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Morris Mpala, MoB Capital Ltd
A HOUSE is emotionally and psychologically an asset and defines generational wealth to the would-be future generations.

A new wave of development and financing has been targeting the low-end market which is very profitable.

Most lower-end markets give a better return on investments and that is where competition is real tight right now.

This has seen a lot of investments into this segment market and has provided low earners a chance to own at least a stand, then house and probably a second property to those cunning and willing to master the art of house buying.

This new development is empowering, creating jobs and reducing the ballooning housing list in our local government registers.

It’s been a plus for most low income earners as the previous options were beyond their reach and reduced a number of people to just tenants always at the mercy of landlords.

Quality
It is unfortunate the quality of houses being built leaves a lot to be desired.

Financial institutions need to safeguard interests of their clients by engaging competent contractors to undertake these projects.

A house is a permanent structure and its crumbling down in the first years of it being built is scandalous to say the least.

Raw materials of great quality should be used to guarantee the life span of the dwellings in question.

The need to follow procedures like plans, avoiding wet lands, observing minimum standards lessen future headaches that might arise either from authority or from natural occurrences.

Cost of houses
The cost of housing is such that it is kind of beyond the intended beneficiary.

It is in the best interest of all stakeholders to make these houses much affordable without compromising quality.

My other area of concern is the square metres that the low housing schemes run on. There is need to relook the space they are sitting on and mix up with high rise developments to manage space.

Low cost housing is a money spinner but the neglect from local authorities and developers is glaringly evident from shoddy service to under development of vital amenities.

Be wary at times low cost housing might not be what the doctor ordered to would-be beneficiaries in terms of cost.

Do the maths and get a great deal.

Tenure of loans
The tenure of 25 years is not ideal, the beneficiaries should strive to settle their loans within 10 years (for instance) to qualify for a second mortgage.

Where two incomes are combined reduce the tenure and go for a second or third mortgage.

Remember this is about generational wealth not us.

Of what use is a house to a man if in his lifetime he won’t own it?

Capital Intensive
The deeper the pockets the likelihood of a good project on low cost housing.

The requirements of housing projects is not for small boys thus a well funded development project gives value to would be beneficiaries .

Timing is crucial in these projects so that beneficiaries enjoy maximum utility to their homes.

Sewer reticulation, provision of water and serviced roads are minimum requirements but are huge investments and need expertise in the field to avoid delays in project implementation.

Funding options
On paper, it looks cheaper but when you factor in all other charges the housing funding options are still pricey.

Get the best funding options whether it is for personal acquisition or large scale development?

Economies of scale should be explored otherwise if it is not possible let it go to avoid a shoddy service.

Intended beneficiary
The intended beneficiary needs micro insurance as well for his repayments to be very competitive.

In addition, a life policy to cover death.

In future, we believe all intended beneficiaries need to undergo a financial literacy course to really understand what they are getting themselves into and all options they have on this long-term loan they are getting themselves into.

Multiple home owners
Whatever market you are in, the point is to own at least two houses within the 15-year period.

You got to have a lot of structured deals like mortgaging one house after the other to achieve total financial freedom.

This is so because owning one house in that period is not considered a good investment.

Space
Most low cost houses are built on what I have termed limited space. It gives a squashed feel.

Surely, the war was about land, and for us to be still doing 200 square metres of housing does not look and feel great.

We need standards to revise the minimum building space areas. If it is a matter of space there are many methods of mitigating that challenge without compromising on space.

It is sad when we look at the low income bracket and the neglect is just unbelievable as even                                                                                                           after construction the service provision is not that great.

The irony is that the low income housing projects are a massive earner for developers and local Government but get lesser attention than their eastern (low density) areas.

Here am I thinking that you always take care of your cash cows.

Property development
The money is in property development approach as opposed to selling stands.

It makes more economic sense in the long run otherwise you will continue to parcel out land without nothing to show off for it.

Given land is no longer an infinitely looking resource.

Case in point is City of Bulawayo, they invested a lot on infrastructure development and they are now smiling all the way to the bank.

You have to be smart about it because with developed infrastructure you can leverage and do a lot of financial engineering as well.

Before we all get that house on the hill overlooking the valley, we need to start somewhere. Before we get that multi-million dollar housing project, we need to start somewhere.

We all start small to hone our skills and performance in the low housing sector. We have learnt to acquire houses and what we now need is to look after these houses to preserve value from one generation to the next.

IF YOU LIVE IN BYO PLEASE CONSERVE WATER
IF YOU LIVE IN ZIMBABWE PLEASE USE ELECTRICITY SPARINGLY: SOS (SWITCH OFF SWITCHES)
IF YOU LIVE ON PLANET EARTH PLEASE PRESERVE THE ENVIRONMENT

Morris Mpala is the managing director of MoB Capital Limited, a Bulawayo headquartered micro-finance institution with footprint across the  country.