Tips to Investing in Real Estate in Kenya

Anne Katana

This article will give you tips for investing in Kenya’s real estate. The real estate sector in Kenya has continued to grow despite some challenges. According to Statista, the sector grew by 6.1 percent in the first quarter of 2022, making it one of the fastest-growing sectors in the country. Investing in real estate can be lucrative but requires careful research, planning, and negotiation.

A Guide to Investing in Real Estate

The following are the key things to consider before investing in real estate in Kenya:

Consider Buy-to-Let

One of the ways to earn from real estate in Kenya is by renting out. It is much easier than buying and selling property, and you have a steady monthly income. This is one of the favourite strategies among many real estate investors in Kenya.

After renting out the house, increasing the rent every year is straightforward to reflect inflation and keep pace with competitors in your area. You can always inquire from people already doing this if you need clarification on the value.

Although there are some risks involved, buy-to-let provides a reliable source of revenue in the long term with careful planning.

Choose the Type of Property that Delivers the Best Returns

When you decide to invest in real estate in Kenya, the other thing is to know your investment goals. What are you expecting from this property? Is it for personal use, or do you want to rent it and earn income? All these will help determine the type of property which will deliver the best returns for you.

It’s All About the Location

The most important aspect of investing in real estate in Kenya is location. You have a significant investment if you have a high-value home in the city center. But this is only for some.

What to Consider When Looking for a Location of Property

  • Safe and Secure Neighborhood: You don’t want your property or yourself exposed. A good location should be within proximity to schools, shops, etc.
  • Reasonable Pricing: The property should be within your budget.
  • Good Availability of Utilities: It is very annoying when you think you have a perfect place to realize the water network has yet to be laid.
  • Opportunities for Developments: As mentioned in the previous point, development opportunities can help increase the value of your property in the future.
  • Easy Access: You should be able to access your property quickly without breaking traffic rules.

Some of the best places to invest in real estate in Kenya include:

  • Nairobi’s satellite towns – are Kiambu, Thika, Kitengela, Kiserian, Athi River, Juja, and Kangundo Road.
  • Naivasha
  • Mombasa
  • Nanyuki-Isiolo
  • Kisumu

Consider Buying and Renovating Properties to Boost value.

Investing in new developments is one of many ways to turn a profit. Purchasing an older property at a lower cost and investing in renovations and improvements can also lead to better results.

In Kenya, investing in real estate by buying and renovating properties can be tricky and expensive, but there are some simple ways to make your investment more worthwhile.

Consider that Kitchen renovations will often give you the most bang for your buck (though they’re not cheap). On the other hand, bathroom renovations can easily make people feel at home in their new space.

Residential Property Remains Strong in Kenya

Questions about whether to invest in residential or commercial property can be difficult but are often best answered with information beforehand. ROI (return on investment) sets the residential property apart from business offices. It’s also better for less experienced investors and those without real estate experience.

Business offices are better for having an office on-site or renting out space in your building during non-business hours.

In Nairobi, for example, there are more vacant commercial properties, while residential properties are always full anywhere you go.

Take it slow

When investing in real estate in Kenya, it is essential to take things slow. When new to this, focus on one property you want to buy.

Buy the best land you can afford, where development begins shortly. Look for a good developer who has done similar projects before and get his opinion on what he thinks is a good investment.

They are of great help as they can give you exact figures on what you could earn when the property is completed and how long it will take before you see your money return.

Planning for your future and earning extra income will require patience. However, it does not mean that all is lost. It’s essential to find a suitable property that you can invest in; you will benefit from your hard work and patience in the long run.

Learn more about investing in real estate through buying and renovating properties from those who have been doing it for years. They know precisely what they are talking about and how to ensure you get the best out of your investment.

Reasons to Invest in Real Estate in Kenya

The following are some of the reasons why you should invest in real estate in Kenya:

It appreciates time

As I have mentioned above, you can always go right with this type of investment with proper planning. You will enjoy an excellent ROI (Return on Investment) in the long run and appreciate your property’s value.

The reason is that land prices tend to increase with time, especially if you are buying in good neighborhoods. The best part is that it happens gradually instead of other investments where there can be a massive drop in value.

Looking at the land cost, you will realize that it continuously rises because more people buy and sell property daily.

Real estate has foreseeable cash flow.

It is hard to know when you will see money returning to your account with other investments like stocks and shares. In real estate investing, you can easily predict when cash will flow and how much every month and year.

Suppose you invest in residential property, for example. You’ll get cash flow through rent every month. You can quickly tell when you’ll start seeing a return on your investment.

Real estate is tangible.

Tangible projects are always more attractive than intangible ones. For instance, if you buy stocks and shares in the Coca-Cola example, nobody will see the stock certificates, if there are any. It just gives you a license to trade stocks in Coca-Cola.

However, if you invest in a property, people will see and enjoy it directly. Whether it’s rented out or lived in by the family, people can readily appreciate your hard work and investments when they walk into your house.

Investing In Real Estate Properties is always a good idea. It is the foundation on which all other business ventures are built.

Buying a good piece of land and waiting to appreciate it before selling can be a great investment idea. However, you need not wait until you are ready to resell because one thing I know about this market, everyone wants to buy the property and never sell it.

When you are looking to buy, choose wisely. Looking at the market closely will give you a better idea about its demand and how much it would cost you in the future when reselling.

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Anne is a student of history. She enjoys sharing her passion and experiences with people through blogging. She started to educate and inspire people globally.