‘Start Small & Work Hard. Don’t Borrow For Real Estate Development Until You Have Four Properties’ – Dr Sudhir

Property Mogul Dr Sudhir Ruparelia has shared from his wealth of experience in real estate development, advising potential developers not to rush into borrowing until they are able to finance their loans.

Sudhir made remarks earlier this morning while appearing on Uganda Revenue Authority’s e-Bomba Business Summit as one of the key note speakers on the topic “Investing in Real Estate –What you must know and Do’.

“Your success in real estate will only come if you don’t borrow money. It is good business but if you make a mistake and overstretch yourself, it will bring your downfall,” he said.

“Work hard, create your own cash flow and build without any borrowing. Do not borrow till you own a minimum of four properties. Then you can borrow to expand knowing you can service the loan,” the loan.

He gave an example of his empire that has now taken 36 years to grow. “If you want overnight success, you might not make it or you might go down,” he cautioned.

Sudhir said that some people see their peers developing real estate portfolios through borrowing, not knowing that these people already have a buffer to pay up their loans.

“The economy is determined by demand and supply. You don’t plan for things like a pandemic. When the economy is in a recession, one of the biggest hit sectors is real estate. If you are in debt, that is double jeopardy,” he said.

However, Sudhir advised that those who must take mortgages from banks should borrow with a payment plan equivalent to the rent they pay every month. They can then convert what they were paying in rent into a journey to property acquisition.

The advantages of snapping up condos

Sudhir advised people to take up condominium properties instead of investing in homes that are way out of town.

“I think condos are the future because land in cities is getting expensive. We have a traditional view of every Ugandan wanting to own a house and garden. But you can only expand outwards so people are starting to build far out of town. It takes people two hours to get home and two ours to return. That is time you can use for developing your business,” he said.

Sudhir’s Meera Investments recently ventured into condominium development with their latest offering being Bukoto Heights that’s about 10 minutes from the Central Business District.

Sudhir added that condominiums come with more advantages apart from proximity including security.

“A condominium also secure. You are not exposed. Anybody who wants to come and rob you will think twice. Insecurity in the suburbs in a big issue.  That will push people into condos,” he projects.

He said uptake of condominiums requires mind-set change. “Traditionally our mentality in Uganda is to buy land and we keep building slowly. It takes four to five years to build. In the meantime you are paying rent. This is the group I advise to take up loans and acquire condos so that they convert their rental payments to servicing loans,” he said.

For anyone with some money to invest, Sudhir says Real Estate is a safe bet. “Inflation will eat your money if you are keeping it in the bank, but real estate is inflation proof. Building will always be there, but plan it right,” he said.

“But while investing in real estate, don’t overstretch yourself. Manage your cash flow. Understand that it takes time to grow. You cannot go wrong if you plan it right,” he said.

Location Location Location

For anyone investing in real estate, Sudhir says location is key.“Investment in real estate is all about location location location. Plan your location right. You have to know whether the location is suitable for low cost housing, warehousing, office blocks, apartments and so on.  It is all about location,” he said.

He also advised about projecting what the area will be like in five to 10 years when taking an investment decision.

You just don’t say I got this piece of land. See what is going to happen in that area in the next five years and plan accordingly. He projects that as the country develops, suburbs are going to be a “hot cake” as they will all need areas that provide different amenities from schools to hospitals to shopping centres.

Sudhir also says people shouldn’t restrict themselves to Kampala as towns across the country are growing.

“Go for it,” he advises everyone interested in real estate.


Leave A Reply