UGANDA, Kampala | Real Muloodi News | The real estate sector in Uganda continues to grow, buoyed by the expanding population. Every day, people strive to live a better quality of life, looking for a comfortable place to call home. Many people have gained from constructing rentals and have improved their standards of living.
Currently, there is a housing deficit of 2.1 million units, and this figure grows by over 200,000 units per year. Therefore, the demand for affordable rentals is high.
Factors to Consider When Constructing Rentals
If you want to attract quality tenants and earn maximum rental income, there are several things to consider when constructing rentals:
The Beauty of the House
If a rental house looks good in and outside, it will attract more people. Ugandans love eye-catching buildings not only for themselves but for their guests as well.
Prominent business tycoon and real estate muloodi, Hamis Kiggundu, said during a Real Muloodi News interview, “A bag of cement in a beautiful house costs the same as a bag of cement in an ugly house – go ahead and build the beautiful house, it costs you the same amount of money, and it pays.”
Security
Most rentals in Uganda have fences with a security guard at the gate. Gated rentals offer security to the tenants, and it adds value to your rentals. Therefore, construct rentals and fence them to earn big from them.
Location
Rentals that offer easy access to town and the workplaces of tenants are in high demand. Construct rentals in areas with easy access to services such as transport, the local market, water, and electricity, and they will always be occupied.
Space
It is best to construct rentals in an area with ample parking space, and where the tenants can move freely with no inconvenience.
Size of the Rentals
The rentals can be of different sizes since they accommodate the diverse needs of tenants.
Tenants with families prefer rentals with a lot of space, and they need privacy as well. On the other hand, single tenants might not require as much space.
Ddungu Sserwadda, a real estate agent, says before constructing rentals, study the developments around the neighbourhood.
What is the predominant type of development in the area? Is it residential or mixed development, single-storey or multi-storeyed? Stand-alone houses, or apartments? All these discoveries will help you get an idea of what you could include in your development.
To get a clear view of what to expect when the houses are ready, you should also learn about the people’s economic standing in the area.
Types of Rentals Built in Uganda
There are different types of rentals that you can construct in Uganda. It all depends on the amount of money you have and the size of land that is available, as discussed below:
Villa Houses
A villa was originally an ancient Roman upper-class country house; the luxurious abodes of Roman noblemen. Today, a villa in Uganda refers to a private, luxury residence within a housing project. Though a villa is an individual unit of residence, the floor plan is often fixed as per the project plan.
Villa houses define leisure, luxury and comfort and are typically extravagant. The managing director of Green Top Villas and Condos, Andebirhan Hanna, explains a villa is a private, spacious house. A villa has luxurious features including tarmacked roads, a gym, shopping store, sauna, steam bath and swimming pool.
Sometimes villa houses may be in a neighbourhood with one common gate or separate gates and parking lots.
David Wanangwe, an architect and head of section technical operations, National Housing & Construction Company explains that a villa is larger and usually has domestic quarters attached to it.
“There is always a fully furnished room secluded from the main quarters and, depending on what a family wants, they can use the room for whatever purpose they deem fit,” Andebirhan explains.
People with high income primarily rent villa houses out. Their rent cost ranges around USh 800,000 upwards.
Bungalows
Bungalows are defined as single dwelling residential houses that have only one level; ground floor. Wanangwe says bungalows are probably the most common houses everyone constructs. They range from three bedrooms or more, depending on the floor plan of the architect.
He explains that a bungalow is a detached house. “It can either be three-bedroomed or more but it stands on its own and is usually on a smaller plot.”
Usually, bungalows are smaller with limited space and are on a small scale piece of land, mainly for homes.
However, building depends on how much income or family an individual has and one’s structural desires, Wanangwe says.
Ordinarily, middle-income earners, companies, and NGOs rent most of the bungalow rentals in Uganda.
Row Houses
Typically row houses are two-level semidetached units in which each unit shares a similar design. Row houses have a high desirability factor by buyers because of their similarity to apartments.
Abdallah Kiweewa, a civil engineer and director of Kayhad Contractors Limited, compared to others, row houses are more affordable.
“They are residential houses that can accommodate more than four different families in a block,” Kiweewa says.
Apartments
Apartments, otherwise known as ‘flats’, are individual residences found in a building, hence ‘apartment block’. They are very similar to condominiums in nature, however the main thing that distinguishes an apartment from a condominium is the ownership. With an apartment block, all the dwellings are typically owned by a corporation, or single entity, which rents them out to tenants. Whereas in a condominium block, the dwellings are owned by different individuals, who either may occupy them or rent them out.
According to Andebirhan, in apartments, tenants share facilities such as a utility lounge, the compound, a children’s play area, garbage and security costs, plus maintenance.
Mostly, high earners rent apartments, and they are common in urban areas. Currently, apartments are in high demand, especially for singles and young couples who have no or a few children.
Condos
A condo is a building with two or more storeys, but each floor has two or more complete homes, each with a separate owner.
Condo owners have equal access to the building’s common areas or facilities, including hallways, elevators, and a parking lot.
Andebirhan explains that they give out a condo title, and once the person agrees to the conditions, they can then stay on the property since each house has a exclusive owner and a property title.
“Many families are living together in the same area, but everyone owns their space, yet there are other utilities they share,” Kiweewa explains.
The owners team up to form a body corporate, otherwise known as an owners corporation. The owners pay fees into a central fund for repairs and maintenance on common property, but are soley responsible for their own dwelling, however owners must abide by rules set by the body corporate known as by-laws.
Challenges Faced When Constructing Rentals in Uganda
Overly expensive building materials on the market in Uganda are a big challenge.
When Adam Mugisha, a Katale resident on Entebbe Road, finally got a well-paying job, the first thing he did was get a bank loan to invest in the housing sector.
“I planned to build four rental units in my plot. But it did not take long for me to learn that I would not afford the cost of building the four semi-detached units. So I built a miniature bungalow at the edge of the plot, leaving room for the rest of the units, for when I could afford to construct them. I think most people end up building a stand-alone rental house because of cost,” Mugisha says.
Grey Oak construction say a lack of skilled labour is also a big problem in Uganda. There are many Ugandans seeking jobs, so finding people to work with is not difficult. The challenge though is that most of these people can only provide unskilled labour.
Sometimes the contractor will be forced to hire skilled labour from outside countries, which costs them heavily as these people demand high salary wages. This obviously has a negative impact on the cost of the project. Alternatively, having few skilled builders on site increases the construction time and likewise increases costs.
Advantages of Building Rentals in Uganda
Building rentals is a form of employment to the owner of the house, which increases the living standards. Rentals also contribute to wealth accumulation by acting as collateral when borrowing money for other investments.
Rentals are a lifetime investment. You can keep them throughout generations and still earn from them after retirement.
The rental business is flexible, and it gives you ample time to concentrate on other businesses while still managing it.
Victoria Nannozi, the chief executive officer Association at Real Estate Agents (AREA), says all houses can earn you money depending on the location.
“It all comes down to research. It is important to understand who your target market is and the location of your houses,” Nannozi says.
It is essential to understand your target market. Single self-contained rooms and studio apartments, for example, are profitable when built around a university, targeting the young population.
University students or the young working population in Uganda, earning between USh 500,000 and USh 1.5 million, can afford a house ranging between USh 250,000 and USh 700,000 for double rooms.
While double and single rooms are lucrative in Kampala, three-bedroom houses are the most desired in the outskirts of Kampala.
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