How to Make Money with Real Estate in Kenya

Written by Beryl Nyathira

December 14, 2022

Real estate in Kenya can be used to make money in several ways:

Investing in rental properties:

Renting out a property is an option you can take advantage of when you purchase a property. You can generate a steady income from this, especially if you are in a desirable location.

The following steps will help you make money by renting out property in Kenya:

  1. Purchase a rental property: You’ll need to find and purchase a rental property that can be rented out. Residential or commercial properties can include houses, apartments, and other types of properties.
  2. You may need to make renovations or improvements to the property in order to make it more appealing to potential tenants. Painting, replacing flooring, or updating appliances could be part of this process.
  3. Calculate the rent you want to charge based on factors such as the property’s location, its condition, and its features, as well as the demand for rental properties.
  4. Advertise the property to potential tenants once it’s ready to rent: Once the property is ready to rent, it should be advertised to potential tenants. Listings can be created on rental platforms or websites, ads can be posted on social media or in local newspapers, or an agent can be hired.
  5. It is very helpful to carefully screen potential tenants in order to ensure that you are renting to a responsible and reliable person. It may be necessary to check references, credit scores, and employment records.
  6. You will need to establish a system for collecting rent on a regular basis once you have found suitable tenants. Rent may need to be collected in person or automatic payments may want to be set up.
  7. Keep the property in proper condition: For a landlord to retain and attract tenants, it is essential that the property is in proper condition. Making repairs or improvements as necessary, and responding to tenants’ requests or concerns promptly, might be part of this.

The process of managing rental properties can be time-consuming and requires a certain level of expertise. The responsibilities of being a landlord can be overwhelming, so consider hiring a property management company to take care of these tasks for you.

Flipping properties

This involves purchasing a property, renovating or improving it, and then selling it at a profit. Due to the significant time and financial investment required, this can be a risky strategy.

The following steps will help you make money flipping property in Kenya:

  1. Flipping a property: Look for a property that needs renovations or improvements and is likely to increase in value once the work is completed. These properties can be found through a variety of channels, such as real estate agents, online marketplaces, and property auctions.
  2. Inspect the property carefully to determine if any renovations or improvements are needed and the cost of those improvements. If the property meets the criteria for flipping and you can make a profit on the sale, you will know whether it is a suitable candidate.
  3. Prepare a budget and timeline for the renovations and improvements, taking into account the cost of materials, labour, and any additional expenses.
  4. Obtain funding: You may need funding to cover the cost of renovations and improvements depending on the scope of the project. You may need to take out a loan, use your savings, or look for investors to obtain funding.
  5. Invest in renovations and improvements: Once you have the funding, renovate and improve the property. It may be necessary to hire contractors, purchase materials, and manage the project to keep it on track and within budget.
  6. When renovations and improvements are complete, it’s time to sell the property. If you want to advertise the property through other channels, you can work with a real estate agent. You can list it on a real estate platform, or work with a real estate agent.

When you’re a beginner at real estate investing, flipping a property can be a risky and complex process. Before making any investment decisions, carefully assess the property and conduct thorough research. Be prepared for the possibility that the project may take longer or cost more than expected.

Investing in real estate development

A new real estate project such as a residential or commercial building can be developed by investing in it. While this is a more capital-intensive option, it can offer higher returns.

You can earn money by investing in real estate development in Kenya by following these steps:

  1. Discover a real estate development project with a positive return on investment: Find a real estate development project that may generate a positive return on investment. Finding a location with high demand for newly constructed residential or commercial properties, or locating a property that can be repurposed or renovated is one way to do this.
  2. Market research: Research the local real estate market to determine the demand for the type of property you are planning to develop, as well as the potential competition. Assessing the feasibility of the project and establishing a realistic budget and timeline will help you determine the feasibility of the project.
  3. Obtain funding: Depending on the scale of the project, you might need to secure funding for the development. An investor might assist you with this by lending you money, using your savings, or seeking out a loan.
  4. Permits and approvals: You must obtain the necessary permits and approvals from local authorities before you can begin the development process. There are several kinds of permits, such as zoning approvals, building permits, and environmental impact assessments.
  5. When you have funding and the necessary approvals in place, you can begin the development process. As part of this process, contractors may be hired, materials may be purchased, and the project will be managed to stay on schedule and within budget.
  6. You can sell or lease the property once the development has been completed to generate a return on your investment. It is possible to do this by listing the property on a real estate platform, advertising it, or working with a real estate agent.

Real estate development can be a complex and capital-intensive process, so it’s wise to carefully assess the feasibility and conduct thorough research before committing to any investments. Likewise, you should prepare for the possibility that the project will take longer than expected or cost more than you anticipated.

Consider investing in REITs

A REIT is a type of investment vehicle in which investors can buy shares in a portfolio of real estate assets, including commercial properties, residential properties, and mortgages. Investments in real estate trusts allow investors to gain exposure to the market without having to own and manage individual properties.

The following steps will help you make money with Kenyan REITs:

  1. Look for REITs with a significant presence in Kenya or that are focused on the Kenyan real estate market. REITs can be found through a variety of channels, such as financial advisors, online brokerages, or REIT directories.
  2. Make sure you carefully research the REITs you are considering. Pay attention to factors like the quality and diversity of properties in the portfolio, the management team’s track record, and the potential for risk and return.
  3. Identify your investment budget: Decide how much money you want to invest in REITs, taking your overall investment objectives and risk tolerance into account.
  4. Shares of REITs can be purchased via a brokerage account or other investment platform once you have selected one.
  5. Keep an eye on your investments: REITs can be volatile, so you should monitor your investments and make any necessary adjustments as market conditions change.

Investors should be aware that REITs carry a certain level of risk, and it’s critical to carefully consider their investment goals and risk tolerance before investing in REITs. To manage risk, you should also diversify your portfolio, as with any investment.

Providing real estate-related services

Additionally, you can earn money in the real estate industry by providing services like property management and photography.

You can earn money by providing real estate-related services in Kenya in several ways:

  1. Manage properties for landlords and property owners: You can offer property management services to them. In this role, tenants are responsible for collecting rent, maintaining the property, and dealing with any problems they may have.
  2. The real estate agency industry allows you to assist people with buying, selling, and renting properties. Whenever you facilitate a transaction, you can earn a commission.
  3. Valuation of properties: You can provide valuation services to help people determine the value of their properties. People who are interested in refinancing or selling their properties may find this information helpful.
  4. Construction of houses or apartments for sale or rental is also an option for property development.
  5. Mortgage brokerage: You can also help people secure real estate financing by becoming a mortgage broker.

To succeed in these ventures, it will be essential to gain a thorough understanding of the Kenyan real estate market and to establish contacts within the industry. Additionally, obtaining any relevant licenses or certifications may be useful.

Making money with real estate in Kenya (or any other market) can be a complex and risky endeavour, so carefully consider your options and do thorough research before making any investment decisions.

Minimize Real Estate risks by working with a trusted and reliable real estate agent in Kenya. Touchstone Properties offers a number of convenient real estates services such as property management, Air BnBs, the sale of Land, and a plethora of related services. Talk to us today to get started on a lucrative real estate path.

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