Tag: Zambia house plans

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Build a Servants Quarter Before Your Dream Home as Your First Home in Zambia

Start Small, Dream Big Later

The dream of owning a home in Zambia is a powerful one. Visions of a beautiful, custom-built house often dance in the minds of first-time builders. I have seen several people chase this dream and fail or give up. While ambition is admirable, practical considerations should guide your initial steps. Building your “dream home” as your very first project can be a risky endeavor, often leading to unexpected costs, delays, and frustrations.

The First Build is always a Learning Curve

Construction, even on a modest scale, is a complex process. It involves navigating permits, sourcing materials, managing contractors, and understanding local building codes. Your first project will inevitably be a learning experience, filled with valuable lessons that you simply can’t learn from books or online resources.

Why risk your dream home on a process where mistakes are almost guaranteed?

I believe building a smaller, simpler home is the best way to go. A long time ago (apologies to people born in the 60’s-70’s), government houses would have a main house and a servants quarters. These servants quarters would be 3 roomed houses (Not bedrooms) with a toilet/shower attached outside. No tiles, ceiling just basic finishes. Okay so maybe they were a bit too basic but here’s why you should start with a smaller project. Building a small first project allows you to do 4 things:

  1. Minimize Financial Risk: Construction costs can quickly spiral out of control, especially when unforeseen issues arise. Starting with a smaller and simpler project limits your financial exposure and allows you to gain experience without jeopardizing your entire savings.  
  2. Gain Practical Knowledge: You’ll learn firsthand about budgeting, material selection, contractor management, and quality control. This experience will be invaluable when you’re ready to tackle your dream home.
  3. Avoid Costly Mistakes: Mistakes are inevitable during any construction project. By starting small, you can make those mistakes on a smaller scale, minimizing their impact on your finances and your overall satisfaction.
  4. Secure a Place to Call Home: Building a smaller, functional home provides you with a comfortable and secure place to live while you plan and save for your dream project.

The ideal first step is a simple, functional home.

Instead of jumping into a complex, expensive project like building your dream house or multiple flats, consider building a smaller, simpler home to start. A one or two bedroom (maximum) house with basic amenities can provide a comfortable living space while you gain experience and save for your dream home. Of course, this means when you buy a plot, buy as big as possible.

This approach offers several advantages:

  1. Lower construction costs.
  2. Faster construction time.
  3. Reduced stress and risk.
  4. Valuable learning experience. You will now practice what you learned on your main house.
  5. You get to monitor progress of your main house/dream house at close range since you will probably already live on the property and have acclimatized to living in the new area.

By starting small, you’ll be better prepared to build your dream home with confidence and avoid the pitfalls that often plague first-time builders. Your first home should be a stepping stone, not a financial and emotional burden. With careful planning and a realistic approach, you can turn your dream of homeownership into a reality, one step at a time.

What do you think about building yourself a small servants quarter first? post your comment below.

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Is Building a Block of Flats on Your 20×30 Plot Profitable?

Couple smiling at each other

Disclaimer: This information is for general knowledge and guidance only. It does not constitute financial or investment advice.

Should you just build for the sake of it? When it comes to investing in rental properties, we all want to make money but the question is: Is building a block of flats on a 20×30 plot profitable?. There are several ways to determine this. In this short article we are going to examine one way of determining whether you are getting a good return on your investment. This is called Capitalization Rate or Cap Rate. Let’s use an example of a block of flats in Chalala, Lusaka. Grab a pen and paper.

STEP 1. Calculate your Projected Annual Rental Income (ARI)

Determine Monthly Rent (R):

  • Research comparable rentals in the area to set a competitive market rate. Be realistic.
  • Consider factors like size, amenities (e.g., parking, appliances), and property condition.
  • Rent in Chalala 2 by 2 bedroom house R = 5,500 x 2 = 11,000 per month

Calculate Annual Income (ARI):

  • Multiply monthly rent by 12 months.
  • Account for potential vacancy periods (e.g., between tenants). 
  • ARI= 11,000*12= K132,000

STEP 2. Determine Annual Operating Expenses (AOE)

Add up all the annual operating expenses you expect for example:

