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Purchasing land is a significant investment, and in many cases, the costs involved can be quite expensive. However, with careful planning, a strong commitment to saving, and creative strategies, it is possible to acquire land even with limited financial resources. In this blog, we will delve into the reasons why buying land can be expensive and explore unique approaches to save for land purchases. Additionally, we will share a compelling real-life example of an individual who successfully bought land while saving just UGX Ugx 6m in a year.
I. Understanding the High Costs of Buying Land:
Supply and Demand Dynamics: a. Rapid urbanization and population growth increase the demand for land, driving up prices. b. Limited availability of prime locations with desirable features adds to the cost. c. Land scarcity in urban areas leads to inflated prices due to competition.
Government Regulations and Taxes: a. Land registration fees, stamp duty, and other legal expenses contribute to the overall cost. b. Taxes such as capital gains tax can significantly impact the purchase price.
Infrastructure Development: a. The presence of well-developed infrastructure, such as roads, electricity, and water supply, raises land prices. b. The cost of developing infrastructure in previously undeveloped areas can be passed on to buyers.
II. The Importance of Saving:
Establishing Financial Goals: a. Setting clear goals helps prioritize saving for land acquisition. b. Creating a budget and tracking expenses enable effective financial management.
Cultivating a Saving Mindset: a. Adopting a frugal lifestyle and minimizing unnecessary expenses can generate substantial savings. b. Implementing small lifestyle changes, such as reducing dining out or using public transportation, can accumulate savings over time.
Exploring Savings Instruments: a. Utilizing savings accounts, fixed deposits, or investment options can provide higher returns and accelerate the saving process. b. Consulting with financial advisors can help identify the most suitable saving instruments.
III. Creative Strategies to Buy Land with Limited Income:
Joint Ownership and Partnerships: a. Collaborating with family members or trusted friends to pool resources and collectively purchase land. b. Sharing expenses such as down payments, legal fees, and development costs.
Land Cooperatives: a. Joining land cooperatives or community-based savings groups to collectively save and invest in land. b. These groups offer shared ownership and opportunities for acquiring land at more affordable prices.
Rent-to-Own Programs: a. Engaging in rent-to-own agreements where a portion of the monthly rent contributes toward eventual land ownership. b. This approach allows individuals to accumulate equity while living on the property.
IV. Inspiring Example: Yasin Bakaluba Sekimwanyi, the proprietor of Bakulaba Properties says everyone with a source of income has the ability to own land and build a home.
For example, he says, many diasporans earn less than 2,000 pounds a month, and yet they have bills to clear. So, it is hard to save for a house above sh50m back home.
In the same way, corporates and low-income earners in the formal and informal sectors dream of owning homes, but achieving this dream becomes difficult owing to their tight budgets.
Bakaluba is of the view that in looking for where to build, people should look beyond Kampala and Wakiso district suburbs that are already congested.
“Find cheap land in what seem like far off places now. Before you know it, they will also be urbanised,” he says.
Speaking out of experience, Bakaluba recalls buying his first plot in Kulambiro, an outskirt of Kampala in 2003 at sh6m. He was working in the UK as a security guard.
“I intentionally lived below my means while in London and managed to save sh6m in two years. I came back home and bought land,” he recollects.
After getting his land title, Bakaluba started developing his 50X100 plot. He put up six two-room rental units each fetching sh100,000 a month.
“I built in stages and completed them in about 18 months. Materials and labour were not as expensive as they are today,” he says.
Bakaluba also opened an account where tenants deposited rent.
The following year, he withdrew sh7.2m and topped up his savings and bought another plot in Kisaasi, another suburb at sh12m.
He put up eight rental units each fetching sh100,000, from which he collected sh800,000 per month. He topped it up and bought another plot in the same neighbourhood and has never looked back.
“My father inspired me greatly. I grew up seeing him buy land and develop it slowly. He was never in a rush,” he says.
By the time Bakaluba returned to settle in Uganda after 19 years, he had accumulated several properties. Today, he has dipped his toes into the real estate industry as a developer of commercial and residential properties.
“Keep buying and keeping. With time, you can sell one piece and develop the other. However, remember to ward off grabbers,” he advised.
He gave an example of a lady who has been in London for over 40 years. She bought a plot of land at sh5m along Entebbe Road in the 1990s. Recently, she sold it at sh1b for a petrol station development.
“This lady had failed to save and build a decent house in Uganda. With the money she got, she bought apartments,” he said adding, “You will never go wrong with cheap land.”
In the same way, Micheal Mugabi, the managing director of Housing Finance Bank (HFB) says, despite the effects of COVID-19, they have continued to enable Ugandans to own homes and properties.
“We had to find a way to absorb the COVID-19 shock. We give mortgages and small loans to people to build slowly,” he says.
