The Darproperty

The

October 2018

Featuring Properties from Tanzania & Kenya

www.darproperty.net

East Africa’s Ultimate Property Guide

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Issue No 65 | ISSN 1821-7753

See Page 24-25 For Details

The Darproperty - October 2018| 1 The Darproperty - August 2015 | 1

SEEKING LEGAL ADVICE BEFORE PURCHASING PROPERTY

F

our days prior to closing the deal, Mr. Dotto and his wife received with astonishment a letter from the seller’s real estate broker, saying that they needed to instantly pay 18m/- in property tax arrears.

The letter stated that the seller had paid the property tax arrears for the past years, and therefore the Dottos needed to reimburse the seller before the purchase and sale agreement could be signed and the house keys handed over. It was a very nerve-racking moment, coming on the verge of completing the sale.

However, Mr. Dotto’s sister-in-law, who works as a personal assistant at a city law firm, visited the municipal council and found out that the seller in fact owed the council 9m/in unpaid property taxes, which meant the Dottos did not really owe them any money.

10 | The Darproperty - October 2018

The couple’s lawyer drafted a letter requiring the seller to pay the property tax arrears immediately and send proof of payment. The seller complied and the sale went through!

But if Mr. Dotto was a novice in real estate business and didn’t have a lawyer, he might have accepted the letter without questioning it and paid the money to close the deal.

Frequently, Tanzanian real estate buyers don’t contact a lawyer until a deal is completed. They sign the purchase agreement, and then take it to a lawyer who conducts an official title search, registers the title deed and handles the transfer of funds.

They know they need a lawyer to help

with this; however, not many of them want to spend money on legal fees. As it turns out, retaining the right lawyer, early in the real estate buying process, can actually save you time, risk and most crucially, your hardearned money.

According to a real estate expert, your lawyer is not an expense you should hold back on and he considers a lawyer to be an essential part of real estate buying and selling. “We think the lawyer is the person who is the most unbiased in the transaction,” he says.

According to a legal practitioner in Dar es salaam, buying a house is one of the largest financial transactions a Tanzanian makes, and it pays to ensure it is done right and that all of a buyer or seller’s legal rights and

protections are adhered to.

He states that getting a lawyer to review the paperwork ahead of time can make a huge difference. A lawyer can also protect your interests when it comes to financing, he adds.

“I would put down in a purchase agreement that I want the offer conditional on the buyer getting the financing he wants as opposed to just, ‘conditional on financing,’ he explains, adding that, “For instance, if the bank offers a mortgage rate of 20 per cent as opposed to 15 per cent, you might want the ability to opt out of the deal to avoid getting stuck in a situation where financing is imposed upon you.”

A lawyer is particularly important when it comes to purchasing a property that has not yet been built. House buyers will need a lawyer’s help to decipher the purchase and sale agreement.

Particularly in large urban areas like Dar es Salaam, Arusha and Mwanza, a softening market has prompted many developers to

offer sales incentives.

However, those incentives might look quite a bit different from house buyers expect once they are written into a legal document. For example, “some developers promise to give you one or two years free of maintenance,” He says.

“In agreements that we have reviewed, it doesn’t mean you’ll get two years of free maintenance, it actually means there will be a rebate against the purchase price equal to what the developer thinks the first two years of maintenance will be.

You have to look at those types of details.”

House buyers can get another unpleasant surprise when their final purchase price ends up much higher than originally thought.

Developers might sell you an apartment for $350,000, for instance, but that doesn’t include the many added charges that can be added on, like warranty protection against structural defects; water meter installation, property taxes, landscaping charges, and so on.

This can add thousands of dollars to a house purchase. “If it goes to a good lawyer first, they would say, ‘Let’s put a cap on the closing costs,’ because you want to know what you’re going to pay,” explains a legal expert .

He suggests your lawyer should spend a good amount of their time on real estate deals, and should give you a written quote including disbursements and incidentals.

In most large urban regions of our country, purchasers will usually pay more than sellers given their lawyers will have to carry out more work.

When it comes to price, a financial expert says “you aren’t necessarily doing yourself any favours by choosing the lawyer with the lowest fees”.

A race to the bottom, when it’s a complicated real estate transaction or when the purchaser is buying for the first time, may not be in the purchaser’s interests.

Written by : ORTON KISHWEKO The Darproperty - October 2018| 11 The Darproperty - August 2015 | 11

How Microeconomics Affects Everyday Life

M

icroeconomics is the study of how individuals and businesses make choices on how to best use limited resources. The field interests investors as individual consumer spending accounts for about two-thirds of the economy. Microeconomics and macroeconomics (the study of the larger aggregate economy) together make up the two main branches of economics.

