The tenants for the remaining two apartments (out of six) in Yopougon have now been selected. One is a factory worker in the Zone Industrielle de Yopougon, working with cosmetics I think, and the other is a security guard. Very regular blue collar day jobs in other words, and even formal sector ones.
According to my local partner one cannot ask them for their salary, but an estimation would be that it is below 100,000 CFA Francs (152 EUR) per month, maybe in the 50,000 – 80,000 range. To get the total household income, the income of the spouses need to be added, but at the moment I don’t even know if the two new tenants have spouses.
While these households are poor in an absolute sense on a global scale, they are actually above average in the Ivory Coast and among the relatively lucky few that earn a regular income. If this was the norm the Ivory Coast would be called a tiger (or lion) economy and a success story.
Anyhow, I am starting to suspect that I have been worrying too much about tenants not paying rents. Looking at their incentives, they have paid a five month’s deposit and there is also a credible risk of being forced to moved out if rents are unpaid. I hope it won’t need to go this far but after two months’ unpaid rent, one can start the process of getting an expulsion order at a court and having a “hussier” to execute it. It might be a bit complicated and cost more than 5 month’s rent, not including bribes, but it is doable.
The tenants are likely to have unexpected expenses, such as a relative needing medical care, that can delay rent payment, but my guess is that unrecoverable delays will only happen if their regular income is lost. I am guessing that a tenant is not going so far as to risk losing his home to help a relative or sort out other problems that can arise.
If I’m right, it means that the rents will be paid relatively alright, and absent other troubles (such as for instance floods, damage to the property etc) the investment should work out. The idea with this investment was partly to test investing in a not so well off neighborhood on a small scale and learn from it, and if it looked promising, do it several times over.
Now,while it does look promising, doing it several times over poses a few problems. There aren’t that many similar plots of land for sale in Yopougon, and those for sale are often so called “terrain villageois” where property rights can be unclear and it can be a long bureaucratic process to sort them out. The whole process of buying land has many pitfalls, making patience very important.