Mansion in the village
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.
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