Real Estate Investment in Kenya – Tips & Things You must Know

How To Invest In Kenya Real Estate

Real Estate Investment in Kenya – Tips & Things You must Know


July 4, 2018 | By : Hayer One Marketing

🏙️ Want to invest in Kenya real estate in 2018?

🏘️ Need to know,  How To Invest In Kenyan Real Estate easily and in best possible way?

Most of the Kenyana are believing the real estate as the most profitable business in Kenya. Though an investment made in kenyan real estate market has its own advantages, there are certain things one needs to understand.

Like any legitimate business in Kenya, there is a high probability of getting exploited. For professional advice on property market you can contact us.

In this blog you will learn about:

☑️ Overview

🏗️🏘️ Property in Kenya | Kenyan Real Estate Investment

Let us give a brief overview on purchasing the property in Kenya:

To avoid any sort of complications, keep a check on the following things:

  • the validity of the title deed (a title search is must before making any real estate purchase).
  • zoning of the property ( it is better to be aware of zoning laws that simply specifies the areas where residential, commercial or recreational activities may take place).
  • land rates and taxes are paid or not
  • check if there are any caveats against the property or any pending disputes on ownership.

And once you are sure for the aforementioned things, check out the entire process of purchasing the property.

Nest is the financing of the land you are opting for.  In case, you are preferring a loan or mortgage for financing your property investment in Kenya, make sure you fully understand how much amount you are going to pay back.

The last step is the consideration of security and insurance. Real estate investment, as any other asset, should ideally be insured. Shop for the best property insurer.

Check online quotes for an estimate of insurance premiums you will be paying. Last, but not the least, you must know the terms and conditions, claim settlement and then buy the right insurance.

Real Estate Investment in Kenya - Things To Consider

 

🏗️🏘️ Real Estate Investment options in Kenya: 

There are three major types of property options where one can invest in Real Estate Kenya:

  • Buying a commercial property:

One of the most reliable option available for Kenyan investors is investing into a business property. Such an investment is looked upon as a more stable income source. This is because the lease agreement is for the period of not less than the five years and involves a rent increment clause over the lease period.

  • Buying a residential property:

Residential property is another property investment avenue in Kenya. One can purchase apartments, built houses or land and then construct building. The only thing is that it will be lot of expertise and is capital intensive.

  • Buying the land:

Now the most important real estate investment avenue in Kenya i.e. Land. Once you buy a land, you can do anything with it. Mostly people purchase the land and then wait for the right time to sell in order to earn higher returns. As there is a common phrase

                   Don’t wait to buy. Just Buy and Wait.

Apart from this, there are several ways to add value to your purchase. Of course, in case of real estate business, terrain is ‘KING’ Consider the terrain while buying the land. You can develop the land the way you want. Although it will include expenditure at its initial stage but definitely will end up paying you handsomely.

🏗️🏘️ How To Invest In Kenyan Real Estate? 7 Important Facts To Consider

How To Invest In Kenyan Real Estate

Now that you are aware of how to invest in Kenya Real estate and what are the options available, if you intend to venture into Real Estate business in Kenya, here are 7 important facts one must know before starting your investment journey in the country:

  1. Nothing Like Small In Real Estate Avenue:

Many of us think that a huge saving is required to invest in a real estate business which is a big misconception. People think that the money they have is too insignificant to buy a property. We would like to advise them that they should seek guidance from a real estate agent. One can lose several investment packages and opportunities to get into this business due to the obscurity of real estate market.

  1. Real Estate – NOT A GETTING RICH SCHEME:

Many of us think that a real estate business requires a huge saving which is a big misconception. People think that the money they have is too insufficient to buy a property. We would like to advise them that they should seek guidance from a real estate agent. One can lose several investment opportunities to get into this business due to the obscurity of real estate market.

  1. Never Start it as a Primary Business

It is really a bad idea to quit your present job and directly indulge yourself completely into the real estate world, especially if your job is providing the initial capital for your investment,. An initial start with the business is going to take time for ripping good results. Further, you can’t predict whether the results are going to be in favor or not. We would recommend to hire professionals to manage your investments.  Property agents are much experienced for the reason they are been into this industry from a long time and thus they can effectively handle the investments for you.

  1. Create a team of trustable and capable persons:

Having a right team is the biggest support in case of risk management. Before making any big move, they can guide you for the right decision.. You must look for following persons:

  • a property valuer,
  • a conveyancer,
  • an accredited contractor
  • a loan adviser

These are the professionals one must involve in the team. This might seem you an expensive deal but building a right team of professionals  will actually save you thousands and millions of shillings when it comes to high financial expenditures.

