The real estate business is a profitable venture and knowing the right properties to invest in can help you tap into the market. Real estate is capital intensive and it is not a get rich quick scheme. If you are a first-time investor, you must be wondering what the best properties to invest in are. This article will provide you with lucrative properties you can invest in.
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There is a large deficit in the number of homes in Kenya, many people are looking for residential homes, but there are only a few. Residential buildings are profitable ventures to invest in.The demand for rental houses is high and you cannot lack tenants. The venture is capital intensive, but you can start by building a few rental houses and let them. You can build the rest from the income you get from the initial ones.
However, it is not easy to manage rental houses. As such, you may need to hire a manager. This will help you to screen tenants before occupying your properties and to know them. Managers will also help you to manage your properties.
Raw land is also a profitable real estate venture. There are several ways to invest in raw land. You can buy and sell land at a profit or let it. Many people are looking for places to build and settle, thereby increasing the demand for land. Also, there are those looking for agricultural land to farm.
The best way is to buy a large piece of land, subdivide it and then sell it in smaller pieces. Smaller pieces of land are in higher demand than large prices. This is because common people do not have large capital to buy large pieces of land.
Read more: The process of buying land in Kenya.
Your Own Home
You can convert your home into a profitable real estate venture. You can use your own home to generate a regular income or secure loans from financial institutions. Many people living in towns have residential homes in their rural areas. You can let that house you are currently not occupying and generate a regular income. If the house is in the town suburbs, you can let it to tourists to occupy during their visits.
Homes appreciate their value and even if you do not wish to occupy your house immediately, you can sell it at a profit. You can also use your own home to secure a loan for investment. Assume you have a piece of land you want to build rental houses, you can borrow a loan and use your home as collateral. This will help you to invest in other properties when you do not have sufficient capital.
Read also: How to invest in the Kenyan stock exchange.
Commercial investment is another lucrative real estate venture. This is where you let your property to business outlets. The property can be a mall or small stalls that you can let to wholesale or retail businesses. This venture is highly profitable, but it is capital intensive.
Since this real estate venture requires huge capital investment, most investors get financing from anchor tenants. When the property is completed, the anchor tenants occupy them and they do not have to pay rent for some years. Their rent is deducted from the money they contributed during the construction of the property.
Investing in industrial property is a cheaper real estate venture compared to commercial properties. Industrial properties include warehouses and depots that are used by small enterprises and industries. With governments pushing for industrialization, the demand for industrial properties will go high.
The designs and construction of industrial properties are not complicated, which makes it cheaper. However, the properties need to be in an economically viable location. You may also need a large piece of land to provide for parking areas.
Real estate is among the most profitable ventures if you invest in the right properties. The best way is to start small and invest in properties that you currently have. You also need to be patient since real estate properties sometimes take time to get buyers or tenants.