
Dr Ibrahim Ssemaganda, the Chief Executive Officer of Buildnet. Photo/Courtesy
In 2007, Brian Chesky and Joe Gebbia were flat broke in San Francisco. Their solution? Turn their place into a temporary hotel for conference-goers. AirBed & Breakfast or Airbnb was born. They solved a simple problem—hotels were expensive, and travel lacked personality. Instead of cookie-cutter rooms, they offered real homes and gave hosts a way to make extra income.
Fast forward, and Airbnb is now a billion-dollar company, turning travel into a global, shared home. But just when we thought the short-term rental revolution had peaked, along comes Property Nest—Airbnb’s wealth-building cousin. While Airbnb changed how we think about temporary stays, Property Nest, a real estate UK firm, reshaped real estate investment.
Imagine owning shares in luxury properties without coughing up the full price. Investors pool their money, buying a room or floor in boutique hotels or penthouses, which are then rented out on platforms like Airbnb. The more efficient the rentals, the better the return for investors—like receiving bond interest, but with the added bonus of real estate appreciation. It’s a game-changer for anyone looking to get a slice of the real estate pie without the hefty price tag.
Meanwhile, in Uganda, the real estate scene feels more like a puzzle than a path to profit. With land in Kampala and Wakiso hitting Shs1 billion for just 50x100 metres, and the average Ugandan earning Shs200,000 a month, it’s no wonder the sector seems more concerned about inflated prices than opportunity.
Hope springs eternal
Throw in the lack of regulation—where money flows freely without oversight—and it’s clear why the market’s been skewed. But there’s hope on the horizon. People like Ibrahim Semaganda, the managing director of Buildnet, are shaking things up. Buildnet, a 14-year-old real estate firm, has already built more than 500 apartment units in high-demand areas like Najjera and Naalya. Along the way, Dr Semaganda spotted a major issue—even with high demand for apartments, 90 percent of clients struggled with the hassles of property ownership.
From finding tenants to dealing with maintenance costs, many were overwhelmed. And even when apartments stayed vacant, they were still paying management fees.
“In a traditional model, an investor buys an apartment, handles everything, and hopes to make a return. But they’re left with headaches, low returns, and long payback periods,” Dr Semaganda explains.
That frustration sparked a shift in strategy. Buildnet’s new approach takes inspiration from Property Nest’s success in the UK and other developers in the Middle East. Instead of simply selling apartments, Buildnet sells investments. This model guarantees high returns, ensures occupancy, and frees investors from the burden of property management. It’s a fresh solution to an old problem, and Buildnet is at the forefront, changing the game in Uganda’s real estate market.
It might sound a bit complex, but let’s break it down with some examples. The typical return on investment from the traditional model takes almost two decades. For example, if you bought a two-bedroom apartment in areas like Naalya or Najjera, priced between Shs300m and Shs320m, you’d be looking at a payback period of around 17.2 years.
Here’s how: if you purchased the apartment for $85,000 (Shs312m)—the ideal value now—the monthly rental income would be about $400 (Shs1.5m). Dividing Shs310m by Shs1.5m gives you 206 months—basically 17.2 years. But this doesn’t account for key factors like vacancies, repairs, and maintenance, which can drag that payback period out.
“In the traditional model, you’re expected to have a tenant from day one for 17 years, which is unrealistic,” says Dr Semaganda.
“There are always downtimes—three to four months of vacancy, repairs, repainting, and tile replacements. When you factor all this in, you’re looking at a payback period of 20 years or more,” he adds.
New model
That’s where the new model comes in, and it promises a payback period of just 11.5 years. How? With this approach, you don’t just buy an apartment—you get a fully furnished unit, with appliances and everything included, and the developer takes care of the rest, managing the property to maximise profit and return. Buildnet piloted this model in an eighth-floor building called Waterfront in Munyonyo, offering investors a guaranteed monthly income of $700 (Shs2.6m), no matter how well the unit performs.
“Even if this month only has 10 days occupied, there will be others that perform better than average, so you still get the same monthly payout,” says Dr Semaganda.
