PROPERTY MANAGEMENT, WHAT YOU CAN LEARN FROM EXPERIENCED HANDS.
Property management is an administrative science that requires due diligence. Nyumbani Estate Managers has niche experience in handling lower spectrum of the market. Having worked with various landlords in the residential business to improve the quality of their portfolio. The lower rent spectrum of the market in the residential business for Kampala and her neighboring hamlets caps at three hundred and fifty thousand shillings per month. This is too high given the average monthly salary just raised to four hundred thousand after taxes according to the bureau of statistics. Meaning in some households 51% of the revenue will be committed to payment of the housing obligations. According to those people who know these things of financial literacy, housing should cover at most 20% of household income. That partly explains why defaults are so common in the tenant market. Construction of three units of a single bedroom, sitting room, self-contained apartments will be a bill of quantities in the range of forty million without consideration of the land prices. Monthly rent can top nine hundred thousand shillings. Give or take, you will spend two hundred thousand on general maintenance. An annual return of eight million and four hundred thousand shillings before taxes. Given the value of the land keeps constant or appreciating, the returns on concrete investment will make a five year window. The resale value though depending on the location, will make the property good business. This makes investment in property for rent a very good and safe return on money spent.
According to section five, of the income tax act which accounts for properties whose net revenue exceeds two million eight hundred thousand shillings annually, annual gross rent which in this case is ten million eight hundred thousand at optimum tenancy, twenty percent is deducted for costs in this case two million one hundred thousand shillings. Money liable for taxation is eight million seven hundred thousand shillings. Twenty percent is what you give to Ceaser. In this scenario your annual tax returns will hit a ceiling of one million seven hundred and forty thousand shillings only. Total net revenue also considered as profit annually will be a neat six million nine hundred and sixty thousand shillings only. The tax man and property managers are still soul searching to have a mutual understanding. This taxation ignores local area tax that has been implemented by some municipalities. In the same vein is blind to charges levied on surplus activities that are deemed necessary for the community benefit like garbage charge.
Tenancy at will, is a scenario where a tenant only occupies premises with no support documentation from the landlord. This is common in Uganda where the only exchange is usually cash. This usually leads to queries mainly in audit and representation. A tenant has a right to tenancy as stipulated legally to define the working boundaries of the relationship. This is also important to the authorities in stock taking. Value addition, property managers are adept to market values. In an unregulated market like Uganda, you could easily be getting a raw deal on your property. That will be narrowed down by the market managers. In the same breathe, they do guarantee constant income which can be used as a financial statement in other businesses. You can also use your property managers in acquisition of other property, their market experience will be put in advisement to ensure you avoid toxic assets and white elephants. Even in disposal, you will have a great hand moving forward. Zoning and planning, your real estate managers, should be representative of your interests in the planning bodies. As regards to municipal, town and city councils, the property managers should be able to lobby for service procurement. Since they represent various interests, they have a unifying voice in the business. This is critical in garbage disposal, accessibility, waste management, utilities. Road reserve which is undermined by many land owners and users.
If you are a landlord, tenant who thinks you will need our service please don’t hesitate to contact us at firstname.lastname@example.org or call 0700814932 to can guide you through the thorny business of property management.