At
these tough economic times in Kenya, you may be thinking of indulging yourself
into the real estate business. You may be wondering how much you need to invest
or how much you should have to make a move on you first real estate investment
in Kenya. Real estate investment requires a lot of persistent since it is a
huge investment. Every type of business has its highs and lows and real estate
is not an exceptional. When it is your first time in real estate, you may have
gathered some much advices out there that may or may not work in this industry.
However, real estate investments in Kenya are one of the ways of becoming
wealthy and the industry is very lucrative if done right and resourcefully.
Real
estate in Kenya covers a wide range including buying property for resell or for
occupation, it may involve buying land and diving it into sub portions for
selling among others. It may be land, residential, commercial or industrial.
Whichever part of real investment you want to start up, here are some of the
few things you need to look at to determine how much you may need to have your
first real estate investment in Kenya.
Deciding
on the type of property you want to invest in
As
stated above, real estate investments have a wide range; from commercial to
industrial to residential and to bare land that adds its value over time.
First, you need to decide on why you want to enter into the real estate
investment in Kenya. Buying a piece of land to subdivide later is cheaper than
buying one for comer use or industrial use. When buying a piece of land again
depends on your location preferences. Recently, areas that are considered as
metropolitan or rather near Nairobi CBD may fetch a lot of value on land than
those a little bit far. Such areas include; Juja, Ruiru, Syokimau, Kitengela,
Kikuyu, Kiambu and along Kangundo road. Half an acre goes around 1 million to 3
million depending on the amenities.
Evaluation
of finances
Once
you have decided on the location and the property you want to invest in, the
next step is to evaluate your finances. This is the step that tells you
how much you need to have your first real estate investment in Kenya. There are
two ways of working it our; buying it with the amount you have save up or
mortgage which translates more to a loan. In Kenya mortgage way, owner occupied
type of investments may need less amount of down payment which is usually 3%
value of the property compared to investment properties. Mostly in investment
of residential to rent out, commercial or industrial Kenyan banks may require
20% to 30% of the down payments. Exploring the market on how much the land
would cost {varying in different locations}, the deciding on the type of real
investment you need to enter into, then you can easily decide on which type of
financing you can do.
Hidden
costs
While
you may be having the anxiety starting up real estate investment, you need to
consider any cost that flows with that industry. It will be one of the major
things that determines how much you can invest in real estate in Kenya. Any type
of real investment may require maintenance costs, transfer costs, agent fees,
mortgage payments as well as taxes especially on land that includes land rates
{Land rates are levies imposed on all parcels of land and payable to the county
governments. Upon full payment of all rates, one is issued with the rates
clearance certificate which is conclusive evidence that all rates due and
interest accrued have been fully paid}
Such
costs will greatly influence how much you need to invest in real estate in Kenya.
In
conclusion, while you need to calculate the total amount you need to invest in
real estate, consider any hidden costs as well as places to invest in Kenya and
factors that affect the real estate investment in Kenya. You can also visit our
website https://property254.co.ke/ and
register with us so that you could have a full guide on real estate costs and
affordable agents with vast knowledge.
