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Measure the spaces or anything in the house
See the house in its entirety through the doll house view
Move from one level or room of the property easily
Enjoy an immersive experience and imagine yourself living in the property
The pin location of the property
Snippet 3D capture of 4 bedroom 3 storey townhouse in Lavington
Before you purchase that high-end home, you need to be confident that that is the right property for you.
You should get a feel of the flow of the house from room to room.
With us, you will get to explore the property you want to buy on your own schedule through the 3D capture shared with you.
We are your trusted advisors to help you walk through the buying process.
We not only know about the house, but our report also gives you more insight into the neighborhood.
We will point out the amenities that matter to you most.
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Gone are the days when you have to visualize a property using a blocky black-and-white floor plan. With us, you will get a detailed remarkable capture of the space.
With our 3D captures, you can visualize entire rooms and floors and also take measurements of any room from floor to ceiling.
With this technology, we’re able to highlight special features of a house like a heated pool or marble countertops.
We know that small details matter to our clients and this is how real estate should be.
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As the nation has continued to develop, most investors and individuals have focused more on real estate and all its facets. Real estate investment in Kenya has been a lucrative opportunity known for its reputation for bringing in great returns on investment.
A report by Hass Consult Index shows the performance of land against other assets where if one invested Ksh 1 million in 2007, in 2022 that would be Ksh 10.47 million if invested in Nairobi’s satellite areas, Ksh 6.39 million if invested in the suburbs and Ksh 3.39 million if invested in bonds.
However, the secret to generating returns on investment is knowing the fundamentals of real estate. This knowledge acts as a pillar to enable you to invest wisely in the industry.
That is why in this article, we have compiled a guide that explains the real estate process to customers and how agents can better market their properties.
If you want to read on more detailed topics, feel free to look into our topic clusters. Otherwise, buckle up as we go through everything you need to know about real estate in Kenya.
What is Real Estate?
Real estate refers to land and any other permanent buildings on it such as a home or any development whether man-made or natural attached to the land including natural resources like crops, water, and minerals.
The term “real” refers to physical property while “estate” connotes the interest a person has in the particular property. In business, we refer to real estate as the act of producing, buying and selling property.
Real estate is distinct from personal property. Personal property refers to items not attached to the land such as vehicles, jewelry, farm equipment, or furniture.
Having known what real estate connotes, let’s now look at important facts about investing in real estate.
Important Facts About Investing in Real Estate
Real estate offers good retirement investment – Investing in real estate offers a secure and safe retirement plan. It offers a steady and secure income when you retire and even during your peak years.
Acts as a buffer against inflation – as the inflation rises so does property value and rent. Therefore, you can bank on remaining profitable even during inflation.
It has tax benefits attached to it – When you invest in real estate, you qualify for incentives such as tax deductions from mortgage and insurance expenses. Also, when you sell an investment property, the profits gained from the sale are taxed as capital gains which is a lower tax amount in comparison to ordinary income tax.
It builds wealth – Investing in real estate is one of the sure ways to increase your net worth. Noteworthy is that this is not a get-rich-quick scheme as it takes patience and hard work to build.
It has low barriers of entry – the barriers to investing in real estate aren’t as huge as would be perceived. To invest in real estate, you don’t need a huge sum of money especially now with Real Estate Investment Trust (REITs) where you can own part of a high-quality real estate such as an office block, high-rise apartments, shopping malls, hotels and warehouses without paying the high acquisition costs.
In real estate, location is everything – Location is one of the major things to consider when purchasing a house; it’s the one thing you cannot change. You are more likely to make money from the wrong property in the right location.
Why Invest in Real Estate in Kenya
Strong economy
Although smaller in population than Tanzania (54 million vs. 58 million) and only slightly more populous than Uganda (44 million), Kenya’s geographical location makes it central to East Africa. Besides, Kenya is the wealthiest of the three.
According to the World Bank, GDP per person in 2021 was USD 2021 in Kenya, USD 1099 in Tanzania, and USD 883 in Uganda. Rwanda, a darling of the western press, was at $822.
These higher GDP figures are not a daydream. Kenya is the regional production center. Unlike in most African countries, many foods in supermarkets are locally produced. This has attracted many foreign investors into the land.
Investor’s confidence
Compared to other jurisdictions, Kenya’s real estate market has the potential for higher returns. Foreign investors can also enter Kenya’s real estate market relatively quickly. Foreigners are welcome to purchase commercial class land and property in Kenya.
According to Jones Lang Lassale Kenya Ltd, the country has shown impressive improvements in transparency, largely due to increased regulation of the real estate market as Kenya aspires to become an economic hub for East Africa. Private companies and other international consultants are increasingly providing consistent data for the Kenyan real estate market.
