How to Invest in Real Estate in Kenya and Make Money

If you’re considering investing in the real estate business in Africa, then Kenya is among the best African countries to venture in according to investors. The country boasts of a fairly developed economy as well as an educated and knowledgeable young population. Because the Kenyan population is steadily increasing, the demand for housing is equally increasing. As a result, the real estate business has become one of the best investments in Kenya.

According to the various research works, Nairobi alone has an annual demand for over two hundred thousand housing units. This post will focus on how to invest in real estate in Kenya and make good money out of it.

Briefly, here’s what it will cover: 

  1. Why Invest in Real Estate in Kenya?
  2. What are the best places to invest in Real Estate in Kenya?
  3. How to Invest in Real Estate in Kenya
  4. Is Real Estate a Good Investment in Kenya?
  5. The Bottom Line of Real Estate Investment in Kenya

Why Invest In Real Estate In Kenya?

There are many justifications why you should consider investing in the Kenyan real estate business. They include:

  1. The real estate sector in Kenya has substantially grown over time. And as a result of this, property prices have gone up assuring investors of good returns on investment.
  2. The Kenyan government has put in place a housing policy under the Big Four Agenda steered by President Uhuru Kenyatta. Intended to be his main legacy undertaking. He plans to help construct over 500 thousand housing units using the public as well as private partnerships.
  3. Kenya promulgated a new constitution in 2010, and Devolution was the greatest part of the new constitution because it seized power from the capital city Nairobi to the local areas. A lot of people who initially stayed in Nairobi are going back to the local regions to work with the devolved counties. This has steered to an increase in demand for housing units, and housing prices.
  4. The Kenyan economy is undergoing growth that is past the global average. It has grown by 5.7%, a tremendous growth as compared to most developing countries’ economic growth.
  5. Real estate value is ever-increasing, and that makes it the most solid immunity that human ingenuity has formulated.

When it comes to advanced countries such as the United States of America and the United Kingdom, interested people in the real estate market have several alternatives. Ranging from house flipping, peer-to-peer lending for real estate, investing in real estate firms or REITs, to investing in crowdfunding projects such as Fundrise and RealtyMogul. Whereas, in Kenya and the remainder of Africa, all these alternatives are not accessible.

In Kenya, there isn’t diversity in investing in RIETs. Surely, the only REIT recorded in the Nairobi Stocks Exchange Market is the Stanlib Fahari Reit. However, it would be wise to research widely on it before you invest your capital. The other recorded real estate firm is Home Afrika. But it’s fairly minor and not worth giving much thought 

What Are the Best Places to Invest in Real Estate in Kenya

Some of the best places to invest in real estate in Kenya, and be assured of making good money include:

  • Nairobi
  • Naivasha
  • Mombasa
  • Kisumu
  • Nanyuki
  • Isiolo.

Investing in real estate in the above-mentioned places has over time proved to offer a quick capital refund and good returns on investment.

How to Invest in Real Estate in Kenya

Using the below investment best practices, you will be able to invest safely, and profitably in the Kenyan real estate market.

Get a Proper Piece of Land

Owing to the complicated nature of investing in real estate using the capital markets in Kenya, the next alternative you can utilize is to purchase land and construct the properties on your own. However, in doing this you have to be cautious, due to the sensitive nature of land in Kenya. Some other land buyers have lost their capital through purchasing already bought land. So it is advised that you use more than one law company when approving all the documents involved in the process 

It’s undoubtedly true that Nairobi county and its neighborhood provide the best real estate opportunities to invest in here in Kenya. Nonetheless, it’s suggested that you also consider places outside the capital city. Why? Because of the expense involved. Land in certain areas of Nairobi goes at over $10 million an acre, which is relatively high as compared to other places Kisumu, Mombasa, Nakuru, and Naivasha.

Construct Affordable Houses

One widespread blunder many real estate investors do in Kenya, is to construct extremely expensive houses. Contrary to the real market demand. Property listings in Nairobi show properties going for many million dollars. Yet, the Kenyan average salaries are below $1,000. What this means is that the majority of the residents can’t pay for the rent or purchase the properties. Most successful investors here, are those who saw this gap early and endeavored to fill it by constructing affordable houses.

Choose a Good Contractor

Kenya has many good real estate contractors. However, it is often wise to carry out your research before you come to terms with one. The next thing upon getting your preferred contractor is to ensure that you sign a binding contract with them. To secure dealings as well as your investment. In case your project is vast, you should implement it in phases to avoid uncalled-for strains.

Promote Your Properties

Sticking to the above best practices will surely deliver your project in time, and safely. Afterward, you’ll be expected to start marketing the project to potential customers yourself. Or you can choose to employ the services of real estate agents. That is available to enable you to sell the project. Some of the famous real estate agents in Kenya include Lloyd Masika, Villa Care, as well as Hass Consult.

Is Real Estate a Good Investment in Kenya?

If you’re interested in investing in the real estate market in Kenya, then this is a necessary question? And its answer is, like in any country in the world, there aren’t specified returns on real estate investment in Kenya. It largely depends on your project location, pricing as well as a marketing strategy. However, several real estate investors in Kenya have made twice as much of their capital in ten years by investing in underdeveloped places.

The Bottom Line of Real Estate Investment in Kenya

If you need to invest in a dependable sector that can enable you to reap good returns in Kenya; then real estate is one worth considering. Nonetheless, unlike in established countries, the real estate investment procedure in Kenya is a bit tricky and hazardous. A lot of investors have lost their hard-earned money or encountered lengthy uncertainties in their bid to come up with real estate businesses. Many good investments have also been demolished by the government due to the lack of necessary procedures.

So it will be wise to research thoroughly on the investment viability, the best location, on-demand sizes, the best contractors, the best promotion strategies, as well as the legal requirements. Then invest safely, and watch your money work for you.

About the Writer

Fredrick Musungu is a freelance writer, blogger, and copywriter who helps businesses, and individuals earn more through promotional, and informational content online at the Liberating Freelance Blog. He’s a contributing writer at Dot Writer as well as the Linked In Pulse. He also writes about health at FMHealthwise.