Don’t be duped: What you must know about investing in land

Wednesday June 5 2019

An aerial view of a piece of land divided into

An aerial view of a piece of land divided into plots for sale in Wakiso District. PHOTO BY ERIC DOMINIC BUKENYA  

By Eric Kyama

Investing in land is a worthwhile venture that will always pay off. This is mostly because land is one of the few assets whose value usually keeps appreciating with time. So whether one intends to construct a structure, farm on it or simply buy and resell, there’s always a profit to it monetarily or in kind. Because of its high value, the land market is booming but so are fraudsters who target unsuspecting buyers and sellers.
Land transactions are wont to come with many controversies most of which are unavoidable.
In 2016, Mr Ronald Mukasa Ssebulime bought a piece of land on which he built a two-bedroom apartment. He says this venture was such a success that he decided to buy more land but this time, to resell it off at a profit.
A few months into his new found business, Mr Ssebulime says the biggest challenges are finding land at a location where potential clients would want to live and fake land titles.

Land Use
Are you looking for land for residential or business purposes? If it business what exactly do you have in mind, a school, hospital, farm, factory, supermarket? All these are factors to consider before buying land. This in turn usually dictates the location of the land. Mr Andrew Kuteesa explains that the location must favour whatever investment the buyer has in mind.
“If one’s aim is to set up offices then they would have to look at locations with good infrastructure such as roads and other utilities such as water and electricity,” Mr Kuteesa says.

Availability of water and electricity must be considered when buying land.
“The presence of utilities like water and electricity today might be taken for granted but we still have places in Uganda that do not have them. So it is important to put this into consideration,” Mr Peter Lukwago, a real estate agent with Sema Properties cautions.
Hospitals, roads, schools are also added advantages especially if the land is far from an urban area or trading centre.
Besides utilities, environmental considerations should also be taken into account.
“Some places are prone to flooding while are others just don’t have the right soils for some physical structural developments. To avoid such issues one needs to cross check with the authorities in area.” Mr Lukwago adds

Mapping zones is done to separate one set of land use from another because different areas are used for different purposes. Before you buy land, talk to local authorities about the said land. This, Mr Daniel Kizito, a real estate agent with Sema Properties, says is a way to get firsthand information on zoning ordinances and whether one can build the type of home or construction they would want.
“One of the mistakes people make is to buy land without asking the authorities about issues like future zoning. Are there plans to put in place certain structures like a hospital or transform nearby land into amenities that might not favour you? For example, look at Namanve, government has decided to make most of it a manufacturing industrial centre. Knowing government plans is important since it can help one know whether that is actually the right place to buy,” Kizito explains.

Market survey
“For anyone intending to buy land, conducting a market survey to find out how much land costs in a given area and the market prices of investments is key,” says Andrew Kamukama a land valuer with Forte Concrete, an engineering construction company. In fact, prior knowledge of how much different landowners are charging for land in a given area will give you an upper hand during negotiations.
There is usually no standard minimum or even maximum price for land. Land is priced differently according to location, the developments in the area although it all comes down to the land owner. A 50 by 100f ft plot (12.5 decimals) could go for Shs100 million in one place and be priced at Sh15million in another place. Landowners retain the discretion to name their price as they see fit.

Fake land titles
Before buying land, you must make sure that first of all the land is titled and secondly that the seller has the right title for that particular piece of land.
When you have identified the land of choice, go to the relevant lands office with the details of the land in question for instance block and plot number, location, verification of owner and carry out a search. If the details at the land office match those on the land title the seller presents, then you are off to a good start. If not, then you might have to start looking elsewhere or you might end up buying ‘air’.
Other things to look out for when doing search is to make sure there is no caveat on the said land or even squatters. Buying land with already existing squatters is not a good idea but if that is your preference, then by all means, go for it. Also beware of land whose owners are embroiled in family wrangles over ownership and management. Always insist on transacting with the actual owner.

Finding Land for sell
The rate at which real estate companies are being established makes it impossible for a buyer to lack information on available land for sell. However, as is with most things in life, verifying the authenticity of these companies, agents and brokers is key. Recommendations from friends and family are also good.
When dealing with agents, always be cautious and verify documents before you sign or make any payments. This must always be in presence of your lawyer and or local council authorities.


Professional help
Don’t try to be a know-it-all if for no other reason but that your money is at stake. It is important to employ services of professionals like a trusted lawyer to help draw up contracts, verify documents, look at sale agreements and offer advice and a surveyor to among other things determine the land boundaries and demarcations to make sure what’s on paper matches what’s on ground.

Now that you have the land
After land has been acquired, documents signed, title attained and ownership transferred, what then?
Fence it off: “If it is a bushy area, one may need to clear and then in case one is not planning on using it soon they would have to fence it put some activity on the piece of land just to keep away squatters,” Mr Kamukama, says.