So how do the principles of microeconomics affect everyday life? Most people have a limited amount of time and money. They cannot buy or do everything they want, so they make calculated decisions on how to use limited resources to maximize personal satisfaction. Similarly, a business also has limited time and money. Businesses also make decisions that result in the best outcome for the business, which may be to maximize profit.

16 | The Darproperty - October 2018

Microeconomics Principles Microeconomics uses certain principles to explain how individuals and businesses make decisions. One of the basic principles of microeconomics is that individuals make decisions to maximize their satisfaction. In microeconomics, this is called maximizing utility.

Another economic principle that comes into play as consumers make decisions is opportunity cost. When an individual makes a decision, she also calculates the cost of forgoing the next best alternative. For instance, if you use your frequent flier miles to take a trip to the Bahamas, you will no longer be able to redeem the miles for cash. The missed cash is an opportunity cost.

Diminishing marginal utility, another economic input, describes the general consumer experience that the more you consume of something, the lower the satisfaction you get. For

instance, when you eat one burger you may feel very satisfied. But if you eat a second burger, you may feel a lesser amount of satisfaction than with the first burger.

Two other important economic principles are supply and demand. Market supply refers to the total amount of a certain good or service available on the market to consumers, while market demand refers to the total demand for the good or service.

The interplay of supply and demand helps determine prices for a product or service, with higher demand and limited supply typically making for higher prices.

Renting an Apartment To help understand how microeconomics affects everyday life, let’s study the process of renting an apartment. In a city like Dar es Salaam, there is a limited supply

Continues On Page No 20

of housing and high demand. Going by the principles of microeconomics, that’s why housing costs in Dar es Salaam are high.

To rent an apartment, first you must determine a budget. For this, you will have to take into account your income and how much money you are looking to spend on housing, in such a way as to maximize your utility, or satisfaction. If you allocate too much of your income to rent, you will not have a lot of money left for other expenses.

Thus, you will have to decide what is the most amount of money you are willing to part with, what amenities you must have in your apartment, and acceptable neighbourhoods. It’s about maximizing utility.

Based on all the above factors, you set a budget to get the most satisfaction for the least possible rent. You will not pay more than you have to in order to get what you want. Considering that in this supply-constrained market there are others also interested in renting the apartments that are

20 | The Darproperty - October 2018

more in demand, you might find that you will have to increase your budget. To do this, you will have to cut down on spending in another area, like entertainment, travel, or eating out. That is the opportunity cost of finding the right apartment.

Similarly, a landlord will seek to rent an apartment at the highest price possible, since her motivation generally is to get the best return by renting out the apartment. In setting the rent, she would have to take into account the demand for the apartment and the neighbourhood. If there are enough potential renters interested in the apartment, she would set a higher rent. If she were to set the rent too high, compared to what other landlords in the neighbourhood are charging for comparable apartments, she would find that renters are not interested.

The business owner, in this case the landlord, also makes decisions based on supply and demand.

And while she would attract a larger pool

of prospective renters by setting a rent that is lower than what other neighbourhood landlords are charging for comparable apartments, she would be missing out on some rental income which will not maximize her utility. Thus, both you and the landlord will make decisions to get the best outcome for yourselves given the constraints you face.

The Bottom Line In a capitalist economy, both consumers and businesses make thousands of big and small decisions each year guided by the principles of microeconomics. Consumers seek to maximize their satisfaction when they go out and shop for anything from paper towels to apartments, houses, and cars. Businesses set prices and make other decisions based on microeconomics. The prices that consumers will pay depends on the supply of a good, as well as how much others are willing to pay for it

By Poonkulali Thangavelu

REAL ESTATE The ABCs of REAL ESTATE MARKET Home price index :- a measure of the relative level of prices in a specific housing market at a specific time. Values of the index are pegged to some starting value and indicate change over time rather than an average or median price.

Example: Last year, the home price index for the local market stood at 110. This year, it is at 120, indicating that homes, on average increased in value by 9%.

Flip: Purchase and immediate resale of property (within hours or days) at a quick profit. Often has a negative connotation, attributed to shyster who profit illegally or at the expense of an innocent party. In the early 1980s and the early part of the 2000s land flips provided huge gains to speculators, ultimately causing losses to savings and loan associations. These were often facilitated by exaggerated appraisals.

Flat fee broker: A licensed broker who charges a fixed fee for the provision of brokerage services instead of a commission based on a percentage of the sales price of the property.

Example: Kramden, a flat fee broker, charges $5,000 to arrange the sale of a home, no matter what price is agreed upon by the buyer and seller. If a sale is not consummated within the term of the listing contract no fee is paid.