Real Estate Investment options in Kenya

  1. Understand the importance of location in a Real Estate Investment:

There is a famous saying for Realtors:

Buy the Worst House in the Best Neighbourhood.

What it conveys is that the importance of a property is not measured by the cost of construction when we talk about prime locations instead it is measured by the value of land where the property exists. So, while investing in a property, it is not obvious to always look for a beautifully constructed buildings or apartments. Investing in a simple establishment at a high-end locality always pays magnanimously.

  1. The 1 PERCENT Rule:

Always seek advice from your property valuers while putting up any property to let. No matter whether it is a residential apartment or a commercial building, make sure that the monthly rent of the property once lent is always more than 1 per cent of the total investment cost.  This will enable you to redeem your investment in less time.

  1. Never Love Your Property:

Most of the times when people redecorate or redesign the building or redesign, they fall in love with it. They do everything to give it an appealing look but end up paying inflated prices when they are not able to sell those buildings at a profitable price. Here is when emotions come between your business and we all know there is no place for an emotional investor in a real estate business.

Therefore, we always advise our readers to keep a hold on your feelings. Real estate is not an sentimental business. One should not always try to give visual; appeal to the building in order to fascinate the clients but look out for ways how to earn profit from any type of building.

 

🏗️🏘️ Best Places to invest in Kenyan Real Estate

The last decade has seen phenomenal investments in real estate. Projects worth billions of shillings have either been completed or are under construction.

The boom in Kenyan real estate market has not escaped the notice of international players who have found the country to be ideal for their investments.

So, which are some which are some of the Best Places To Invest In Kenya? We take a look at the most preferred hotspots for real estate developers in Kenya with an eye on mid level to lower segments of the market or those who want to buy real estate property in Nairobi.

 

Best Places To Invest In Kenya

Nairobi Satellite Towns

As far as there is a concern of real estate investments in Kenya, the Nairobi city towns including Kitengela, Kiserian, Athi River, Juja and Kangundo Road have become the attractive points for investors.  Land availability in these locations at reasonable prices is commonly the driving force for the investors..

For example, a person who bought an acre of land in 2007 for a million shillings in one of these locations would have seen his investment rise to Sh6.4 million by the beginning of this year.

Most of the Kenyans are investing in land for the future and not necessarily for current construction needs.

However, the lack of an efficient transport system in these areas repeals any gains made on the home purchase or construction.

The developers can’t build homes with the notion that everyone will be driving to work. Kenya’s 70% population still rely on buses and matatus.

Also Read – Buying Home In Kenya For First Time – Tips & Pitfalls To Avoid

Naivasha

The Rift Valley region has been attracting high-end developers. Naivasha is a popular tourist attraction with a scenic landscape, wildlife parks and a lake popular with holidaymakers. These features have put the once dusty town on the global property radar.

When it comes to real estate, the OLX portal lists more than 300 properties within the greater Naivasha area with prices ranging between Sh95,000 and Sh5 million an acre.

Who is unaware of OLX these days, the most popular online advertising portal all over the world. However, the most popular locations are those around Lake Naivasha commanding higher prices than the outskirts.

Also Read – List Of 8 Best Investment Opportunities In Kenya 2018

Mombasa

Despite lying on an island, Mombasa has stamped her authority as a leader in real estate development along the coast. Apart from the well known locations, the area has a growing appetite for middle and low end developments.

For example, Nyali View Park, a cluster of 144 units comprising of two and three bedroom apartments is located near City Mall, Nyali and selling between Sh3 million and Sh10 million in what could be considered a high end location. The homes are popular with first-time homeowners.

The uptake of such low-end development is a trend gaining popularity in Mombasa.

Also Read – Real Estate Property Valuation in Kenya – Buy or Resale

Kisumu

This lakeside city has seen unprecedented development within the last five years. Like Nairobi, the modern real estate trend in Kisumu is to move away from the city’s hub to the outskirts.

Coupled with its strategic location in East Africa, Kisumu City has witnessed an influx of investments as people rush to benefit from various opportunities.

The town is also experiencing the mushrooming of satellite settlements, a sign of growing housing demand following a sharp population increase.

A growing middle class and a recent upgrade of road infrastructure in the area have revived the town’s fortunes and it’s high time for small business owners to race to cash in on its strategic location.

A previous report by The World Bank mentioned Kisumu as the second best place to invest in Kenya to register a business after Mombasa but the most difficult to survive during the initial stages.

Finally, before you dive in, get some professional help and advice from a real estate developer in Kenya.


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