Introduction of REITs
The Real Estate Investment Trust (REIT) structure and corporate tax exemption were introduced in 2013, and the country’s listed real estate market has grown significantly in recent years.
International investors, mainly from South Africa, have flocked to Kenya’s real estate market since the introduction of REITs.
A favorable business environment and a diligent workforce
A favorable business environment and a diligent workforce are attracting foreign and domestic investors to invest in property development in internationally renowned holiday destinations such as the Masai Mara National Reserve, Naivasha, Nanyuki, the Coast, and Nairobi. This is the essence of real estate tourism.
Currency
The Kenyan shilling is one of the most stable currencies in Africa, making it a popular destination for real estate investment as assets remain relatively stable in terms of US dollar value.
Rental Yields
The property market in Kenya is primarily a rental market. The residential sector is currently experiencing the greatest demand due to a rapidly growing population and a growing middle class. Rental yields can go upto 6% to 8%.
Several developments are characterized by a wealth of conveniences with features such as fully equipped modern gyms, steam room and sauna, solar-heated swimming pool, and concierge service. Some developments also add AirBnB property listing and management as an added service.
The combination of long-term and short-term rentals increases the monthly income. In addition, if demand for purchasing a unit falls, it can easily be converted into furnished or unfurnished apartment.
Types of Real Estate in Kenya
Residential Property
Residential properties are structures designed specifically for the dwelling or living of individuals. Payment is made for the individuals to live in the building. It includes townhouses, multi-unit apartment buildings, maisonettes, luxury villas, and stand-alone semi-detached houses. It also includes vacation houses where tourists can stay such as hotels, lodging, etc.
Residential properties fall within three major categories:
A – Luxury residential properties
B – Middle-income residential properties
C – Low-income residential properties
Commercial property
In Kenya, commercial property is land intended to generate profit or structures that are used for business activities coupled with larger residential properties that are used for trade.
It includes properties like skyscrapers or office buildings which are leased out for a rental price to business owners or commercial businesses for use.
Industrial property
These are properties used for business purposes such as commercial establishments, factories, public utilities, manufacturing plants, and warehouses.
Retail property
The retail property includes structures such as shopping malls and retail storefronts. The landlord in some cases imposes a base rent to the tenant to encourage them to keep the property in top-notch shape. Also, the landlord may sometimes receive a percentage of the sales the tenant has generated.
Mixed-use property
This is a type of urban development that incorporates the above property investments all in one space. They are used to monitor risk as they have a unit of diversification.
Land
It includes farms, vacant land; undeveloped land, or land on which properties are being constructed.
It’s important to know the types of real estate as the purchase and sale of different properties are based on their type. Also, processes such as construction, zoning, and an appraisal are handled differently in each real estate type.
Because each of these processes has its unique process of acquisition, let’s then look at some of the types of residential houses.
Types of Houses
Apartments
Commonly referred to as “flats” apartments are a set of rooms that make up a dwelling, typically in a building that contains several of them. Apartments typically have one to four bedrooms with a suite of rooms ranging in area from 150 to 300 square meters. They can be serviced making them popular with students, diplomats, and ex-pats.
The appeal lies in the location, size, style, amenities, number of units in the complex, and price. Prominent features include swimming pools, gymnasiums, ponds, clubhouses, etc. They are mostly occupied by those in the middle and upper-income bracket.
Townhouses
Townhouses in Kenya are usually located in a gated community. They often have two or three floors and occupy an area of around 250 to 400 square meters. As with apartments, facilities and common areas are shared, however, townhouses have more exclusive features and operating codes that make them appear more like private members’ clubs.
They boast a variety of salient features such as landscaped gardens, swimming pools, clubhouses, basketball courts, tennis courts, on-site fitness centers, etc. Private companies provide 24-hour security.
Mansionnetes
A mansionette is a derivative of a mansion (a large, impressive house). It is a small house, usually attached to another, usually on two floors, with its entrance from the outside, a front yard used as parking for one person, and a back yard.
Most maisonettes have three to four bedrooms with DSQ and occupy an area of around 100 to 200 square meters. Until recently, this was the most common house type in the urban areas, e.g. B. Donholm, Buruburu, South B, South C, etc.
However, due to the scarcity of land in the city and other urban centers, these types of developments have been shifted to satellite areas around urban centers, e.g. B. Kitengela, Mlolongo, Athi River, etc. Prices of land in Nairobi satellite areas are much lower than in the suburbs.
In Kenya, maisonettes appeal to small young families because of their price and function.
Luxury Villas
By definition, a villa is a large and luxurious country residence. In Kenya, they are located in quiet suburbs and usually have four or more bedrooms with ensuite bathrooms.
They are spacious and there is no shortage of luxury: wooden floors, Venetian finishes, state-of-art kitchen, a beautiful backyard or a front yard, spacious balcony and terrace, swimming pool, clubhouse, tennis court, badminton court, garden area, gym, and children’s park.