Panic Selling; Wide spread urgent dumping of property on the market in anticipation of drastic reduction in property value. Most often the impetus of such selling is perceived detrimental in neighbourhood conditions.

Example: When a sex offender moved inth the neighbourhood, an initial wave of panic selling lowered prices by 25%.

Townhouse: A dwelling unit, generally having 2 or more floors and attached to other similar units via party walls. Town houses are often used in planned unit developments and condominium developments, which provide for clustered or attached housing and common open space.

62.8% of Kenyans prefer investment in land & real estate – Survey

F

or several years, Kenya’s real estate sector has been definitely lucrative, attracting both investors and genuine buyers alike. Yet, a noticeable majority of kenyans are overly anxious when dealing with investment in this particular sector.

Reasons for this are well known. The undocumented real estate industry, which witnesses many frauds from developers with almost no property laws protecting the investor from potential scams and the overall unpredictability, makes it a perfect blend to scare anyone away.

However, according to a survey conducted by a local pension administrator, Enwealth Financial Services in partnership with Strathmore University – 62.8 per cent of Kenyans opt for land and real estate when it comes to securing their investments. The report also states that 9.2 per cent of the population prefer investing in financial instruments while 9 per cent prefer investing in an ongoing business.

The survey covered average Kenyans from the top and middle slots of professionals and self-employed people who have savings and are planning to invest for future protection. Land and real estate makes up the largest assets Kenyans invest in across all age cohorts.

30 | The Darproperty - October 2018

“Over the different age units there is a gradual change in the composition of investment assets, with land contributing the larger portion for those under 30 and real estate for those between 31 and 40 years.” said Enwealth CEO Simon Wafubwa while presenting the report to Industry stakeholders.

He said the decision by young people to invest in land and real estate is attributed to the perceived attractive returns, compared to returns from other asset classes like stocks which are viewed to be of high risk.

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Real Estate Agents Directory in Tanzania DAR ES SALAAM

ABLA ESTATE DEVELOPERS & AGENCY CO.LTD Mikocheni Opposite Shoppers Plaza P.O BOX 3810, Dar es Salaam Tel +255 22 2772506 E-mail: ablaestate@bol.co.tz AUSTIN PROPERTIES LIMITED Mwai kibaki rd P.O. Box 19021 DSM +255 715 686 051 anoranthony84@gmail.com CHINESE PROPERTY AGENT TRANSLATOR Msasani Road, Masaki English Chinese Translator Dealing with your chinese client sms 0756 50 11 37 giraffe_007@163.com

GIMCO ESTATE AGENCY LTD Samora Ave, NIC Investment Hse, P.O BOX 8382 Dar es salaam Tel +255 22 2120988 Mob +255-784 900041

NEW DAY PROPERTY AGENCY COMPANY Mwinyijuma Road - Kinondoni, Room no.84, UVCC Complex +255 753 645 434, +255 717 035 552 +255 767 575 758 www.facebook.com/ raymond samson Laizer

43 The DarProperty August 2014

NIKUZE REAL ESTATE AGENCY Morogoro Road P.O Box 10032 Dar Es Salaam Tel: +255 789/754/715/ 363 800 Email: nikuze@nikuze.com www.nikuze.com PHOTO & CO.ESTATE Kahama Road/Msasani peninsula P.O BOX 105121 Dar es Salaam.

0786 962 444 Email; Octavianfocas@yahoo.com.

PROPERTY CONSULTANCY & SERVICES LTD 2nd Floor Kevin House - Samora Avenue P.O BOX.7152 - Dar Es Salaam +255 22 2120402, +255 713 690 220 info@pcsltd.co.tz www.pcsltd.co.tz PRESTIGE PROPERTIES Phone: +255-713-764-447/ 0767471293 Tel:+255-22-266-4373 Email:info@prestigeproperties.co.tz www.prestigeproperties.co.tz

GOLDBERG COMPANY LTD Real Estate & Mining Trade P.O. Box 22159 Dar es Salaam Old Bagamoyo Rd, Mikocheni B, 0715 270 517 / 0754 270 517 goldbergtz@gmail.com www. goldbergtz.com

KEY REAL ESTATE SOLUTIONS Regent Chwaku North Ursino Tel: +255 22 2701674 0715 053 803, 0786 053 803, 0754 28 46 84 mariam@keyrealestatesolutionstz.com www.keyrealestatesolutionstz.com

MY BEACH Old Bagamoyo Rd. opp Yuasa auto impex P.O BOX 105200. Dar es Salaam Tel; +255 22 2701710

TANGANYIKA ESTATE AGENTS Sea Cliff Village (next to Sea Cliff Hotel) Plot 532, Toure Drive +255 742 074 262 info@tzagents.com TRELD COMPANY LTD P.O BOX 7656 Dar es Salaam Location Msasani Peninsular off toure drive +255 732 222 888, +255 716 777 999 treldestates@yahoo.com www.treld.co.tz

ARUSHA AWESOME HOMES AND PROPERTIES.

