Real estate is one of the most profitable and in-demand sectors in Kenya. Real estate properties appreciate very fast and many people are opting to invest in them. The rapid population increase in Kenya is driving the demand for real estate properties very high, creating opportunities for investors. In this article, we are going to show you how to make money in real estate in Kenya.
1. Residential Rentals
One of the best ways to make money in real estate in Kenya is through residential rentals. It is an excellent way to generate a passive income. When setting up residential rental houses, ensure that there are available social amenities like schools, hospitals, water, public transport, electricity, and safe neighborhoods. Residential rentals are best suited for busy localities and they can fetch more in urban areas.
2. Real Estate Investment Trusts (REITs)
Real Estate Investment Trusts are public traded companies that run income generating properties. You can make money in real estate in Kenya by investing in REITs. It is an excellent way to make money and you don't need to own real estate properties. Investors can buy and sell real estate investment trusts in the open market and earn profits.
3. Building and Selling Homes
Many people want to have homes but don’t have the time to supervise their construction. As such, many people are opting to buy ready homes. It is an excellent real estate investment in Kenya. The cost of building a 3-bedroom house is Ksh 3 million and you can sell such a house for over Ksh 5 million. Developers are making over 50% profit by building and selling homes. Look for prime areas with suitable social amenities to ensure that your houses sell fast and for higher prices.
4. Commercial House Renovations
The other way to make money in real estate in Kenya is through commercial real estate. It involves renovating and upgrading properties to add their value and then selling them at higher profits. This kind of business is best suited for real estate developers. You can look for dilapidated real estate properties, buy and renovate them and then sell them at a profit.
5. Buying and Selling Raw Land
The demand for land is on the rise in Kenya. As such, buying and selling raw land is a great way of investing in real estate in Kenya. Land keeps on appreciating, making it an excellent investment option. You can buy raw land and give it a few years to appreciate and then sell it. You even don’t need to develop it.
You can buy large pieces of land and then sub-divide them. You can then sell small pieces of land that many people can afford. This way, you can make more profits and you can sell land faster.
Related: The process of buying land in Kenya.
6. Lease Property
The other way of making money in real estate in Kenya is through leasing property. You just need to get a lease agreement or contract and then use the leased property to make money. You can lease land or even commercial properties. You can even lease raw land for agricultural purposes if you have a piece you are not using.
7. Become a Real Estate Broker
The other way of making money in real estate in Kenya is by becoming a real estate broker. Real estate brokers are intermediaries between buyers and sellers. As a broker, your work is to find buyers for real estate properties. When you successfully sell a real estate property, you are paid some commission. Real estate brokers sometimes sell properties at a higher price than the marked priced and take the difference between the price they sold and the seller’s price.
8. Property Flipping
Property flipping involves buying a property with the intention of selling it within the shortest time. It is one of the best real estate opportunities in Kenya. People are making good profits flipping property, but it is also good to be aware that there are also bad deals. Therefore, make sure to do due diligence before venturing into property flipping business.
Is Real Estate a Good Investment in Kenya?
There are many reasons why many investors are opting to invest in real estate in Kenya. These reasons include:
- Real estate properties appreciate faster. Instead of saving money through a savings account, many people are investing their money in real estate as a store of wealth since they appreciate faster. If you buy real estate in the right neighborhoods, you can make money faster.
- High demand. The demand for real estate properties is high especially with the growing population. There are many people looking for residential and commercial rental houses.
- Has foreseeable cashflow. It is hard to predict when you will get returns from other investments. However, real estate has a foreseeable cashflow and you can predict when to expect returns in your account.
Summary of How to Make Money in Real Estate in Kenya
The real estate sector has led to the rise of many real estate companies in Kenya. Many people are looking for residential and commercial real estate properties. To invest in real estate property, it would be best that you first identify profitable properties to invest in and then find ways you can make money from them. Real estate properties appreciate faster and are a great way to generate passive income.