OOPS!! MY BAD, THE COST OF BEING WRONG

What’s the difference between a gambler and an investor? A quick Google search provides a contrast between the two. Whereas an investor aims for long-term gains by prioritizing informed decision-making, a gambler carries a great risk of loss by relying on luck.

When we think about bettors, often, the picture that comes to mind is of young to middle-aged shabbily dressed men, queuing in front of heavily branded payment booths, in a room littered with small pieces of paper, waiting their turn to make a stake on who will win the next English premier league title. Sometimes you may feel sorry for them. What level of desperation would lead a father to hedge his family’s sustenance on an outcome he has no control over?

What if I told you this person also exists in the real estate industry? What if that person is you?     

If we go back to the definition of a gambler as mentioned above, let’s think about how many buildings we have seen coming up, that led us to ask, what were they thinking? Were they even thinking in the first place? This question usually comes to mind when I find a high-end apartment block with no parking spaces. Sometimes it is a five-storeyed building where only the first two floors are occupied. Other times, it may be a hotel structure in a location with no possibility of guests ever wanting to stay. In all this, I’m baffled by the idea that someone staked millions of shillings on an idea without first seeking all the necessary information for them to make the right decision.

Real estate being a highly illiquid asset, selling off a structure after it is completed can be an uphill battle. Especially if it has difficult problems to be resolved. Therefore, I wonder why anyone would go into this kind of investment without discovering all the possible influences the investment will be subjected to, essentially putting all hope in luck and blind faith, just like our bettor described earlier.  

The real challenge with real estate betting is that the stakes are usually unforgivingly high, sometimes costing an individual their entire life savings. Millions of shillings go into buildings, usually coming from the investor’s savings or bank financing. When it doesn’t go well, most people do not recover from the mess that ensues. Unlike betting on football, in real estate, one may not live to try again next time.  

What should you do, to avoid the pitfall that has claimed many budding real estate investors?

If you are starting, with little experience, you may want to learn about the industry from seasoned players before you strike out on your own. Identify investors in your field of interest, and forge a working relationship with them where you can participate in some of their investments as a partner or passive financier.

If you only want a piece of the real estate cake in Uganda, without necessarily being involved in the day-to-day management of the investments, identify a real estate investment management company like Baros Group Limited. Tap into their expertise and experience to maximize the potential returns on your assets. Minimize the cost of being wrong in real estate investing.  Ensure that you don’t only depend on luck to reap your rewards. Stop rolling the dice on your real estate investments.

To learn more about investing in Uganda’s Real Estate industry, visit https://www.barosgroupltd.com/

About the author;

Benard Sonko is a real estate investment manager and founder of Baros Group Limited. For comments and inquiries, you can reach him on +256742140251 or info@barosgroupltd.com