Shanti House, Plot 58 Block E Sokoine Road P. O. Box 249 Arusha, Tanzania. info@arushahomes.com www.arushahomes.com +255 754 337 899 / +255 786 337 899 HOMES & PROPERTY AGENCIES LTD Land Surveyors & Property Managers P. O.Box 10079 Arusha Boma Rd. Arusha 0787 805566 hopraltd@gmail.com TANGANYIKA ESTATE AGENTS

Shoprite Complex, +255 785 984 467 info@tzagents.com ZIPO HOMES

Rivergardens Business Park, Rm 4 P.O Box 20 Usa River, Arusha +255 787 474 580/+ 255 754 320 513 info@zipohomes.com www.zipohomes.com

MWANZA MWANZAESTATE Mwanzaestate.com +255 714 245 779 kisolimorris@hotmail.com

ZANZIBAR Zanzibar - properties.com Tel: +255 774 44 19 07 Hotel Marine - Malindi Zanzibar

+255 756 960 960, +255 714 444 250, +255 752 444 606.

ARUSHA +255 653 005 530, MWANZA +255 653 005 535, INFO@TZREALESTATE.CO.TZ TZREALESTATE.CO.TZ

ENHANCE YOUR VISIBILTY & CREDIBILITY GET LISTED HERE WITH YOUR LOGO Tshs. 48,500/= Monthly / Tshs. 500,000/= Annually +255 784 23 89 62, 0688 75 18 68 | sales@darproperty.net

LIST YOUR PROPERTY HERE FOR ONLY TSHS 50,000/= VAT EXCL.

CLASSIFIEDS

SALE TSH 55m

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SALE 30,000,000 TZS

Kibada Kigamboni Block 26 Plot 222 631.0 Sqm 0713238111

ND ON I

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RENT $21

SALE 10,000,000 TZS

Apartment , Kinondoni, Dar Es Salaam 280.0 (Sqm), 2 Rooms, 1 Bathrooms 0716 145 025

Office space to let on united nation road, ideal location and quite area with free parking.

20.5 USD per sqm inclusive of service charge 0763 382 231

Buyuni ilala block 27 Plot number 103 0713238111

Plot for sale in Masaki Off-Mwaya road Price: USD 1.5m negotiable Plot size: 1,777sq.m Call: 0658696840

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SALE TZS. 23,000 @SQM On the way to Ndoto Polepole farm, beautiful serene 30 by 30 square meter plots, 3 plots available for sale +255 786 011 755 or 763 011 755

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Salasala. 3,100m2 +255 768 633 087 / +255 782 499 993

SALE TSHS 800m Big compound with big go-down capable of up to 20 containers, 3 phase electricity, DAWASCO connection, 2 bedroom house fully kitchen, dinning room and 4 bedroom servant quarter 0688 210 891/ 0758 210 891

OD YO

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PRICE - NEGOTIABLE OFFICE SPACE FOR RENT AT SEAVIEW, UPANGA A executive commercial development offers 2 floors of prime office space suitable for housing an organization seeking to have all its offices under one roof.

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Fully furnished apartments for rent in Goba, Studio (usd 400) one bedroom (Usd 500), 2 bedroom (usd 1000) Call: 0658696840

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Housing Estate for Sale - 8520 SQM 10mins walk from the main road 0752 595353 / 0784 036518

Sale 30,000,000 TZS Plot For Sale, Kigamboni, Dar Es Salaam 2km from Kigamboni bridge 5km from ferry 0784238962

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Darproperty Tanzania Editor In Chief

Larson Chumi

editor@darproperty.net

Business Development & Products

Abdallah Mugasa Designs & Layouts

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PRIDE TANZANIA...............................................39

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Disclaimer

VILLAS................................................................31

The Darproperty is published by Darproperty Tanzania Company. All rights reserved.

The contents and opinions expressed herein are not necessarily the representation of publisher’s view. All material published is deemed to originate from the author and will not accept any liability whatsoever in respect that have been sourced from contributors.

Users are required to make their own judgement on the details contained in each advertisment. While every caution is taken in compiling the contents of this magazine, the publisher will not accept any liability for the effects arising thereof. No part of this publication will be reproduced with out written consent from Darproperty Tanzania Company.

This magazine is registered by the government of United Republic of Tanzania under the newspaper Act no. 3 of 1976 and the Postmaster General. Registration No. 00005562

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