Real Estate Property Valuation in Kenya – Buy or Resale
Real Estate Property Valuation in Kenya – Buy or Resale
The expected charges of construction plans that are approved by Nairobi City County in 2017 between January to May cut-price to Sh105.6 billion from Sh126.3 billion in last year which has been reported by the Kenya National Bureau of Statistics (KNBS). However, many assume that it will speed up and went down faster once the election-related activities end.
Kenya’s real estate and as well as the construction market has seen growth in property value the last 7-years. It also contributes to the Gross Domestic Product (GDP) increases from 12.6% in 2010 to 13.6% in 2016. In quarter 3, of 2017, there was a rise in housing prices by 0.4% as compared to 1.0% improvement in quarter 2, 2017 reported by the Kenya Bankers Association.
The decrease or drop down of the industry means that investors need to consider various valuation Methods for Real Estate Property such as; housing expenses, dropping prices of building material, employment opportunities and more crucial is county governments who will be looking forward to fulfilling their election pledges.
At HayerOne, we have experts to advise you for your next Real estate Property Valuation in Kenya 2018:
Take your time, it’s worth the money.
The time factor is essential in this process. Watch out for impulse buying, even if the chance never goes twice.
Think, consult, take your time.
The house (or apartment) should be ideally located, depending on your needs
Consider your future purchase in its environment, so that your dream does not quickly turn into a nightmare.
Is there a nearby school for your children? A nursery? Is the work to home journey realistic? What are public transport, present and future? Learn about the urbanistic prescriptions (to avoid disenchantment) or ask the neighbours.
The price of the property: negotiate, negotiate, negotiate
When you have found the house or apartment of your choice, study the price then negotiate.
Compared to the neighborhood, in relation to the description of the property, the number of rooms, the state of the property, the history of the owners and their intentions…
Note the arguments that will allow you to lower the price. If the owner leaves Kenya, he may have to hurry up. Brings any benefit to your budget.
Your budget to pay all the expenses!
Are you sure you have defined your budget? Beware of hidden costs!
An example: if you plan to buy an apartment in a building at Nairobi, Kenya, ask for a copy of the last general meeting of the building. You might discover a bad surprise as next and important renovations for the elevator.
And then, do not forget the registration fees, the notary fees, the future property tax, insurance (fire, balance remaining due) that will inflate your overall budget.
What are Unexpected financial support? Bonuses!
Federal, regional, communal premiums… It’s always good to take. Not to mention tax benefits and other subsidies. Regional sites give you information that should be consulted regularly. It is a moving matter, especially in Nairobi City.
Get professional help to evaluate your property
For such a large amount, for the purchase of your life, surround yourself with professionals. Take the time to choose the ones that will help you best at every step.
Whether an architect, an entrepreneur (for the construction of a house): visit their sites, interview their customers, make sure of their solvency. Did you know? Under certain conditions, the first notarial advice is free.
A good real estate developer in Kenya, will find for you the rare pearls in his address book!
Did you know? There are events where you get to meet the “candidate-builders” and architects. Even if the project is still vague in your head, this is an opportunity to find great ideas and meet specialists!
The rate is crucial!
The rates are low for the moment, the press has echoed. Then you have to refine and know if you want a fixed or variable rate. If you do not find it, your bank agent can inform you.
To give you a good first idea, do a free simulation.
Finance your real estate property by various means to maximize value
There may be other sources of funding that could reduce the amount to be financed by a credit. A savings (a wool stocking almost indispensable!), An inheritance, a group insurance… Or the sale of your current property. Have you thought about it? Take advice from your bank agent.
Related Post – List Of 8 Best Investment Opportunities In Kenya 2018
What are the benefits of investing in commercial real estate?
The vitality of commercial real estate in kenya appears as an option not to neglect facing a residential real estate often perceived as less risky but not always more advantageous.
- Financial stability – because the commercial space is a source of turnover for the occupant whereas for the tenant of a home, it is above all the cost. The payment of rents is, therefore, more assured with a commercial tenant because it derives benefits from the local user.
- Rental stability – because the rotation of tenants is less with a commercial space, the latter having a particular importance for the sign that is implanted there. Indeed, the trader is often attached to his location because of the presence of his client. For you, having long-term tenants is an advantage, it significantly reduces the costs of managing the property and you lose less time in this management.
How do you determine the value of commercial property in Kenya?
In commercial real estate, there are a few generally accepted methods for appraising (or valuing) real property. The three most common are the Cost Approach, the Sales Comparison Method, Gross Rent Multiplier approach and the Income Approach.
This valuation method considers the cost to rebuild the structure from scratch, taking into account the current cost of associated land, construction materials, and other costs.
Sales Comparison Approach
Also known as the “market approach,” this method relies heavily upon recent sales data for comparable properties
Income Capitalization Approach
This valuation method is based primarily on the amount of income an investor can expect to derive from a particular property.
Gross Rent Multiplier approach
This method is generally used to identify properties with a low price relative to their market-based potential income.
To calculate the value of a commercial property using the Gross Rent Multiplier approach to valuation, simply multiply the Gross Rent Multiplier (GRM) by the gross rents of the property. To calculate the Gross Rent Multiplier, divide the selling price or value of a property by the subject’s property’s gross rents.
Renovating your Home – Increase Value Of Your Real estate property in Kenya
Do you want to renovate your home to make a profit on resale? Contrary to popular belief, not all pieces deserve to be revamped. Here’s what you need to know before renovating your home to increase its value.
Choose your work
First of all, be aware that many places in the house are not worth renovating because they do not have the power to change the value of your property. It is not worthwhile for you to invest your time and money. This is the case for the following works: (the numbers next to it mean the percentages of chances that the value of your property increases.)
- Pool: 10-40%
- Landscaping: 25-50%
- Paved driveway: 20-50%
- Skylights: 0-25%
- Interior or exterior paint: 50-100%
- Indeed, it seems that the two champion pieces
- Kitchen: 75-100%
- Bathroom: 75-100%
- These two has the power to increase the price of a property. Whether it’s installing an island, expanding a room or adding a ceramic shower, renovations in these two rooms are a winning choice.
Why renovate according to buyers’ tastes?
Similarly, you must know how to spend smartly and renovate according to the taste of buyers and not your own. In addition, some less expensive renovations must be made in order not to lower the selling price of your property or to repel the buyers by frightening them – a flowing roof, for example.
If necessary, consult a professional in interior design or home staging; this could save you money and prevent you from “overdrive”. Also be sure to plan your work in advance; this will leave you more time to find your materials at a discount.
Finally, when buying property in Nairobi or re-selling, also pay close attention to the presentation of the property. It’s proven that a home that smells good and is well-appointed is far more likely to sell than a messy, messy house.
Remember that you only have 90 seconds to seduce a future buyer. So be sure to make a good impression by presenting a house that smells good and is well appointed.
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