He adds that they also solved the problem Ugandans have with collateral.
Anthony Kituka, the managing director, of Equity Bank notes that there is also a huge demand for housing in all the different spectrums; high, medium and low. Even in the oil cities such as Hoima and Buliisa.
There are investment opportunities in simple things like motels along the roads and shopping stations.
“Banks have come on board. Use them to benefit from those investment opportunities,” he advised.
Conclusion: While the cost of buying land can be daunting, it is not an insurmountable challenge. By understanding the reasons behind high land prices, adopting a dedicated saving mindset, and exploring innovative strategies, individuals can achieve their dream of land ownership. The inspiring example of Jane, who successfully acquired land on a modest income, serves as a testament to the possibilities that exist with determination and strategic planning. Remember, with careful financial management and perseverance, the goal of becoming a landowner can be within reach.
Buying land or a house in Uganda can be a complex and challenging process, especially if you’re not familiar with the local real estate laws and regulations. To help you avoid some of the most common mistakes people make when purchasing property in Uganda, we’ve put together this guide. Here are 10 mistakes to avoid, along with some possible solutions.
Not doing enough research: One of the biggest mistakes people make when purchasing property is not doing enough research. This can include not researching the local real estate market, not checking the zoning laws, and not looking into the history of the property. To avoid this mistake, make sure to do your due diligence and research the property thoroughly before making an offer.
Not getting a professional inspection: Another mistake people make is not getting a professional inspection before purchasing the property. This can lead to hidden problems, such as structural issues or hidden damage that can cost a lot of money to fix later on. To avoid this mistake, make sure to hire a reputable inspector who is familiar with the local building codes and regulations.
Overlooking the property’s location: Location is crucial when purchasing a property. It’s important to consider factors such as proximity to schools, shopping centers, and public transportation. Overlooking these factors can lead to dissatisfaction with the property in the long run. To avoid this mistake, make sure to carefully consider the property’s location and whether it meets your needs and preferences.
Not considering future needs: Another mistake people make is not considering their future needs when purchasing a property. This can include not thinking about potential family growth or changes in lifestyle. To avoid this mistake, make sure to consider your future needs and whether the property will still meet those needs in the long run.
Failing to budget properly: Failing to budget properly is a common mistake. It’s important to consider not only the purchase price of the property but also the ongoing costs such as property taxes, utilities, and maintenance. To avoid this mistake, make sure to create a comprehensive budget that includes all of the potential costs associated with owning the property.
Not understanding the land laws: Uganda has complex land laws, and failing to understand them can lead to legal problems down the road. To avoid this mistake, make sure to consult with a reputable real estate attorney who is familiar with the local land laws and regulations.
Not understanding the NEMA laws: The National Environment Management Authority (NEMA) has regulations that govern the development and use of land in Uganda. Failing to understand these laws can lead to legal problems and fines. To avoid this mistake, make sure to familiarize yourself with the NEMA laws and regulations, and consult with a reputable environmental consultant if necessary.
Not getting proper documentation: Failing to get proper documentation, such as a land title or building permit, can lead to legal problems and disputes over ownership. To avoid this mistake, make sure to obtain all of the necessary documentation before finalizing the purchase.
Not negotiating properly: Failing to negotiate properly can lead to overpaying for the property or missing out on a good deal. To avoid this mistake, make sure to do your research on the local real estate market and work with a reputable real estate agent who can help you negotiate the best price.
Not working with a reputable real estate agent: Finally, not working with a reputable real estate agent can lead to a number of mistakes, including not getting the best deal, not understanding the local market, and not having access to all.
When President Yoweri Museveni visited Joseph Ssebugenyi’s farm in February, what he saw was the peak of over 14 years of focused work. Yet the successful Ssebugenyi became a farmer almost by accident, because of an insult. Oryomushuma (you are a thief), a man who had brought potatoes for sale in the market told him.
It was early 1995 and Ssebugenyi was a small-time fresh foods seller in Owino market. The man insulted me because I had picked one of his potatoes. But this insult changed the course of my life, he says. The insult was too big for the then 40-year-old and father to over 7 children, that when he went back to his home that day, he sat and evaluated his life. He was not satisfied with the meagre money he made. It was barely enough for me and my family to survive on, he says. He was making an average of sh2,500 per day. And this had to be shared with transport costs from his Kanyanya home, a Kampala suburb, to the city where the market was. That night, he decided to abandon hawking the heaps of fresh foods and start farming. My friends laughed loudly when I told them about my plan the next day. They said I would never make it in agriculture because I had no capital, Ssebugenyi says.
