Aspiring to venture into Property Business in Kenya? Then Find below our Top 6 tips that will help you off to a good start in real estate investing.
How to Start a Property Business in Kenya?
Always Start Small & Low
There has been a common truism in the property business in Kenya which does say….
‘’Always don’t wait to buy a real estate Property, Just Buy Now and Wait if you indeed want to venture into the lucrative Property Business in Kenya!’’
“Majority have lost out on making a fortune in real estate investments mainly because they think the money they have is too insignificant to get them into the property business in Kenya.’’
Actually, Most of them don’t know that there exist various investment options and opportunities they can fully exploit upon seeking guidance from a certified real estate agent.
To explain the argument in a better way, let us consider a case where two individuals A and B with Sh100, 000 each who both want to own a home in 10 years.
Individual A thinks that it is wise to save until he can raise the capital which is required to own a home or start a property business in Kenya while Individual B, Opts to join a land-buying venture with his sh100, 000, definitely B will be better off as his stake in the venture will have risen over the years since the value of land always appreciates.
“There exists a lot of financing options to people with an interest in the property business in Kenya, ranging from affordable bank loans to mortgages and micro-finance savings packages.
Just ensure that the income or appreciation value of your property surpasses the interest on the loan to avoid burning your fingers later on,” a real estate agent advises!
Normally, you don’t need to buy an apartment complex right out of the gate. It is okay to start small, even if it is with REITs or partnerships. Just start.
PROPERTY BUSINESS IN KENYA, IS NOT A GET-RICH-QUICK SCHEME
Majority of real estate investors in Kenya find the allure of buying property now and opt to sell it after a short time. However, the two professionals caution against getting into real estate with such an attitude because, like any other Property investment, there is always an element of risk involved.
“One virtue that will prove very vital in this business is patience, which goes hand in hand with the principle of delayed gratification.
Anybody seeking to make a fortune in the property investment in Kenya sector, actually he/she should be prepared to work hard and learn over a long time to understand how Kenya’s Real Estate market works,” a leading Nairobi Property Agent says.
REMEMBER NEVER QUIT YOUR REGULAR JOB JUST YET
If you are planning to venture into the property investment in Kenya sector, quitting your regular job might not be a very sound move, especially considering the fact that it is the job that provided the initial capital for your investment.
According to a leading real estate agent in Nairobi, most people who quit their jobs to concentrate on real estate investing are oblivious of the fact that they can get professionals to handle the management part of their property investments.
“Property agents and land economists have obviously been in the industry much longer, and are thus more experienced in competently managing your Property investments,” he says.
Depending on professionals saves you time since it only requires you to Just play a supervisory role.
GIVE DUE DILIGENCE A PRIORITY BEFORE BUYING A REAL ESTATE PROPERTY IN KENYA
As a matter of fact, any average Kenyan looking to get into real estate investing is always paranoid. This is due to increased cases of people buying land whose title deeds are later revoked in many parts of the country.
“Before, we have had people asking us to do a title deed verification when their investments have already gone up in smoke.
By then it is too late, and there is little we can do. To avoid being sucked into such unscrupulous deals, we advise land buyers to consult professionals, who will carry out due diligence to verify the legitimacy of the property in question,” says Nairobi real estate agent.
Even if you are buying a property from a family member, a friend or a person you think you know very well, resist the temptation to skip carrying out due diligence as unforeseen circumstances could later lead to life-long scarring.
GET YOURSELF AROUND WITH THE RIGHT TEAM
When starting your property investment in Kenya Journey, it is always advisable to build a team of professionals which you can easily consult before making any move, especially one that involves high financial expenditure.
A property valuer, a conveyancer, an accredited contractor and a loan adviser are a few of the professionals whose advice you cannot afford to miss out.
While adding the professionals to your payroll might sometimes seem costly at a glance, but a closer look will reveal that it actually saves you money.
Mr. Kibe, the CEO of a leading real estate firm in Nairobi, pointed out a specific case of a client who wanted to buy a house in Nairobi valued at Sh10 million, a week before the interview.
Before he could seal the deal was closed, however, the prospective buyer decided to call the valuation firm for advice.
“Our team visited the property and advised the client not to pay a cent more than Sh7 million for the property. He later sealed the deal for Sh6.5 million. While we only charged him 0.25 percent of the property price for our services, he ended up saving a huge sum,” Mr. Kibe says.
INVEST IN THE WORST HOUSE IN THE BEST NEIGHBOURHOOD
Getting your Real Estate Property in an ideal and Prime Location should be a priority
This is due to the fact that the property investment in prime locations is measured not so much by the cost of construction, but by the value and high appreciation rate of the land on which the property sits,” Mr Moses says.
Investing in a simple establishment in a high-end neighborhood always pays handsomely.
However, the reverse can be the worst mistake a property investor could ever make. Buying the best house in the worst neighborhood, he warns, will always turn out to be disastrous as the value of the land underneath hardly appreciates, and future buyers will most likely shun the property because of the neighborhood.