Hey there. Are you wondering how you can best make money from real estate in Kenya?
If so, read on..
Making Money from Real Estate in Kenya
As you may have heard, Kenya’s real estate market offers several lucrative opportunities for you (as an investor).
But some opportunities have better returns than others…so you need to be smart if you want to recoup your money fast.
Below are some of the best strategies you can choose if you really want to make money from real estate investment in Kenya:
How to Make Money from Real Estate in Kenya
Buy a property and make your money from Rental Income
Here is one of the best ways of making money from real estate in Kenya (almost passively)
Purchase a property:
- Buy a residential/commercial property in a good location.
Rent it out:
- Lease the property to tenants for a regular income stream.
Manage or hire a property manager:
- Ensure your property is well-maintained at all times and the tenants happy.
Invest in land and earn from Capital Appreciation (buy and hold for sometime)
If you don’t have a lot of money to start, you can start off by buying cheap land in Kenya, holding, and then selling after it has appreciated considerably.
Summary of this strategy:
Buy and hold:
- Invest in land (preferably in a fast growing area) that you believe will increase in value over time. I will share examples of fast growing towns in Kenya in a subsequent article..
Sell for a profit:
- When the property’s value has appreciated significantly, sell it for a profit…you can re-invest this money in another land or if enough, buy/build a rental property..
Do not compromise on location if you want to go that route:
Location….location…..location….areas like Nanyuki and Junja are very fast growing from data we have in our hands.
Of course, your other awesome option is purchasing a larger piece(such as an acre) then subdivide it into smaller plots and sell..you can earn over 100% profit if your plots are in a very prime area…many of you know this
Buy a house, Fix and Flip it for quick cash
If you are very liquid and want to make a quick return, do this:
Purchase houses/homes that are on distress sale:
- Buy houses/homes that need repairs or renovations at a discounted price.
Renovate and improve:
- Upgrade the house/home (repair and repaint, even add a cheap fence if it was not there) to enhance its value and appeal.
Sell at a profit:
- Resell the property for a higher price than you paid.
Why this direction?
It is everyone’s dream in Kenya to own a house/home and many people are going this route since building from scratch has become expensive
Go for Large Scale Real Estate Development
If you can secure good capital, building and selling real estate properties (rentals and commercials) can be lucrative..
Here is how it works:
Acquire land:
- Purchase undeveloped land in promising areas.
Obtain permits:
- Secure the necessary permits as well as approvals for building/construction.
Develop properties:
- Build new residential or commercial properties.
Sell or rent:
- Sell the completed properties (you can rent them out for income too).
Invest in Real Estate Investment Trusts (REITs) and enjoy passive income from real estate
Otherwise, if you want to get 100% passive income from real estate, and you don’t have a lot of money to get you started, REITs are a creative way of making your dream come true..
This strategy at a glance:
Invest in REITs:
Purchase shares in companies that own and operate income-producing real estate such as Acorn Holdings Limited (builders of affordable student hostels marketed as Qwetu).
You do this through the NSE(Nairobi Securities Exchange)
In summary:
Diversify your portfolio:
- REITs offer a way to invest in real estate without owning individual properties (best part is that you earn passively).
Professional management:
- REITs are managed by experienced professionals who handle property management and investment decisions so your risk is minimal.
Tips for Success if you want to invest in real estate in Kenya:
- Do your research: Understand the local real estate market, trends, and regulations.
- Build a team: Work with experienced real estate agents, lawyers, and property managers.
- Financial planning: Create a solid financial plan to cover upfront costs, ongoing expenses, and potential risks.
- Consider location: Choose properties in areas with strong demand and potential for growth.
- Stay updated: Keep informed about market changes, economic conditions, and industry trends.
Final words
By carefully considering these strategies and following sound investment principles, you can capitalize on the opportunities offered by Kenya’s real estate market.
Talk To Us If You Would Want To Be Helped In Your Real Estate Investment Journey