An investor understands that the task their money embarks on has the end goal of giving a more than decent return. Diversification is one of the few things that, when done right, gives the expected returns.
With the myriad of asset classes out there, real estate has proved to be a solid asset in many portfolios. But looking closer into it, real estate’s affordability has been quite subjective, with only so many people being able to acquire it, and even fewer being able to diversify into it.
Where is anyone able to come up with such an amount to purchase a part of the real estate pie, let alone enough to consider diversification? It seems difficult when we want to achieve our goals when the solutions are, quite ironically, the problem as well.
Let’s first see what diversification looks like in this arena. Say you purchase an apartment worth 10M that will give you a monthly rental income of Ksh 50,000. Not a bad investment. But there are many considerations in such an instance.
You will have to find a tenant and struggle with the problems that come with being a landlord; rent, water, and goodness knows what else. Even worse, if your tenant moves out and you are unable to get another, it does not give you the expected returns. This is putting all your eggs in one basket, not diversification.
Alternatively, you can identify a real estate company that will, for the same amount, deliver several options. For example, for the same 10M, you can get five studios, each 1.8M (and have a nice chunk of change left over) which give you a monthly rental income of Ksh 14,000 individually.
The studios can be in different locations according to the investor’s preference, are a passive investment, and spread risk evenly. It’s easier for one apartment to remain empty than it is for all five.
The one thing in common between your need for diversification and a business model developed by a team of highly passionate individuals is Financial Independence. With this as their guiding star, TSAVO and its Business Model was born.
Affordable Amazing Apartments were the brainchild of this team. A purpose that has stuck to this day.
The TSAVO Business Model consists of Designing, Building, and Managing Affordable Amazing Apartments. With the last step being Management, investors do not have to worry about the rest of the details that come with owning rental property since TSAVO does everything from tenant onboarding to rent collection.
With apartments ranging from studios to three-bedrooms and a clearly defined and researched market segment, TSAVO is a diversification heaven.
Most of their units consist of Studios and One-Bedrooms because they have identified Young Aspirational Urbanites as their target market for occupancy. The Young Urbanites make up 71.5 percent of the population as per the 2019 census.
TSAVO also provides metrics on the occupation rates in their different properties. For instance, it has maintained a 95 percent occupation rate over all five projects.
There are investment consultants who provide insight into the projects and address your unique investment needs. They walk the investment journey with you and provide more than enough information to facilitate your investment decision.
There is one great rule of investing as per Warren Buffett; never lose your money. Do your due diligence and ensure your investment will be worth it in the end.
The secret to investing is to make it as passive as possible.Let your money work for you so you’ll be free to concentrate on other things, and the rewards will be greater than you imagined.
Make your diversification decisions data-driven. In creating the best investment strategy, make sure you have all the facts and that you will earn while you sleep. Financial Independence is best enjoyed when your money does the hard work for you. Do the smart thing and [email protected].