Investing in property is a significant decision, especially in a market like Nairobi, where real estate development is booming. However, not all projects are created equal, and due diligence is crucial before committing your hard-earned money.
If you’re considering buying an apartment or house from a developer, here are some essential questions to ask before making a decision.
1. Who Is the Developer, and What Is Their Track Record?
A developer’s history can tell you a lot about their reliability. Ask:
- How long has the company been in operation?
- How many projects have they successfully completed?
- Have they ever had delays or financial difficulties in past projects?
A reputable developer should have a solid portfolio, positive client reviews, and a history of delivering projects on time.
2. What Is the Estimated Completion Date, and How Is It Guaranteed?
Project delays are common in Nairobi’s real estate market, with some developments stalling for years. To avoid surprises, ask:
- What is the estimated completion date?
- What steps has the developer taken to ensure timely delivery?
- What happens if the project is delayed?
A good developer should have a clear construction timeline, proper approvals, and a structured plan to prevent delays.
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3. Who Are the Typical Buyers, and Why Are They Investing?
Understanding the market for the property helps gauge its future value. Ask:
- Are most buyers local, diaspora, or foreign investors?
- What makes this development attractive to buyers?
- How does the project compare to buying land, which is traditionally preferred by Kenyans?
This information can help you assess the demand and potential appreciation of the property.
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4. How Are Payments Structured, and Is Financing Available?
The payment process should be clear and flexible. Ask:
- How is the payment plan structured?
- Is bank financing available, and which banks are offering mortgages for this project?
- Are there discounts for upfront payments or bulk purchases?
A well-structured payment plan can make it easier to budget and finance your investment.
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5. What Are the Legal and Financial Considerations?
Understanding the legal and financial obligations upfront can save you trouble later. Ask:
- What taxes and fees should I expect (capital gains tax, stamp duty, agency fees)?
- If I’m a foreign investor, how easy is it to get approval for repatriating funds?
- What legal safeguards protect buyers in case of project delays or abandonment?
A developer with transparent legal and financial structures is a safer bet for your investment.
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Final Thoughts
Real estate in Nairobi offers great opportunities, but it also comes with risks. Asking the right questions before buying can help you avoid pitfalls and ensure you’re making a sound investment.
Before signing any agreements, do your research, seek legal advice, and make sure the developer can deliver on their promises.
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