My name is Lyn. I have savings of Sh2 million. My five-year job contract working outside the country ended in March 2023. I am thinking about buying land worth around Sh1 million as a long-term investment. I also want to buy a two-bedroom house in Ruiru from King’s Developers which goes for about Sh2 million. I also want to buy an Uber (I might end up being the driver because getting a job in Kenya has not been easy and I need to start earning). I’m a single parent with a two-year-old. I need to secure my child’s future with a good education and medical cover. Please advise me on what to do and if the Uber business can help me buy the house.

Inziani Khasiani, financial consultant and the executive director at Klientele Kenya

Congratulations on your saving efforts. 

In the short run, the focus should be generating cash flows to sustain your upkeep and that of your child.

You are looking at the purchase of a residential house that would be used as primary accommodation to avoid paying rent or it could alternatively be used for rental purposes. It is not clear what the plans for the proposed purchase of land are. Do you want to use it for farming or the same could be leased out to a third party at a fee? You also propose to purchase a car and operate it as an Uber taxi. 

The ideas above need to be looked at against the available funds. The total budget required to meet all three is Sh3.7 million with an assumed car purchase price of Sh700,000. There are two options that I recommend you explore.

The first is to target income generation. This would require that you take some risks. The second is to target financial stability. This would be the conservative approach where you take minimal risks.

If we take the second target, you can invest the Sh2 million in government securities. The current yield is an average of 12 percent. This would give you Sh17,000 net per month.

You can, as an alternative invest the same amount in the Ruiru apartment. The rental therefrom would probably be Sh15,000. The option of renting the unit would be possible if you have an alternative accommodation arrangement.

Purchase a house or government security would deplete your savings. Your project for land and taxi would thus require the generation of new cash flows to help fund the same.

Using the skills and experience you have gained, you can consider low-capital business ideas. A lot of such businesses are in the tech space. Even if you do not have the skills, you can acquire them.

I recommend that you prepare a small business plan for whatever idea you wish to pursue and look at the numbers. As earlier mentioned, as you take this option, understand that as a business person, you are taking risks. If you mitigate the risks well you will earn a profit. The alternative is that you will make a loss and lose the capital invested.

If you decide to buy land, the same can be used for farming. Put to paper the proposed farming activity. Consider the risks and plan how you would mitigate them. If you take this route, join the network within the area of operations for technical support and to grow.

If you purchase the land in a strategic location, you can rent/lease the same and it will bring in some revenue.

Prior to launching the taxi project, draw out a business plan to help you understand the general requirements of running a digital taxi. While the taxi business is very popular, it is recommended that you talk to a person who has been in the business.

On its own, the profit margins in the taxi business would take a much longer time before you are able to purchase a house. Hopefully, the low-capital business can start generating funds to supplement the taxi and farming. The above avenues should allow for adequate inflows to take care of the medical and education expenses of the child. You should also evaluate whether these avenues will be adequate to keep you from an office job or if you might continue searching for employment, and utilise the suggestions as extra sources of income.

If you have any money problems, send us an email at [email protected] and leave your number for contact. Money questions will be answered in this column.