News and Analysis
November 21, 2024
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EDITOR’S NOTE: This article is part of our Money254 Partner Series produced in partnership with Vuka, an investment club that allows Kenyans to invest in the Acorn Student Accommodation I-REIT.
I remember this day like it was yesterday. It was in 2017 and I had just landed my first formal job with an auditing firm in Nairobi. As we got to Westlands and I started seeing highrise buildings, I stared out the window of the Matatu and asked myself, who owns these buildings? What do they do? I took it as a challenge to come into Nairobi, conquer it, and maybe own a building for myself, just to show that I had made it.
Today, as I crisscross the city, I am looking at buildings that I own a share of.
What I have learned since then is that the rich do not own the buildings alone; they share the cost of the building and the subsequent earnings through rent. Even though I do not yet have a building with my name on it, I have my mark on the Nairobi skyline.
The way I did it is accessible to everyone.
So let me tell you how I got here.
Like I said, I came to Nairobi seven years ago. I went to that university in Njoro, a few kilometres from Nakuru town. I will be turning 31 in August this year.
My big goal today is to build a family home in Juja Farm, where I bought a piece of land in 2021.
Buying my first “ka plot” at 28 was a big achievement. My first job came with a decent salary and I started from day one to be a disciplined saver. I also didn't let my money lie idle.
I needed a savings and investment instrument that was medium to long-term and would suit my goal of owning land close to the city before my 30th birthday. I knew of Saccos since my dad is a teacher and transacts a lot with Saccos. So I joined one.
I also built an emergency fund with Money Market Funds (MMFs), and I doubled in a few NSE-listed stocks, as well as government securities. However, when I was buying land, I had to liquidate everything, including exiting the Sacco to raise the money needed to buy the eighth-acre plot which cost me Ksh550,000. That was in December 2021.
Last year, in January 2023, I was tasked with accompanying my supervisor to an offsite project. This meant that we had to be on the road for a while. While on the road, a conversation struck.
I explained to him my story of coming into the city. I told him that I had started laying my mark as I had already bought land and was looking to build a family home. After that, I told him, I was planning on building some bedsitters to rent out.
“I own several highrise buildings,” he responded in an apparent joke. But he was serious. I was shocked at first. “Why are you working? I asked him, “You should be stinking rich or something.” He laughed it off and asked if I wanted to know how he did it. I have never been so excited for a conversation.
He asked, “What do you know about I-REITs?
I knew absolutely nothing. I had never even heard of them.
I-REIT is an acronym for Income Real Estate Investment Trust. What this means is that an I-REIT is an investment vehicle where people pool their money and invest in income-generating real estate. That is, buildings that are already generating rental income!
This is an innovative solution introduced in 2013 by the Capital Markets Authority (CMA) to stimulate investor participation in the real estate industry.
Through I-REITs, investors come together, and through the regulations set by the CMA, they can buy prime income-generating property that they would otherwise not afford individually.
After a few minutes of this deep dive into real estate investing 101, I was starting to grow impatient. I wanted to hear the grand story of how my colleague owned a highrise building.
His secret was the Vuka Investment Club, the platform that allows Kenyans to invest in Kenya’s premier I-REIT - the Acorn Student Accommodation I-REIT.
He explained to me how he started with small amounts but has since scaled up after receiving dividends from the buildings owned by the I-REIT - most notably the beautiful Qwetu Hostels.
The Vuka Investment Club started in 2021. It offers a platform where Kenyans can easily and safely buy and sell units of I-REITs, which include Purpose Built Student Accommodation (PBSA) brands - Qwetu and Qejani.
I know you now have connected the dots.
My colleague started investing with Vuka early on and by the time he was sharing the story, he had already received a couple of dividends.
After that fruitful banter, I immediately started researching more about I-REITs. I learned that they are regulated by the Capital Markets Authority (CMA) - the same as the MMFs and the NSE shares I had already been using. It also uses the principle of collective investing which I was familiar with through the Sacco membership.
In March 2023, two months after the chat with my colleague, I joined Vuka, initially contributing Ksh5,000 per month. With this small amount, I started my journey of receiving rental income from a multi-million property in Nairobi.
After receiving my first dividends payout, I took some of the savings I had previously kept in a savings account and moved them to Vuka.
Today, as I move around the city, I know that I do not own a skyscraper by myself, but I own a piece of the Nairobi skyline. My units are now worth slightly over Ksh300,000 and I intend to keep buying more units until I have raised enough to start building in Juja Farm - hopefully in 2027.
Joining Vuka has been one of my best investment decisions. Unlike buying my first piece of land which needed me to spend all my savings on an asset that has not been generating income, Vuka takes just a small portion of my savings which instantly starts earning me money.
I continue to pursue other investment types in the quest for diversification without feeling like I am tight on cash because of my real estate investment with Vuka.
Nowadays, I share the Vuka investment opportunity with anyone who cares to listen. This is why I share;
What I have learned is that, in life, there are opportunities to accomplish whatever goals you have. You just have to be courageous enough to seek out information and act upon the information you find useful. Today I have shared about Vuka and how it has transformed my life. Now you have the information. Would you like to join me? Start your journey here:
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