Return on investment should drive an investor’s choices
The most successful people do not work for money, they let money work for them. This is one of the phrases synonymous with most investors.
Investing entails putting money in a certain venture that generates profit for you either through your direct input or others’ inputs. One such investment is land and, in this case, a commercial plot that could be used for current business investments.
However, before committing any amount of money to buy a commercial plot, one should consider the following factors.
This includes roads, electricity and water which are vital when establishing a business venture. The plot should be close to the main/tarmac road for easy access to the business by prospective customers and suppliers. Inaccessible businesses seldom survive.
Electricity and water are important since their absence or scarcity could increase the cost of production, which eats into profits.
In case you are buying commercial plots plot to establish a venture that deals in retail, it is important to have it in a place that is fairly populated since the residents will be your target market.
Underpopulated areas may see your venture under-perform, while overpopulated areas may pose risks to your business due to lack of amenities such as security, natural resources.
The area, in the recent past, has been experiencing increased settlements as people seek places to build homes near Nairobi’s CBD. The areas lie inside 50-kilometre radius from Nairobi city, making it strategic for settlement and business.
Zoning is a government legal measure of ordering land uses and is the basic tool of urban planning today. It allows the government to control and regulate the uses and characteristics of buildings, structures, and land.
Areas can be zoned for industrial purposes, commercial buildings or residential purposes.
Commercial plots in areas like Joska, Kamulu and Malaa can be used for residential and business purposes. Most parts of Embakasi South in Nairobi, for instance, are set aside for industrial uses and it would thus not be advisable to buy land for commercial purposes in such locations.
Return on investment should be the focus of any money placed in any venture for profit-making. The price of any commercial plot should be reasonable depending on prevailing market prices.
For instance, an eighth of an acre in places like Malaa, Kangundo Road currently retails at between Ksh1.8 million and Ksh2 million.
A commercial plot should be in areas with good business prospects, and not just in any area where there is tarmac road and electricity. They should be areas that have a high potential for economic growth, or their current economic growth is good.
Such areas have reliable transport and communication network, schools and other educational institutions and administrative organs of the government.
While choosing the best location for commercial plots, it is important to read existing research and recommendations by experts.