  • Mortgage Payments: Include principal and interest.
  • Property Taxes: Give to Caesar what belongs to Caesar. Caesar is Zambia Revenue Authority, Ministry of Lands etc.
  • Insurance: Many people in Zambia don’t take this seriously but please insure your house.
  • Utilities: (If you pay any)
  • Maintenance and Repairs: (Estimate for routine and unexpected costs)
  • Property Management Fees: (If applicable)
  • Vacancy Costs: (Estimate potential lost income during vacant periods)
  • Total Annual Operating Expenses AOE= K90,000 (just an example factoring in all the above, K7,500/month )

STEP 3. Calculate Net Operating Income (NOI)

Formula: NOI = ARI – AOE

NOI = Annual Rental Income – Annual Operating Expenses

= 132,000 – 90,000

Net Operating Income -NOI = K42,000

STEP 4. Calculate Return on Investment (ROI) 

Capitalization Rate (Cap Rate):

  • Focus: Property’s purchase/construction price. Let’s assume you bought the flats at K1,000,000
  • Formula: (NOI / Purchase Price) x 100
  • Our Cap Rate = 42,000/1,000,000= 4.2%

A Higher Cap Rate: Generally indicates higher potential return. However, it can also signal higher risk. Example: A higher cap rate might suggest a lower property value or higher vacancy rates. If our house in Chalala was 500,000 the cap rate would have been 8.4%.

Lower Cap Rate: May suggest a more stable and less risky investment, but with lower potential returns. Example: A lower cap rate could indicate a more desirable location or higher property value.

IMPORTANT: ANALYZE AND COMPARE

  • Compare your calculated ROI with other investment options.
  • Consider your risk tolerance and investment goals.
  • Accurate Estimates: Use realistic figures for all income and expenses.
  • Have a long-Term View: ROI can fluctuate over time. Consider long-term appreciation potential.
  • Market Conditions: Research local rental markets for trends and potential challenges. Sometimes the project can yield better results in a different town.
  • Professional Guidance: Consult with a real estate professional or financial advisor for personalized advice. Seek professional advice from a financial advisor or real estate investor. The above are just my opinion.

Even if your property does not yield good results after this calculation, there are still other ways you can gain a benefit. We will discuss this in another article. I hope this gave you a better understanding.

Post your comments below.

#buildinginzambia #buyinglandinzambia

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Nyumba Yatu Group

Nyumba Yatu WhatsApp Group

Get ready to be part of a groundbreaking project! We’ll be working together with you to design a house through the interactive platform of WhatsApp.

You’ll have a say in every step, from deciding the number of bedrooms to selecting the architect, deciding what paint color, finalizing the material schedule and construction cost of the plan. This is your chance to be directly involved in shaping a dream home that reflects your needs and preferences and will also be good practice for both first timers and people who have done it before. Sign up to join the WhatsApp group on this link JOIN NYUMBA YATU

See you in the group chat.

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Seizing the Opportunity: Buying Foreclosed and Repossessed Properties in Zambia

In our inaugural issue of the Builders Blueprint, we talked about buying land from the councils as an affordable option available to everyone. The Zambian real estate market presents a unique opportunity for both local and international investors. Today, let’s talk about the acquisition of foreclosed and repossessed properties by banks and financial institutions. 

This often happens when someone borrows money to buy a property or borrows it for other purposes but puts the house as collateral. When they fail to pay back, the bank takes back the property. This leaves the bank with excess stock of properties. Banks are not in the real estate business, they are in the money business. 

There is a growing number of properties being foreclosed as evidenced in the local newspapers and bank websites. This offers a chance to acquire land and houses at potentially significant discounts. Let’s analyze this opportunity.

The Benefits of Buying Foreclosed Properties

  1. Affordability: Foreclosed and repossessed properties are often sold at a substantial discount compared to market rates. This is because the bank would rather get rid of the property and use the cash for other investments. They set a minimum sale value however, in some cases it might be possible to go lower if the conditions are in your favour.
  2. Investment Potential: As the Zambian economy continues to grow, real estate investments can yield significant returns. 
  3. Diverse Property Options: Foreclosed properties range from residential homes to commercial properties, offering a variety of investment opportunities. Sometimes foreclosed homes are in very good locations which can yield great returns when repurposed.
  4. Legit Business: the process of lending money or offering a mortgage by banks and financial institutions requires them to carry out background checks and check legitimacy of the property. Therefore, foreclosed properties are already vetted by the bank to be legitimate. This is half of our work done for us by others for free.

