When selling a property, getting the best deal is what every seller wants. However, the challenge is that everyone thinks they are the best buyers in town. As a seller or homeowner, it’s important to understand who you are dealing with and how they will offer you value for your property.
Types of Property Buyers in Kenya
Property investors come in all shapes and sizes. The key to getting the best deal for your property is knowing who you are dealing with and how they want to buy your home.
Here is a list of the most common types of property buyers in Kenya:
1. First-Time Buyers
As the name suggests, first-time buyers are those who have never bought a property before. Many of them are middle-class families doing the best they can to secure their future.
First-time buyers are looking for low-cost housing options. They are less likely to buy a luxurious property as their priorities are based on the value they will be getting for their money.
They often lack experience when it comes to buying properties. As such, if you have an experienced agent representing you, your chances of making the best deal are higher.
2. Buy-to-let investors
These are investors who purchase properties with the sole intention of renting them out. They tend to prefer fairly priced properties that generate good rental yields. Such homes can be used as long-term investment plans since they provide an easy flow of monthly cash, besides making profits on capital appreciation over time.
Buy-to-let investors often view the value of a home in terms of rental yields. This means they are likely to offer you less for your property than what another investor would be willing to pay.
For buy-to-let investors, the monthly cash flow is an important factor when buying houses. As such, they will be interested in quick sales that require minimal renovations after purchase.
3. Commercial Investors
A commercial investor is someone who purchases homes to use as short-term accommodation for workers or students. They are identified by their preference for properties that have good access to public transport and other amenities. For this reason, commercial investors often buy cheap houses at the edge of townships or in less developed areas.
Commercial investors usually require a quick turnaround. Such a buyer is willing to offer you a good price for your house provided you settle the deal fast enough.
They are typically looking for properties with high resale value in the next 2 years to profit from quick capital appreciation. Since commercial investors tend to buy on shorter time horizons, it may be hard to agree on a deal where you can get the right price for your property.
4. Fix-and-flip Investors
The fix-and-flip investor is someone who buys homes to refurbish and sell quickly at a profit. They buy cheap properties with good layouts and locations to renovate them within a short period before putting them on the market.
Fix-and-flip investors often purchase older homes that require significant renovations before being sold. These investments are made with the expectation of a quick capital appreciation.
They value your house based on what you will be willing to pay for it so they can turn around and sell within a short period. This means you have to have a great strategy when negotiating your deal to not overpay for the property.
This type of home buyer is slowly gaining momentum in Kenya. However, most investors do not trust this method of investing in property. This is mainly due to the long time taken to refurbish a house before selling it on.
5. Luxury Buyers
Luxury buyers are people who like to buy top-of-the-line properties in the best areas. They are willing to spend big bucks on high-end housing options due to their desire for status and comfort.
They view your property in terms of how luxurious it is compared to others in the same area, which means they will offer top dollar for any property in a great neighborhood.
For this group of buyers, the location and neighborhood are major factors when considering your home. Therefore, luxury buyers will be more likely to offer you the best deal if you have a luxury house in a prestigious area.
Luxury Buyers tend to prioritize properties with outstanding features. Therefore, they are likely to make lowball offers if your property has many of their desired features.
Real estate investors don’t always fall under these categories. Some can be identified by their willingness to invest in the above-mentioned properties depending on market conditions and personal taste.
Before you settle on an offer, it is important to know who is behind the deal so you can get a fair price for your property.
You should also consider several factors when identifying the type of investor who wants to buy your home. These include:
- The number of months they have been looking for houses before making an offer
- What they expect from the sale (quick cash or long term appreciation)
- How much they are ready to pay for your home compared to other buyers in the same area
- The amount of money they plan on spending on renovations before selling your house.
Understanding what type of investor you are dealing with will help you choose an offer tailored to meet your needs. You should also consider the investment strategies of different investors like fix and flip, luxury buyers, and real estate investors to know if your home is likely to attract their interest.