Investing in Malawi

[Leanne Hunt]

Just for interest's sake, I thought I'd share a story from Africa. A friend of mine owns a piece of land near a major city in Malawi. As she works in South Africa and seldom goes home, she has not yet developed it. Last year, however, she got word thatpeople were moving onto the land and that the chief in the area was growing impatient.  He insisted that she either sell the land or build on it, as it was becoming difficult to protect the land against squatters.

My friend has little money to invest, and building costs in Malawi are high. She has in mind to first fence the property, then lay a foundation, then build a room or two, all the time working to save for the next phase. I thought about it and concluded that it would be better to borrow a lot of money and complete a project, since she can at least earn rental on a finished house. However, it is doubtful whether the bank will loan her enough for a whole house and besides, overseeing a managing the project long distance, especially in Africa, is high risk.

Then it occurred to me that she could build lock-up storage garages. We have all heard about the floods in Malawi, and apparently, flooding is an annual event. Most houses are made of mud bricks so partially collapse when the rains come. Proper brick storage units with secure locks could provide shelter for crops, vehicles, furniture, machinery and anything else that needs to be kept while rebuilding happens. They will also bring in a good rental income and be far quicker to build than a house with all its detailed finishes.

I am keen to know if anyone else has experience with building in Africa or with lock-up storage units. As a fairly new investor and someone who does not have experience in the building trade, the logistics of a project like this are beyond me. Other than that, any useful contacts would be appreciated.