Real estate pays you twice, in rent and in price, and the two follow different clocks
What this is about: Property income has two separate parts, and mixing them up is the most common mistake in how people think about this asset class. There is the rental yield, the cash that lands every month, and there is capital appreciation, the change in what the asset would sell for.
The two ways to hold it work on different terms
• Direct property: high control, high illiquidity, exposure concentrated in one asset
• Listed REIT: low control, high liquidity, exposure spread across many properties
• Direct property in Kenya carries stamp duty and land rates that a REIT holder never touches directly
• A REIT's price can move daily with sentiment even when the underlying buildings are unchanged
A worked scenario, numbers marked as illustration only: Say, purely as an illustration and not a market reading, someone buys a rental unit for KSh 10,000,000 and it generates KSh 60,000 a month in rent, or KSh 720,000 a year before costs. That is a gross yield of 7.2%.
The line to keep: The rent tells you what the asset is worth to use. The price tells you what someone else thinks it is worth to own. They can disagree for years.
Send me a chat with the word CHECK and I will send you the full lesson, free.
Last image: a portfolio on our demo account, sample holdings. Everything you own in one place, in one currency.
How do you read this one? Answer below.
Follow for a note a day on what the numbers actually say.
$BTC
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What this is about: Property income has two separate parts, and mixing them up is the most common mistake in how people think about this asset class. There is the rental yield, the cash that lands every month, and there is capital appreciation, the change in what the asset would sell for.
The two ways to hold it work on different terms
• Direct property: high control, high illiquidity, exposure concentrated in one asset
• Listed REIT: low control, high liquidity, exposure spread across many properties
• Direct property in Kenya carries stamp duty and land rates that a REIT holder never touches directly
• A REIT's price can move daily with sentiment even when the underlying buildings are unchanged
A worked scenario, numbers marked as illustration only: Say, purely as an illustration and not a market reading, someone buys a rental unit for KSh 10,000,000 and it generates KSh 60,000 a month in rent, or KSh 720,000 a year before costs. That is a gross yield of 7.2%.
The line to keep: The rent tells you what the asset is worth to use. The price tells you what someone else thinks it is worth to own. They can disagree for years.
Send me a chat with the word CHECK and I will send you the full lesson, free.
Last image: a portfolio on our demo account, sample holdings. Everything you own in one place, in one currency.
How do you read this one? Answer below.
Follow for a note a day on what the numbers actually say.
$BTC
#TradingPsychology #Crypto #CreviaCockpit
