WARNING – Kampala Investment Scam
It has come to our attention that many people in Uganda, and especially in Kampala, are being smooth-talked into an investment that makes little sense, is difficult to get out of, is time-consuming to try to manage, emotionally disturbing, and makes little or no money. People at the highest level of government are now helping to make the investment even less profitable as they collect their share of the ill gotten gains and harvest from the misery of the common man and woman. No more we cry!
Investment Owl has uncovered evidence that this rotten investment scheme has been operating for more than two decades, that like all Ponzi schemes and multi-level marketing scams it is only the early entrants that made real money, and that in many cases investors have been lured into it by their own parents and older siblings that claim to know it all. And now a rebel group calling themselves URA (Unlimited Revenue Acquisition Group?) are attempting to feast on the fleshless bones of these poor investors. Scandalous.
I refer of course to the utter insanity of investing every spare shilling into Kampala rental property. As reported in Daily Monitor this week – “Kampala Residential Property Prices Drop” – where we are informed that property prices in Kampala have fallen by an average of 10.5% and in Nakawa by 26.4% – MORE THAN A QUARTER!!!! Not only has the price of the property taken a dive but the rentals that they command has also fallen. And with the financial hardship of Covid19 tenants are late with rents or disappearing completely – sometimes with the wiring, light fittings and doors. A client told me today that 60% of his rentals, good quality executive homes let to professionals, are in arrears.
A fortunate Landlord may now be making a net 2% per annum on their rental property. And so the government has decided to tax them. Not based, initially, on the yield that they are making or the rent that they are actually receiving, but on an arbitrary amount base upon bedrooms and location. And of course it will be the owner´s responsibility to prove that the assessment is incorrect. My favourite story on this was from a Kampala client who was contacted by URA and told that she and her husband must submit details on the rental properties that they own. “But we don´t own any!” she said. “You must do,” said URA, “we can see from your income tax how much money you both make, you MUST have rental property.” An interesting approach.
If I advised my clients to invest in something that generated less than 2% per annum, lost a quarter of its value in less than 12 months, attracted arbitrary taxation, and required my clients to regularly check was still in good repair they would laugh at me. If I told them that once they had invested they would be very, very lucky to be able to get out (because they can´t sell the property in an election year) they might stop laughing and punch me.
Unless it is very prime and seriously distressed do not fall for the Kampala property scam this year. We can give you a list of safe places for your money where you don´t have any management overhead, can exit in 12 months, and enjoy tax-free income of at least 10% per annum without having to worry about the shower, the plumbing or the tenant! OR the URA. It´s time to enjoy arm´s length investments with fixed terms and fixed returns. Get in touch if you want to know more.
By Jon Bennion-Pedley.