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Building Houses for Rent

Sample detail study file attached at the bottom of the page

  1. Product Description:-  This project idea envisages the construction of small houses in zonal and woreda capitals throughout the Amhara Region for renting to government employees and other people. The houses will be small ones (one or two bed rooms, a living room, a small kitchen and a toilet) which will be affordable to ordinary employees such as teachers and personnel working in the various bureaus and offices at the zonal and woreda level of the Regional government.


  1. Market Potential:- After the decentralization of the country’s government and administrative apparatus, many offices, agencies and other institutions are established at the regional zonal, woreda and kebele level. And thousands of employees are deployed in this new regional government organizes. In addition, due to the increase and expansion of schools, clinics, health posts, additional teachers and health personnel and assigned in different localities of the Region. Besides, dur to expansion of urban economic activities such as trade and commerce, woreda and zonal towns and other urban centers have expanded thereby increasing their population. However, while the number of regional government employees has increased in all urban centers and while there is a general increase in urban population throughout the Region, these were there is a general increase in urban population throughout the housing units in all urban centers. As a result, there is an extreme shortage of houses to be rented in every urban center of the Region.

This is one of the most difficult problems facing teachers, employees of different bureaus and offices of the Regional government. Due to the shortage of houses, these state employees and others and forced to live in sub-standard houses while paying exorbitant. There is a wide spread exploitation of state employees by owners of mud plastered houses at the zonal and woreda level. One of the most discouraging factors for people to work at the zonal and woreda level is the shortage of houses. Some regional government employees are forced to stay in “hotel rooms” year in and year out. One possible solution for this major problem is to encourage investors to build houses to rent for people working in zonal and woreda capital. These houses do not have to be made of expensive building materials. They could be built from local building material so that they could be cheaper to building. All they need be is clean, sturdy and comfortable with their own essential rooms including toilets (dry latrines). Such houses will have enough tenants to rent them at payments which give the investors an attractive financial return.


  1. Source of Raw Material:- Building such houses will require wood poles, nails, corrugated iron sheets, some cement, stones, and some paints. Instead of wood poles, hollow blacks could be used. Except the nails, corrugated sheets, cement and paints, the other inputs will be obtained locally.


  1. Process:- The process involves the acquisition of land for building the houses, the purchase of the building materials, the construction of the houses and renting these houses to “tenants”. 


  1. Estimated Investment:- The investment is estimated for one unit of a house with 40m2 size. Assuming tht one m2 will cost Birr 250 to build, the investment cost for a house will be Birr 10,000. If an investor builds 25 units of these houses in a given urban center, total investment will be Birr 250,000.


  1. Benefits:- Improves housing conditions in urban areas of the region, creates reasonably good conditions for state employees to work in remote urban areas, creates additional business opportunities to investors.


  1. Location:- Zonal and woreda capital and other urban centers of the Region.

Moges Ashagrie,
Dec 28, 2010, 10:58 PM