He keeps quiet momentarily, then boasts about the cool air in the sitting room of his newly furnished house. Gesturing at the fan and then at the smooth cemented floor, he says, These are the fruits of my hands. This house came from the farm. When he decided to leave Kampala for his village back in 1995, he only had a deserted old house to go to. He had left it when he was fleeing the 1982 bush war. I came with nothing from the city apart from a black coat, a trouser, a shirt, two slashers and a hoe, he says. He also had a small saucepan that trebled as a food pan, a kettle and a saucepan. I did not even have a sh100 coin to transport me from the trading centre (Kasana-Kikyusa) to my village in Bulemalwogi when I came, he remembers. When he finally reached home, he found the place was infested with snakes and other reptiles, and the grass overly grown. He had not bothered to visit it regularly because, “I did not think I would ever return. My initial evaluation was that I would not manage.
I tried to plot a way back to the city, but had no money. I had no way out but to work, he says. And that involved slashing overgrown grass, evading snakes and other reptiles, encountering stingy insects, a daunting task. He had five acres of land under coffee and had returned to renovate the coffee garden and earn from it. I vowed to clear at least five coffee trees daily. The first days were difficult, but after two weeks, I had made a routine, he says. The garden had been planted way back in the 70s but had been abandoned during the war years. The coffee trees had grown wild and had become a forest of sorts.
He worked himself so thin that people thought I had AIDS.The tongues had been wagging already: Wherever I passed, I could here them say, Laba oyo ekibuga kyagaana, (see that failure from the city) but it did not deter me. By the end of 1995, when he was almost clearing the entire five acres of coffee, the coffee season began and he unexpectedly started to earn money.
It was difficult to believe that the forest I had neglected for so many years was now paying, he says. But even before the harvest, he had already identified another enterprise – pineapple growing. I had seen other people in the village dealing in pineapples and also wanted to invest in them, he says. He did not have any money to invest though. His coffee would only start to bring money in November. He turned to friends for assistance: I had cleared over an acre ready for the first pineapples, so I went out and started begging for suckers (plantlets), he says. Some people gave him as little as 10 suckers while others gave him more. He planted and had to wait for another 18 months before he enjoyed his first harvest. Today, he gives out suckers too; keeping heaps and heaps of them lying around his shamba.
He now has 12 acres under pineapples within each acre containing over 12,000 plants. In total, he has 20 acres under commercial agriculture. In the coming season, he expects to harvest at least 140,000 fruits and sell them at an average of sh700 each. Ssebugenyi also has over 800 plants of bananas that he commercially maintains, which he turned to when the coffee wilt attacked most parts of the country in 1997, including his garden. I had to look for another enterprise to replace the reducing coffee fortunes, he says.
At any one time, there are at least 100 bunches of matooke, ready for harvesting. We sell each of them at around sh5,000,he says. And this is only because he does not have his own transport to take them to Luweero market or Kampala. Ssebugenyi also maintains 5 cows. Two of these were donations from in-laws when two of his daughters introduced their fiances. He bought the other three. He keeps some milk for domestic consumption and sells the rest. Ssebugenyi cherishes his farm, which he calls my office. I make sure I visit my office before doing anything else, he says. It is not surprising that he knows every part of his 20 acre farm like the back of his hands. Go and harvest the bunch from the other end, he tells one of his workers. He adds, But not Nakabululu. Knowing your office makes work easier. That is why I make sure that I know every inch of this farm, he says. As age slowly catches up with him, he is venturing into another field – planting hard-wood trees for timber.
When he had just come back on 1995, he planted several musiizi trees. The 13-year-old trees are now tall and can produce at least 30 pieces of timber each. He wants to plant more of them. When the NAADS programme started in Luweero in 2000, Ssebugenyi was one of the village farmers selected to benefit from the programme. NAADS, he says, has been instrumental in giving him and his workers more skills. A NAADS coordinator, Dr. Kazibwe, regularly comes to visit and advise me, he says. His success has since attracted other groups including CARITAS. Challenges It has been challenges through and through for Ssebugenyi. Lack of capital, poor markets, pests and diseases have at any one time affected his progress. I did not have capital to start with, but overcame that by using the available resources, he gestures around while adjusting his sombrero.
Land is a very big capital that so many people do not know how to use. I had this land and used it to become who I am today,he adds. There is also a scarcity of casual workers to plough the farm. At any one time, I need at least six people on the farm. But workers are very rare, he laments. He also had a transport problem which has since been solved with the gift of a truck from President Museveni. Achievements He is cagey about how much he earns annually and only says he counts his earnings from what he has been able to do. This house is entirely from that farm, he says.
It was constructed through an initiative by the then bishop of Luweero diocese, Cyprian Kizito Lwanga. They required that a person pays 50% of the cost through the church. I was the only one who qualified because I had backing from my farm, he says. Ssebugenyi has also been able to educate his children through university. One did computer technology, while the other did accounting, he says. Land is capital. People should realise this and use it to fight poverty,he says.
