so real in personal property investment as decisions are made based on emotions than
the voice of reason. While obvious that one needs to plan, research, engage experts, pay fair value,
consider tenant needs, identify risk, and accurately project figures, the unfortunate reality is always
true, nothing is ever done at the individual level.
Decision-making in corporate real estate is multi-layered and versatile, in as much as they are made
by individuals who would have come together as management and/or board, surprisingly when the
same individuals have to be making personal property investment decisions, the standard procedures
and considerations done in corporates are ignored much as they are critical and with detrimental
Generally, property investment at the individual level is undertaken to hold value, trade, or sell later
and for income or cash flow particularly for retirement, which all make sense and are plausible.
Questions that arise from the decision are, has any thought process been put into motion, is there a
grand plan, does the property give the best returns, have professionals been engaged in the decisionmaking process, etc?
Let us take a look at the missteps that go without making the above considerations. Real estate
requires a substantial amount of investment and if all resources are tied to a single property when
liquidity challenges kick in, they trigger unplanned disinvestment before the envisioned time,
defeating the original purpose of having made the investment decision. This may require individuals
to consider crowdfunding or REITs or stocks in property companies than going it solo if resources are
limited. To add up, if an individual is buying to sell later, adequate financial planning and projection
for appropriate timing for when the funds will be required should be done, which is no easy feat.
To put this into context, one smart Jock Blew buys a huge property in the affluent suburb for half a
million dollars for purposes of holding value and planning to dispose of it when the kids grow up and
are ready to go to varsity. Firstly, the kids will go to varsity at different times which means the cash
requirements will be spread over a period, as such making the investment inappropriate. What would
need to be done from the half-a-million-dollar investment on a single property is alternatively buying
ten medium or high-density properties which on an ongoing basis will be disposed of individually to
progressively meet the ongoing cash requirements.
The same Jock Blew ignored the low returns potential of the big property investment after falling into
the affluence mentality at the expense of factual decision-making of interrogating basics of investment
which is based on Return on Investment (ROI). Consequently, the big property gave a monthly rental
of one thousand five hundred dollars – earning him an ROI of almost 4% per annum against a potential
9% return from $50,000 high-density properties. This sad experience is a common narrative for many
real estate investors, and it continues to happen.
Beyond that, the single tenant risk is too huge to overlook, while appearing tiresome to deal with
several tenants, the risk of default is too high on a single tenant than with multi-tenants. Rental
collections and general management of properties can be contracted to respective capable
professionals. The use of paid professional services is unfortunately nearly always considered an
unnecessary expense by individuals yet the losses resulting from unguided decisions are always too
costly. Engaging with professionals guarantees correct decision-making and protection from market
vagaries which is the reason why there are accredited professionals in the field of real estate. Imagine
building a high-rise building without an engineer, the results are catastrophic. It is a known fact that
advisors exist for a reason, in the same vein, valuers, estate agents, property managers, architects,
spatial planners, and engineers exist to give credible advice and solutions to the real estate value
When buying property, you do not pay exorbitantly and pray for inflation to recover the losses for
you. Purchasing should be done at an optimum level if not low so that the market upside will be one’s
Coming back to Jock Blew’s case, if he owned the half-a-million-dollar property for his own use, the
principle laid down by Robert Kiyosaki that your primary residence is not an investment applies.
Actually, it is a liability since it does not generate any cash flow but outflows on monthly basis through
municipal rates, repair, and maintenance costs. Imagine a house with a swimming pool but no
municipal water. Boreholes running dry, and the cost of buying water and chemicals yet the swimming
pool is only used at most during weekends only. In a majority of cases, individuals work hard and reach
the pinnacle of their careers around the late 40s, build massive houses and before enjoying them, the
kids are out and living on their own and the massive houses are underutilized and become a huge
maintenance liability in retirement where capital had been sunk without a return-on-investment
mindset, creating evidence of dead capital. The lesson here is, when building, even when blessed with
a lot of cash, go moderate, seek professional advice, and have investment properties outside one’s
While acknowledging that mistakes are common, the correction is critical and necessary, for
investments already done, they can be corrected through engaging accredited professionals for
informed portfolio audit and optimization, and asset restructuring, taking into account the individual’s
circumstances to achieve properly configured portfolios. A portfolio mix stabilizes returns and this is
born out of concentration risk where one would have overinvested in one particular type of property.
Jock Blew could have considered buying into residential, industrial, and commercial properties under
the same budget thereby addressing the sectorial and tenant risk.
The obvious is not always easy or simple and never guaranteed to be done, diligence is a must in
property investment. You can never do it all by yourself but Together Each Achieves More (TEAM) just
as property investment is a team sport.
Last but not least, the pessimists would always come up with bright ideas like challenging the legal
framework that is believed not conducive for an individual property investment when juxtaposed to
the progressive worlds such as the UAE where legislation supports and protects property investment.
It is never cast in stone that our nation will remain stuck in the medieval statutory framework just as
much as no one would have ever dreamt of REITs being recognized, legislated, and operationalized in
Zimbabwe ahead of Botswana, Mozambique, Zambia, Malawi, and many other nations. The real estate
asset class is getting the legislative recognition it requires, the rent regulations will be reviewed to
attract and retain investment into residential real estate, courts for landlord and tenant litigation will
be set up and more professional services will be born and rewarded accordingly.
The article was written by Mike E. Juru, the founder and CEO of Integrated Properties, he can be
contacted at firstname.lastname@example.org or +263773805000.