How to Invest in Real Estate from the Diaspora in Kenya: A Guide

Written by Beryl Nyathira

December 21, 2022

Kenya has a diaspora population of over 2.6 million people, the majority of them living in the United States and Europe. The real estate market in Kenya is very different from that of Western countries.

In Kenya, real estate investments cater for two distinct market segments: formal and informal. Formal housing is government-approved and built to international standards while informal housing is self-built by residents who might not have enough money to buy or rent a formal house. These informal arrangements teem in Kenya’s informal urban and rural settings.

The real estate market in Kenya has changed drastically over the years as more people are moving abroad for better opportunities. The diaspora population has grown from 1 million in 1990 to 2.6 million today, which means that there are more houses available for sale or rent than ever before because many Kenyans have left their homes behind when they travelled abroad.

Additionally, a significant number of Kenyans living in the diaspora choose to invest in real estate back home in Kenya, as a retirement home, a business investment where they can earn passive income from commercial or residential real estate, have a second holiday home, or even build a home in their rural areas.

This article will explore how the real estate market in Kenya is changing due to its diaspora population and what this means for both sellers and buyers alike.

House price index in Kenya from 1st quarter 2018 to 4th quarter 2020

According to Statista, in Kenya, the house price index grew to 117.37 points in the fourth quarter of 2020. It had been two years since the previous raise. The index peaked in the fourth quarter of 2018 at 127 points, and it has been steadily declining ever since. The source claims that the recovery seen at the end of 2020 was due to a rise in homeowners’ preferences for more modern structures. Prices also increased as a result of a decrease in the availability of new units.

This then presents a couple of lucrative options for Kenyans in the Diaspora wishing to invest in Real Estate. This is despite the ravaging effects of the global pandemic and the economic situation that followed.

A few Examples of How to Acquire Real Estate in Kenya for Investors

Investing in real estate is the process of acquiring and holding an unleased or leased form of property with the intention of renting it out. In this article, we will explore the different ways to invest in real estate.

There are many ways to invest in real estate. One way is by purchasing a property and renting it out. This is called “buy-and-hold” investing

Another way to invest is by purchasing shares in a publicly traded company that invests primarily in real estate. There is a number that is locally available.

A third option is by purchasing shares of a REIT (real estate investment trust) that invests primarily in mortgages and other debt instruments related to housing such as MFA Financial (MFA).

Another option is to purchase a completed piece of residential or commercial real estate for investment from a reputable real estate development company. This is often easy as you get a tried and well-documented process from a trusted and reliable partner, who offers support and professional guidance throughout the process.

The Benefits of Investing in Kenya’s Real Estate Market

Kenya’s real estate market is one of the most attractive in Africa. With a population of over 45 million, and an economy that has been growing at a rate of 7% per annum for the last 10 years, Kenya has an active property market with a wide range of residential and commercial properties available. This includes apartments and houses for rent or sale, shopping malls, hotels, offices and more.<

The country also has one of the most stable political environments in Africa which makes it an attractive investment destination for many international investors who are looking to grow their portfolios.

Benefits of Investing in AirBnB for Kenyans in the Diaspora

Airbnb is a service that connects people who want to rent their houses and apartments with people who want to stay in them. It is a platform where travellers can find accommodation at affordable rates.

Kenyans abroad are increasingly turning to Airbnb because it offers them the opportunity to stay in Kenyan homes when they visit the country and also gives them the chance to earn from their real estate investment by hiring out these homes for short stays, holiday travellers or even business clients who would like the convenience and comfort of home-stays during their business travels.

Additionally, investing in Airbnb provides Kenyans with an opportunity to earn money by renting out their homes during periods of low demand, such as during school holidays or on weekends.

The benefits of investing in Airbnb for Kenyans abroad, therefore, include the following:

  • It offers a chance for Kenyans living abroad to experience a home away from home;
  • It provides an affordable alternative for Kenyan travellers, both business and holiday travellers;
  • It gives Kenyans in the Diaspora an opportunity to earn extra income by renting out their properties during periods of low demand like weekends and school holidays;
  • With the help of a seasoned professional real estate management company like Touchstone Properties, who manage the property, the users, and does the maintenance, as well as

How Much Income Should I Expect as a Real Estate Return On Investment?

One of the most important questions that people ask when they are considering whether or not to invest in a property is ‘how much income can I expect?’

The answer to this question is determined by many factors, and it will vary depending on the location of the property, its size, and the time frame in which it was purchased.

In general, a person can expect to receive anywhere from 3% to 10% of their initial investment per year.

Where Should I Put My Money in my Real Estate Investment in Kenya?

The question of where to put your money in your real estate investment is a difficult one. The answer to this question depends on a number of factors. These factors include the type and location of the property, the timeframe for the investment, and the investor’s risk appetite.

In Kenya, there are many opportunities in both residential and commercial real estate investment. Residential property investments offer higher returns than commercial properties but are also riskier. Commercial properties are also more stable than residential properties but offer lower returns.

Need to invest in Real Estate in Kenya

Talk to Touchstone Properties today and we will get you started on Real Estate, by professionally guiding you and offering you the best investment options. Moreover, we also offer property management services to remove the headache of running your real estate investment in Kenya.

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