The definition of affordable changes from country to country or from one individual or household to another. It’s all about your perspective. In this article, we will explore 4 interesting ways you can look at affordability in real estate.
The first and most obvious way is your capacity as the client to not only secure a unit but also finish the payment in due time. What have you budgeted for?
Assuming you had a budget of 7 million for a simple three-bedroom bungalow and you found a 3-bedroom going for 6.5 million. You would call that house affordable right? For the remaining 500k, you can pay closing costs because it’s not included in the purchase price.
Let’s say maybe you just got away with a deal of four million. And your dream is to own the same 3-bedroom bungalow (going for 6.2M). You can pay that first then the rest you can bargain with the developers to give a longer payment period.
Are you a mortgage client? Your affordability will be determined by financiers who examine your credit scores and other factors such as your bank statement. Then if you can afford the down payment which is usually 20% of the purchase price and hope that your job is secure or your business booms till you finish paying that loan, you’re good to go.
Affordability can be looked at using the market-based approach vs the selling price. Take Twin falls city for example a prime investment of ultramodern flat roof bungalows touching along kangundo road going for 6.5M only. This compared to the market price of 7.25 M (according to Kenya Property Centre) is Ksh 750,000 less which one can use to pay closing costs and for moving.
The last perspective of affordability is the amenity-based approach. A house located nearest to amenities such as roads, schools, hospitals, and recreational areas will automatically be more expensive than one in the interior with marram roads and dispensaries and grocery shops located a mile away. However, this is not the case when it comes to Twin falls city. All amenities, schools, police stations roads, name it, are located meters away from that gated community.
The Bottom Line
Whether a property is inexpensive or not depends on the way you look at it. What is most important to you is the design of the house or the distance from amenities and the workplace? Let us know in the comment box below or contact Mintvilla Housing on 0711082929 or 0708888222.