This article will give you the best tips on investing in real estate in Kenya. The real estate sector in Kenya has continued to grow. According to the Kenya National Bureau of Statistics (KNBS), the sector experience growth, for example, from 10.5% in 2000 to 13.8% in 2016.
Have you ever wondered how some investors make enormous amounts of money in real estate and seemingly always get it right? They always follow some tips, which is why I made this article on investing in real estate in Kenya. To guide you when navigating this lucrative sector.
A Guide to Investing in Real Estate
The following are the key things to consider before investing in real estate in Kenya:
1. Consider Buy-to-Let
One of the ways to earn from real estate in Kenya is renting out. It is much easier than buying and selling property, and you have a steady income monthly. This is one of the favorite 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 are not sure about value.
Although there are some risks involved, buy-to-let provides a reliable source of revenue in the long term with careful planning.
2. Choose the Type of Property that Delivers 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 out and earn income from it? All these will help determine the type of property which will deliver the best returns for you.
3. It’s All About Location
The most important aspect of investing in real estate in Kenya is location. If you have a high-value home in the city center, then you have a great investment. But this is not for everyone.
What to Consider When Looking for Location of Property
- Safe and Secure Neighborhood: You don’t want your property or yourself to be left 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 hasn’t been laid yet.
- 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 easily without breaking traffic rules.
Some of the best places to invest in real estate in Kenya include:
- Nairobi’s satellite towns – Kiambu, Thika, Kitengela, Kiserian, Athi River, Juja, and Kangundo Road.
4. Consider Buying and Renovating Properties to Boost Value.
Investing in new developments is not the only way to turn a profit. Purchasing an older property at a lower cost, then investing in renovations and improvements can also lead to better results.
Investing in real estate in Kenya by buying and renovating properties can be tricky and expensive, but there are some simple ways to make your investment more worthwhile.
Consider the fact 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 provide an easy way of making people feel at home with their new space.
5. 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 the better option for less experienced investors and those who don’t have any 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.
6. Take it slow
When it comes to investing in real estate in Kenya, it is important to take things slow. When you are new to this, try and focus on one particular property you would like to buy.
Buy the best piece of land that you can afford, where development takes place 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 coming back to you.
Planning for your future and earning extra income will require patience. However, it does not mean that all is lost. It’s important to find a good 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 exactly what they are talking about and how to make sure 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:
1. It appreciates with time
As I have mentioned above, you can never go wrong with this type of investment with proper planning. You will enjoy a great 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 the right neighborhoods. The best part is that it happens gradually instead of other investments where there can be a huge drop in value.
When you look at the cost of land, you will realize that it is always rising because more people buy and sell property every day.
2. Real Estate has foreseeable cashflow
It is hard to know when you will see money coming back into your account with other investments like stocks and shares. In real estate investing, you can easily predict when there will be cash flowing in 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 easily tell when you’ll start seeing a return on your investment.
3. Real Estate is tangible
Tangible projects are always more attractive than intangible ones. For instance, if you decide to buy stocks and shares in 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 easily appreciate your hard work and investments when they walk into your house, for example.
Investing In Real Estate Properties is never a bad idea. It is the foundation on which all other business ventures are built.
Buying a good piece of land and waiting for it to appreciate 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.
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.