Prime
Before you invest in apartments and bungalows...
Investing in building apartments like those of Kensington Luxury Heights may be rather expensive but beneficial in future as more people rent or buy them. PHOTOS BY ISMAIL KEZAALA.
What you need to know:
In this industry (of apartments and bungalows), there are those who build to sell and those who build to rent (invest). For both parties, the major aim is to maximise profits. “For this to be possible, a developer must consider the location and size of a piece of land
There was a time when huge single bungalows with an extensive compound were a common sight but today, we see only a few of these beautiful houses as the modern thing has become apartments (multi-storied blocks/flats), which are multiplying day by day.
Mr Nicolas Arinaitwe, the executive director of Real Estate Agency, Management and Consultancy, says the gradual change is because apartments are more profitable than bungalows.
In this industry (of apartments and bungalows), there are those who build to sell and those who build to rent (invest). For both parties, the major aim is to maximise profits. “For this to be possible, a developer must consider the location and size of a piece of land, research about the population size and its income level before they start building,” Mr Arinaitwe says.
If your apartments are situated in places like; Kololo, Bugolobi, Mbuya and Muyenga, where the population is characterised by high income earners, you will charge high rent. But for similar apartments in areas like; Kabowa, Namugongo and Namungoona, you will have to charge less because the population there is mainly of medium income earners. So at the end of the day, the person with apartments in places with high income earners earns more.
Apartment benefits
Mr Arinaitwe says apartment blocks have technical and economic advantages in areas with high population density in contrast to bungalows (low-rise and single-family houses).
Apartment blocks accommodate more inhabitants per unit of the area of land. One can have over 40 apartments on a small piece of land and the rental turnover is very high.
When one tenant leaves, you will get another one immediately. The bungalows are suitable for less populated places and those with high income earners. But at the end of the day, they are not as profitable as apartments (flats).
For maintenance, Mr Arinaitwe advises that every apartment has independent electricity and water metres. Then the monthly maintenance costs of shared things like the compound, common room and security services is divided amongst all or added to what they are to pay for rent. Flats are also more secure, especially if they are fenced. In case of any danger, people can support each other since they stay together.
Flat flaws
The problem with flats is that there is no privacy. In case one has a fight with their wife/husband, everyone on the block will get to know about it, which is not the case with staying in a bungalow. Also, children are exposed to so many habits some of which are not good. It is also hard for children to concentrate on homework or revision because flats are usually noisy.
Some apartments have little space so every apartment may be limited to parking space of only one car and one cannot hold a party from there. And for cases where the flats are owned by more than one person (condominium management), response to problems is not done urgently because the owners’ consent has to be sought before making a decision.
Bungalow credits
As for the bungalows, they are spacious and usually have many bedrooms together with a bathroom and toilet, sitting room, dining room and a garage, among others. The compounds are usually large enough for one to hold a party.
Tenants are free to do structural adjustments especially if one wants to renovate. In Additionally, it is also prestigious for one to be staying in a bungalow. However, bungalows occupy a lot of space, are less profitable and have a low rental turnover, for instance; if a tenant vacates the house, it may take about three months for it to be occupied. And the maintenance costs of a bungalow are high given that there are no shared utilities.
The estimates
Mr Jonathan Nsubuga, an architect at Je Nsubuga Associates in Kololo, off Wampewo Avenue, says for half an acre of land, one can build two bungalows of three bedrooms and he/she will need between $500 to $600 for construction for every square metre. On the same piece of land, one can have 12 apartments of two bedrooms. Construction for each square metre will cost between $600 and $700 per square metre if one can decide to sell apartments on one floor each at $300, and retain the rest for renting, which is highly profitable.
Building a block of apartments so that you sell off some of them and occupy the rest is profitable and more economical. If you have a family, a bungalow will be more comfortable for you because there is more space and privacy for everyone.
Advantages of apartments
• More profitable
• Higher rental turn over
• Low maintenance costs
• Occupy small space
• Less is needed for construction
Disadvantages of apartments
• Lack of privacy
• Limited space
• High level of poor hygiene
• No room for revamping
Advantages of a bungalows
• Spacious; outside and inside.
• Private
• One can revamp their house
• Prestigious
Disadvantages of bungalows
• Less profitable
• Expensive to construct
• High maintenance costs
• Low rental turnover