Potential Challenges

  1. Legal Complexity: Navigating the legal process of acquiring foreclosed property can become complex and time-consuming. It’s always advisable to consult with a local real estate lawyer to ensure a smooth transaction.
  2. Property Condition: Foreclosed properties may require significant repairs and renovations.The properties can range from new to very old. It’s important to exercise due diligence before making the bank an offer.
  3. Market Fluctuations: Real estate markets can be volatile, and economic factors can influence property values. Sometimes properties may be marked up due to market fluctuations or the bank attempting to recover their moneys.

The Diaspora Advantage

Zambians in the diaspora and foreign investors are uniquely positioned to capitalize on this opportunity. With a global perspective and access to international financial markets, they can leverage their knowledge and resources to identify lucrative deals. Additionally, diaspora investors can often secure financing from international institutions, providing them with a competitive edge.

Key Considerations for Potential Buyers

  • Thorough Due Diligence: Conduct a comprehensive property inspection to assess its condition and potential value.
  • Consult Local Experts: Seek advice from local real estate agents, lawyers, and property managers to navigate the intricacies of the Zambian market.
  • Secure Financing: Explore financing options from local and international lenders.
  • Consider Long-Term Plans: Determine your investment goals and whether you plan to rent, sell, or develop the property.

By carefully considering these factors and taking advantage of the opportunities presented by the foreclosed property market, individuals and investors can make sound real estate decisions in Zambia. WOULD YOU FEEL GUILTY BUYING A PROPERTY THAT WAS FORECLOSED?

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Frequently Asked Questions (FAQ’s)

General Design and Planning

  1. Do you offer house plans?

No, but we can recommend trusted and qualified architects to offer architectural services to you that are adapted to the Zambian market and conform to building regulations. Sign up for the Builders Blueprint newsletter to receive notification when ready made house plans will be available for download.  

  1. What type of house plans can I get?

It’s up to you and your vision. Single-storey, double-storey, modern or traditional designs.  

  1. Can you customize existing plans to fit my needs? Yes, we can customize existing plans to suit your specific requirements. This might involve adding or removing rooms, changing dimensions, or modifying the layout. You may provide the house plan or idea of the house plan you want to the Architect.
  1. How do I choose the right house plan for my budget and lifestyle? Consider factors like your family size, budget, and desired lifestyle. Are you building for yourself or for rent? You can also consult with our team for personalized advice.
  1. What factors should I consider when designing a house in Zambia? Key factors include climate, local building materials, building regulations and purpose of the house. 
  1. Do you offer consultations with architects or designers? Yes, our network of architects and designers are vetted and then recommended. Our team is available to answer your questions and provide guidance.

Getting Help

  1. What is the best way to stay in touch & learn? We have several options available click the corresponding links below:

Cost and Construction

  1. What is the typical cost of building a house in Zambia? The cost of building a house can vary significantly depending on factors such as size, materials, location, and labor costs. The cost can be determined by a quantity surveyor after a house plan is finalized by an architect.
  1. How do I find a reputable contractor in Zambia? We recommend seeking recommendations from friends, family, or other trusted sources. We have a network of trusted vendors that you can access. Get in touch for a referral.
  1. What do I need to start building in Zambia? To obtain a building permit you need to have your house plan scrutinized by the local authority and/or the local planning authority. Your house plan should be designed by a registered architect.  Fees for scrutiny vary by location. Consult your local authority on prices.
  1. Do you offer any construction services in addition to house plans? Yes, our network of reputable contractors and craftsmen are vetted then recommended. Our team is available to answer your questions and provide guidance.

Local Considerations

  1. Are your house plans designed for the Zambian climate? Yes, our plans are designed to be suitable for the Zambian climate, considering factors like heat, humidity, and rainfall.
  1. What are the common building materials used in Zambia? Common building materials in Zambia include concrete blocks, bricks, timber, and thatch. Consider factors like durability, cost, and local availability.
  1. Do your plans comply with Zambian building codes and regulations? Yes, because we only recommend registered architects whose plans are designed to comply with local building codes and regulations.

4. Can you recommend any resources for finding local builders and materials suppliers? You are already in the right place. Our newsletter is a good source as we will periodically highlight our best vendors. Additionally, conduct thorough research and get references.