We recently acquired a few acres of land along the Jinja/Iganga highway. The idea is to set up a country home with a commercial agriculture project. We bought the land from a sugarcane farmer who has since fallen upon hard times. His cane was overgrown and he had failed to get a permit from the sugar factory to sell his crop. So he decided to sell the land at a low price to cut his losses. The land is one kilometer off the main road, and has power and piped water in a fairly decent and developed neighborhood. This is part of our long term retirement strategy for the family.
We first ventured out into land back in 2010. I recall we took out a loan and bought three plots of land in Gayaza at Ushs 3.5 million each in an organized residential estate. Those plots have since quadrupled in value and are now going for about Ushs 15 million each. As a family policy we have acquired a piece of land in different parts of the country every year throughout the last decade.
Land is one of the best asset classes to hold in a developing nation like Uganda. We have a very young population. These people will eventually need houses, schools, food, hospitals, recreational facilities, factories, etc. All these things come from land. Land generally appreciates in value. In fact it is the only asset we don’t depreciate in professional accounting. Land is one of those assets which can be passed on to your children. Your kids can’t inherit your job or profession for instance. The downside with land is quite low. The only issue with land is that it requires some capital investment to generate an income and is not very liquid.
The trick is to buy fairly priced land away from the city center along the main highways. The land should have clear ownership and access. If possible utilities like power and water should be nearby. Before you buy land make sure you build a good relationship with the local council authorities and neighbors. These people will tell you if there are any issues with the proposed land and will protect your interests. Don’t pay cash. Pay through the bank so that you have an audit trail. Get as much evidence as you can through video recordings, audio, photos, IDs, etc. Take immediate possession of any land you acquire by fencing it off. Develop the land gradually and in any case wait for at least 10 years before disposing it off.
In order to deal in land you need access to quick cash in terms of savings or a financing facility. You also need professionals to help you. Find a good broker, a surveyor, and a lawyer. Do your own due diligence before engaging with any of these people. The broker will help you to find land which matches your interests. She will also do some due diligence on your behalf. The surveyor will establish the boundaries and size of the land. They will also help you process the title. The lawyer will do the purchase agreements.
If you have some cash to spare I would encourage you to consider investing in land. Many people are struggling financially this year and are willing to sell their properties at cheap prices. Take advantage and acquire as much property as you can.