6 Things to Consider Before investing in Real Estate in Kenya

By Vera Shawiza / April 5, 2019

The real estate sector is increasingly becoming one of the most attractive investment avenues in Kenya. This is due to a bulging population, coupled with increased urbanization and growing disposable incomes for most households.

Experts estimate that the industry will keep growing steadily in the foreseeable future. Investment in residential units targeting mid-range and high-end markets has remained lucrative for a long time.

With the government currently initiating various projects to realize affordable housing for Kenyans, the lower middle-income segment of the residential market presents attractive opportunities for investors. Before taking the broad step of venturing into the real estate market in Kenya, here are some points that might be helpful:

Check your finances

This can be as simple as listing all your assets, including incomes and work out your expenses.

This will give you an idea of how much cash you have available to invest. Do not immediately assume that you cannot afford to invest. As long as you have a stable and reasonably good paying job with solid employment history, you should not have a problem getting a loan

Set your goals

What are you looking to achieve? What does success look like to you? Property investors generally invest in property to secure their financial future or to be free to do what they want, when they want it.

In order for you to achieve your goals, you must first articulate what your goals are. More importantly, you need to set a deadline as to when you want to achieve these. Then you can work backward.

Start budgeting

Budgeting is the only way to ensure that you are able to balance your income and expenses. It allows you to see where you have been spending your money and helps you to plan for bigger expenses down the line.

Make sure to set this up even before you start looking for a property.

Create a purchase plan

What does an ideal purchase plan look like?

It should facilitate your goals of growing your portfolio to a point where it is producing the growth or income you are aiming for. It should serve as a structure for you to stay in the game.

Here is an example of a purchase plan you can follow:

Define your strategy
Set up your criteria
Do your research
Cull your list
Get appraisal
Do your due diligence
Make an offer and negotiate

Location

The trick here is the more central the location, the greater the demand. Investing in a remote place that is inhabited by locals will not help, it will be a waste of money, resources, and labor. As an investor, you must consider the location’s proximity to transportation, social amenities like hospitals, learning institutions, and business centers.

Be informed

Use the tools available to you to make an informed decision. Knowing the market can be key to making the right investment choice.

Being informed also means being wary of getting rich quick schemes and property peddlers. If someone is promising you guaranteed returns and overnight riches, walk away; the only person getting rich is them.

There is no such thing as a property psychic and while there are tried and true methods to research, no one can make guarantees. Understanding your tolerance for risk will help you shape how much you’re willing to take on over the shorter and longer term.

It is also important to seek professional guidance from an established and reliable real-estate agent such as Cytonn Investments who will offer all the required information on how to go about the process of investing in the Kenyan real estate market.

About Vera Shawiza

Vera Shawiza is Soko Directory’s in-house journalist. Her zealous nature ensures that sufficient and relevant content is generated for the Soko Directory website and sourcing information from clients is easy as smooth sailing.Vera can be reached at: (020) 528 0222 or Email: [email protected]

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