Kenya is a developing country and its future holds a capacity for plenty of investments. From residential properties, e.g. flats, apartments, etc., to plots of land to commercial properties such as offices, retail centers, malls, etc. Many towns and cities have grown and become urbanized due to developments such as infrastructure. A good example is Kiambu Road. This town has a lot of real estate investment opportunities for investors. A lot of people are seeking to buy homes here due to the expansion of the Thika Road highway(A2). It is easily accessible and is a conducive living environment. People are looking to move to areas with such growth and it would be a good idea to invest in such areas.
Before investing in real estate, it is advisable for an investor to do a thorough analysis of the market. Identify areas that have the potential to grow and consider factors such as urbanization. It is also important to note what other competitors are doing. Is this area suitable for a commercial or a residential property? Should I buy land or property for current or future use? Is this property’s value likely to appreciate or depreciate based on the current market patterns? Are more people likely to move here over time? Consider all these.
There are also several property types an investor can choose to invest in. Commercial properties, residential properties, or land investments. Commercial properties include retail stores, office buildings, and industrial spaces, and they are a reliable way to generate rental income. Investors take advantage of the increased demand for such properties in urban areas. Investors also invest in land which involves buying land for future use or resale. The land value may increase over time depending on its location. Residential properties include homes, and apartments, and are also a dependable way to make money. It could be through renting or leasing.
Investors should also consider factors such as construction or maintenance costs. Commercial properties would obviously cost more to put up and maintain since they are meant for many people. They require amenities such as plenty of bathrooms and would also require a large piece of land, e.g. malls.
There are several ways to go about making money from real estate in Kenya.
Rental income is the most popular way to generate profits as an investor while investing in real estate in Kenya. Rental apartments are very common these days, especially in urban areas.
You can choose to build your property from scratch. Another option is to buy from
sellers and renovate it to your liking. Also, you can generate profits from leasing properties and then rent them out as Airbnb, where you charge a certain amount per night. These tend to be more profitable. They are easier to obtain and you don't need a lot of money to begin with.
This is where investors buy underdeveloped properties such as homes and then renovate them to resell them. They generate profits due to their improved nature.
Long-term investments include land investments. This is where investors buy land in underdeveloped areas that have growth potential and then resell it later or build properties on it. It is a good way to make profits since Kenya is experiencing urbanization in so many areas.
Property taxes in Kenya include land rates, rental income taxes, property transfer fees, etc. Landlords must pay taxes for their rental income. Investors can also incur costs during property transfers or obtaining land titles, where they have to pay stamp duty fees. The legal process of transferring property in Kenya is quite effective. Parties involved should aim to involve qualified professionals such as lawyers.
.jpg)
Residential properties such as apartments and homes are a good way to make profits as a real estate investor. Setting up apartments to lease or rent is the most common way investors make money in real estate. They could be luxurious or simple average buildings. Investors can also construct houses to sell or lease as homes to individuals seeking a unit. They could be single units or they might decide to build an entire estate.
Commercial properties such as retail stores, malls, office buildings, warehouses, and industrial spaces are ways to generate rental income. Investors take advantage of the increased demand for such properties in urban areas where a lot of people reside.
When it comes to land banking, investors can purchase underdeveloped or unused land and keep it for future use, construct property, or resell it. This works best when they acquire land in strategic locations or developing areas.
Some of the challenges you should consider before investing in Kenya’s real estate market include;
This is the period before tenants. It could be after the property has just been constructed, before anyone has moved in, or the period in between shifting tenants. This period can delay profits for the investors and they should brace themselves for it.
Maintaining properties can be expensive. There are times when investors will need to make certain upgrades to cope with conditions such as floods or improving security. These maintenance tasks keep coming up and they must be attended to.
Market fluctuations can affect real estate investments. This is due to factors such as the economy, demography, growth, proximity, etc. An unstable economy can affect real estate investments. This is because people aren't able to afford extra costs. Factors such as demography can also define how successful a real estate investment will be. What's the size of the population? What age are most people residing in the area and what are they likely to prefer? It is important to consider all these.
It is important to understand how the real estate market works in Kenya. Consider factors such as demand, and market patterns as well as other indicators such as urbanization patterns and so on. Consider areas with improved infrastructure and high demand for housing. This will guarantee good investment returns. Also, consider areas with potential for urban growth, as those gain value over time too.
The Government of Kenya has put in place measures that encourage real estate investments in Kenya. It also supports the development of affordable housing. There are also some tax benefits to motivate real estate investors. The process of approving real estate projects is now simpler. For example, issuing licenses and construction permits.
Highly populated areas are likely to have more property investment opportunities. From commercial properties to residential buildings. This is because a lot of people will require more space to settle in and work.
When the interest rates of a country are lower, investors are more likely to buy properties and land as compared to when they are higher. This will also create an increase in demand for property, which means that more properties will be sold.
A stable economy most times equals good investment opportunities. When the economy is stable, people are more likely to make investments such as land or property. This is because there is employment and people can afford things beyond their basic needs. When you build a luxurious apartment under such conditions, people are more likely to move in to upgrade their lifestyle.
Real estate investments hold the potential for wealth accumulation. This is due to the appreciation of the property value as well as the growth of equity over time. An increase in value also increases investors’ wealth, allowing them to expand their investments. Before investing, consider the type of investment you would like to make. How much will it cost? What other costs do you need to account for and how does it affect your overall budget? What type of property is your investment of choice? This will make your journey to landing the perfect investment easy peasy. It is also important to note all the risks involved. Every investment has a risk.
If you’re serious about investing in Kenya, consult with a real estate agent or a lawyer first. They are experts and can help you navigate faster, while also mentoring you. Conduct your research, and understand the real estate market. Consult with experts as you join this lucrative world and unlock the real estate success that you deserve.
A: Kenya has a lot of opportunities for investors in real estate. All you need is good planning and strategies to get you the best returns.
A: Yes. The real estate market in Kenya is profitable and it has shown improvement over the past two decades.
A: The investment option to choose will depend on your budget and investment goals. Explore the plenty of options and choose the one that fits your budget.
Book a demo with us to learn how Bomahut can help you improve rent collection and save time on property management tasks.
%401x.svg){kind=icon}
.jpg)
.jpg)