Let’s do the math. At $700 a month, that’s $8,400 (Shs30 million) a year. With a minimum investment of $99,000 (Buildnet’s lowest investment value), the annual yield is pegged at 8.5 percent. In other words, you’re getting 8.5 percent of your investment back each year, and your payback period drops to just 11.5 years.
And it’s not just about the cash flow. Your property also appreciates. Buildnet calculates a six percent annual growth in the value of the property, adding even more value to your investment.
This model doesn’t just change the game—it makes real estate a much smarter investment for anyone, whether you’re looking for steady returns or capital growth.
The numbers
Let’s get into the numbers. When you factor in the appreciation rate alongside your yearly return, that studio apartment could double in value over 10 years, reaching about $200,000 (Shs735m).
“This is a hotel apartment model; not like traditional long-term rentals with lower returns. We focus on short-term stays, so this type of property should perform even better,” says Dr Semaganda.
Let’s take that guaranteed $700 monthly return and break it down. Full occupancy might be a bit tricky—no place is packed every night. So, let’s do the math for just 15 days of the month. Dividing $700 by 15 days gives you $46 per day, the target you want to hit. But we need to account for the usual expenses—maintenance, repairs, and other incidentals. Let’s add 40 percent to that because things rarely go perfectly smooth. Multiply $46 by 1.4 (that’s adding the 40 percent), and you get $64. That’s the target price per night you need to cover all your bases.
Now, take a look at a real-world example: Speke Resort Munyonyo charges a minimum of $180 per night for a standard room. But imagine your apartment has those top-tier South African finishes that make people do a double-take. And it’s just two minutes away for a fraction of the price. Who wouldn’t jump on that deal? That’s why Buildnet guarantees investors $700 a month, regardless of how well the unit performs with a basis that even if some nights are slow, others will make up for it, ensuring a steady income.
No guesswork, no surprises—just simple, smart, and profitable.
Returns
Now, let’s talk about investments. You could stick your money in traditional bonds or insurance products, but let’s see how the returns stack up. With security bonds in dollar terms, you’re looking at about a 5.6 percent return. It’s steady, sure, but the catch is that your principal doesn’t grow.
With Buildnet’s approach, though, your money works harder for you, combining monthly returns with property appreciation. And in the world of investments, that’s what we call a win-win.
In local terms, when it comes to shilling bonds, the return is typically around 16 percent of a 5-year treasury, while unit trusts hover around 11 percent. It’s low compared to other investment avenues, but is competitive from a sector that seemed unprofitable before. The company promises an 8.5 percent guaranteed return and 6.0 percent capital appreciation, which projected a combined annual return of 14.5 percent.
It even challenged the regulators. When the Capital Markets Authority (CMA) got wind of Buildnet’s offering, it took a seat at the boardroom table and said, “Hold on—this company needs to be registered with us.” But Dr Semaganda clarified that Buildnet wasn’t selling securities, and after discussions with the CMA, they reached an agreement that Buildnet doesn’t need to be registered or regulated by the CMA, as long as it’s not selling shares.
Sunday Monitor understands that Buildnet has clarified its offerings to focus on two key services—selling hotel apartment units purchased off-plan as real estate property, and providing rental management services that guarantee unit owners a minimum monthly rental income. The company was advised to ensure clear and accurate communication, emphasising the distinction between property ownership and management services. Following this guidance, Buildnet revised its messaging, removing references to ‘shareholding’ and instead focusing on the direct sale of apartment units to the public.
Following this guidance, Buildnet revised its advertising language, removing references to ‘shareholding’ and focusing instead on owning fully furnished, serviced, and managed hotel apartments with guaranteed monthly rental income of up to $1,900 for the first three years of investment. This translates to a guaranteed 8.5 percent of your total investment.
Uganda’s real estate market is starting to feel like the wild west—big promises, big risks and not enough sheriffs to keep everyone in line. Sure, doubling your money in 10 years sounds great, but if something sounds too good to be true, maybe it needs a second look. Are we laying bricks of fortune, or building castles on quicksand? Only time—and a bit of regulation—will tell.