I was in my
village recently, and as it is my custom, I take a stroll around as I walk back
down memory lane – reliving good memories, meeting old faces and observing new
developments. One of mum’s pet questions was when I plan to build a house in
the village.
I have seen cases of people with notices to quit from their
landlord giving them sleepless nights while they own a house in the village or
a building under construction. I know some who died in the city as tenants,
never living in the dream home they sunk their life savings into in the
village.
Owning a home of your own is a deeply emotional issue, and having one
where you come from more so, as it is akin to having your roots in the ground.
In many cultures, you cannot claim you are from a village until you can point
to your house if you are an adult male or your father’s house if you are a
child. There is nothing wrong with having a house in your village, if you can
afford one – afford being in the context of your financial goals. Many have
taken it to a whole new level, putting up a monstrous building or a mansion
which sticks out as a landmark, indicating the arrival status of the owner,
which may not be the case if you see where he lives in the city.
Many people believe their first building must be in their village. Why build
and help develop another person’s city? That is a valid point. If you look at
it from another angle, if you spend almost 40 years or more in a place and only
retire back home for another 20 years or so, which place is really your home?
Why pay rent for almost 40 years when you could have used that money to own a
home and put in other investments.
What role does your village mansion play in your investment plan?
One of the first things that come to my mind when I come across a
mansion or massive duplex in the village is cash flow pattern of the owner. Is
this structure putting money in his pocket or taking more money away from the
pocket? Does it generate rental income for the owner? If yes, would it not have
made more sense building in a prime location in the city to attract good rent
that can pay back the cost of building the house over a reasonable time period?
If it is a must that I build in the village, why not make it a win –
win, put up a building that fits the environment and the rent it attracts. If
you are renting, the amount of rent you get depends on a large extent on the
local market, not the beauty of your structure or quality of finishing. The
tenants may be impressed but they will offer to pay the going rent.
Would it not have made more sense delaying the gratification (and
applause) of building in the village, invest that money and build from your
profit over time? Why sink your sweat and blood into a project that yields no
financial dividends?
The ‘house in the village’ project robs you of needed funds to build
your financial security portfolio. You are essentially turning an asset into a
liability. If the owner of the house loses his job or suffers business
downturn, what will the house in the village do for him? Will the elders in the
village and impressed villagers bail him out?
Who is this
mansion for?
Who is this mansion for by the way? Is it for you to stay when you come
to the village once a while? There are many that may never resettle in the
village. They visit once a year or less, and when they do, they stay in the
family house or a hotel. An uninhabited house is not a good sight to behold
when you go through the door. A lot of work needs to be done for it to be
inhabited. Many things would have gone bad, like bathroom fittings, plumbing
etc. you may spend most of your time in the village dealing with maintenance
issues, or you have an experienced person that does that for you before you
come. Staying in a hotel works out much cheaper and more convenient.
In terms of occupancy, the house is not yours. It is more of a home for
lizards and cockroaches, or jobless relatives that will help you thrash the
house. These same relatives will help take over the house if the owner dies
intestate. Is this worth sinking your life savings into?
Many ‘house in the village’ projects end up as abandoned projects. Why
‘kill’ yourself trying to build a storey-building in the village when the money
sunk in so far could have completed a decent bungalow? Why put yourself under
self-imposed financial pressure?
What are your
financial goals?
It all boils down to your financial goals or lack thereof. Many have no
financial goals. Without clear and compelling financial goals, it is difficult
to determine what your priorities are. If you don’t know your priorities,
someone else will foist their priorities on you. If you don’t know what matters
most to you, you will major in minors and remain trapped in the rat race.
There are people that can afford to build whatever they want wherever
they want. They are not under any financial pressure. To get to this place,
they may have got their finances sorted out and are not digging themselves into
a hole financially.
Should you build a mansion in the village? You are the only one that
can answer that question.
Reference:
punchng
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