UGANDA, Lira | Real Muloodi News | In Part 2 of this series, we shared the challenges that Mr Michael Chris Adonyo, a young 26-year-old average income earner, overcame building his three-bedroomed, self-contained home for his young family in Lira.
With the structure complete, his family moved in while undertaking the finishings. In hindsight, Michael says this was a big mistake.
The Finishings
Michael says, “We moved in to save the USh150,000 per month that we were spending on rent. But it was the worst decision we ever made, we regretted it.”
He explains, “Staying in an incomplete house is actually very hard. We were without glass in the windows so it was cold at night, and we have a baby and a young child. Our floor was literally dirt with grown grass, so we moved around the house with shoes on. There was dirt and dust everywhere, all the time.”
“On top of that, we lost most of our household property because as the workers would come to do the finishing, they would move things around from one room to another and along the way, the property disappeared. The workers would pick our cups and use them for plastering the walls. We had to buy everything anew because we lost almost everything,” he laments.
There were other hardships they had to endure. Michael had contacted National Water, but they had yet to connect water to his land. Therefore, he had to purchase water every day, at an additional cost.
Michael’s other mistake was to construct his house with no toilets in place. This was not only inconvenient, it was an expensive oversight. He made an arrangement with his neighbour to use their toilet at the rate of USh 500 each time. He paid this fee not only for his family, but for all the workmen on the site daily. The cost added up quickly.
Plumbing and Tile Installations
Michael says his plumbing work was also expensive. He installed the kitchen sinks, two flush toilets, and a shower. The finishings of the executive toilet and kids’ toilet cost USh 450,000. For the bathroom, Michael bought 10 boxes of bathroom tiles, each going for USh 30,000.
In July 2021, Michael plastered the walls, did white cementing plus an undercoat. For the flooring, he laid the murram and on top added the concrete, then did the tiling of the floors. Each box of tiles of 40*40 cost USh 47,000.
Security
Security was another cost Michael had not planned for. He noticed that people were using his land as a thoroughfare during construction. Therefore, he erected a fence around his plot for security.
“We put up a chain link temporary fence and planted some flowers, so people couldn’t trespass,” Michael explains.
Taking Loans to Complete Construction
When Michael was desperate for money at the roofing stage of construction, he began researching loans on the internet. He learned about the Centenary Bank Home Improvement Loan, which offers attractive interest rates for home owners wishing to finance the construction or renovation of their homes. These loans had much lower interest rates compared to business or personal loans, so he approached the bank.
Unfortunately, Michael met resistance from the loan officers. He explains, “The loan officers were not open with the details about the home improvement loan, they told me that they didn’t have such loans, even though I had seen it advertised on their website. Instead they tried to sell me loans with higher interest rates.”
So Michael went away and contacted the bank via the website, and ended up emailing the bank manager, who confirmed he could in fact get a home improvement loan.
“I had to go through somebody higher to access that type of loan, and they instructed the loan officers to give it to me,” he says.
“I got small loans which I would pay before six months. Because I am self-employed, there is no stable income, so I can’t get lump sum of money at once. When I take a USh 4 million loan, they break it down so I can pay it every month. I would give in my incomplete house or land title as loan security. The better the house in value, the bigger the loans I would get. It was also scary that if I didn’t pay the loan, they would take our house,” says Michael.
“To finish the roof, I got USh 7 million in home improvement loans, to be paid back in 9 months. In total, I paid back USh 7.6 million. The interest rate was less than 10%, and I could decide to pay after a year or less, he explains”
By diligently paying back the loans, he has now built a credit history with the bank. Therefore, obtaining loans in the future will be easier for further additions to his home, or for future investment in properties.
Celebrating His Success
Michael purchased his land at 23 years old, and completed the construction of the home for his young family in less than 3 years, before his 27th birthday.
Michael’s Advice to the Youth
Michael shared his story with Real Muloodi News to help his fellow youth.
He says, “If you dream of one day owning your own home, you should not wait, make it happen now.”
Michael’s greatest motivation was his children. “I didn’t want my children to go through the same life I went through where there was no school fees because my dad had to pay rent. So as a young parent, because I’m only 26, I knew I had to do this before school starts. If you want the best for yourself, plan for your home now, not later,” he says.
Michael adds, “The youth should not forget that anything is possible, as long as they are devoted.”
Avoid Spending and Learn the Discipline of Saving
Michael advises youth to stop wasting money on items that will lose value later. He says you can buy land and build a house if you are committed and have learnt the art of saving. If you are struggling to save, look into options like a ROSCA, as he did.
“I use the same phone I’ve been using for the last two years. I’m not the type of person who would buy the latest phone, a new watch or new clothes. I spend less. The youth think this is impossible, but practically it can be done. Instead of spending on phones and other things, save your money to buy land. If you already have land, then deposit money for construction materials at a hardware store for the construction of your house. I’d rather invest in my children,” he says.
Land Investment is Important
Michael advises the youth to invest in land since it has no depreciation factor.
He says, “Once you buy land today, the next day it has increased by a percentage. By the time we bought this place, it was so remote and didn’t know that it would later become a city. Now we have people coming and some are building next to us. So, land is an investment that doesn’t depreciate.”
Don’t Listen to Outsiders
Michael says, “Many people came to me and told me that I should have constructed rentals instead of my family home. But having a home is also important. Once you have a home, you don’t have to worry about rent.”
He says “Now, that I have my home, I am going to buy land and invest in rentals. Constructing my home has taught me what I am supposed to do when constructing the rentals, since I won’t make the same mistakes I made before.”
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Part 1: How a Young 26 yr old Average Income Earner Built a USh64m 3-Bedroomed House