They are designed for the highest end of the luxury market.
Real Estate Investment Strategy
In real estate, it’s vital to have the right investment strategy. As an investor, you need to select a strategy that best suits your personal goals both long-term and short-term, your budget, and your skills.
Here are some investment options to consider:
For rental properties
Investing in rental properties involves buying property for sale. You can purchase the property for sale both on an off-plan or a completed house. Revamping the house to make it attractive to potential tenants and renting it out.
For a first-time investor, pay more attention to the yield than the capital gains. To calculate the yield, (Gross yield = annual rental income/property value x 100.)
There are 4 investment strategies to consider:
Airbnb rental property
The demand for short-term rentals apart from hotels has spiked up in recent years. According to Airbnb statistics in 2018, Kenya had more than 6,500 houses listed. Airbnb offers lucrative opportunities you can bank on as you can rent the house from one night to 30 days.
When purchasing real estate for the purposes of doing an AirBnB business, consider focusing on the areas with the highest demand as shown on the map below.
It involves buying property to rent for between 3 months – one year or more.
Buy and hold real estate
If you’re looking for a long-term and active real estate strategy, buy and hold is for you. This investment strategy involves purchasing property and holding it for a period. The reason for holding is to wait for the property to appreciate and sell it at a higher value. The majority of investors combine this strategy with rental properties to benefit from the rental income.
Fix and Flip real estate
With this form of investment strategy, you purchase a house under the market value, renovate it and sell it when it’s opportune to make a profit. To ensure you don’t lose money on a fix and flip real estate, ensure to consult an inspector, contractor, and appraiser.
One of such properties in our portfolio is Santack estate near Kilimani along Ngong road where an old bungalow can be purchased for Ksh 12.5M. According to Hass Consult Index 2022, the average value of an acre of land in Kilimani is Ksh 399,700,000.
Real Estate Investment Trust (REIT)
This is a passive real estate income strategy. Investing in REITs is similar to how one would invest in stocks and shares. Investors consolidate their finances to purchase real estate such as apartment complexes, healthcare facilities, and hotels. The investors will then receive a portion of their profits generated as dividends.
Considering the different real estate investment options, it’s also vital to consider the qualifications of a real estate agent.
Qualifications of a real estate agent
Must have a valid real estate certificate. Some of the essential elements that influence whether a person will be certified or not are:
You must be above the age of 18 years.
If you’re a non-citizen, you need a lawyer who will represent you.
You need to register with the Kenya lands registry.
Proof of property purchase – you need to prove that you have properties available for sale.
Proof of finances to invest in real estate – need to show proof of finances to pay for the license, marketing among others.
Real Estate Processes
Real estate involves a lot of processes. Depending on the type of real estate you desire, the process of acquisition differs. However, for the most part, the processes are the same.
For this article, we’ll look at the processes of acquiring a residential property. Commercial and industrial real estate follows the same processes to a degree, but residential processes are most relatable to most customers.
We’ll look at the real estate process from a buyer’s and seller’s point of view.
Real estate process from a seller’s perspective
The following processes are involved:
Hiring the right agent
When a homeowner decides to sell their home. What he or she may decide to do is hire a real estate agent to assist in the selling of the property that is if unless they decide to sell the property themselves.
Having the right real estate agent partner is crucial for the success of the sale of the property. It also saves you time and energy you would have spent in selling and furnishes you with information on the market you wouldn’t readily find on the internet.
Historically, individuals would find a real estate agent through personal recommendations from friends, relatives, etc. However, times have advanced with potential sellers finding real estate agents not only through personal recommendations but also through online platforms like social media or Google.
Before hiring an agent to assist you to sell your property, ensure you:
Search for different real estate agents online or through personal recommendations.
Spend time interviewing the agents you desire to work with. Check how long they have been in the field. What is their level of success? What marketing strategies have they employed? Investigate how long it takes for them to sell a house in different locations.
Based on the feedback given from the interviews, choose the real estate agent that best suits your preferences.
List the property
After getting the right agent, the next thing as a seller is to list the property. Property listing is setting your property on the market so that potential buyers can see it. This should be done by your agent however, you may also check our site regularly as we get requests from clients looking for specific types of real estate and your house could meet the requirements. In such instances, you won’t need an agent.
The process of listing your property involves:
Setting the price
Placing your property on the agent’s online listings
Marketing the property
Setting the price
The majority of us believe that setting a price for your home is just coming up with a figure in your mind and running with it.
However, for your house to sell well, the price of the house needs to be evaluated by a professional so that it can be priced according to the current market value.
Although you can set your house to sell at any price. It’s important to understand the dynamics of the market so that you don’t oversell or undersell the home.
We rely on research about land prices in Nairobi suburbs and satellite areas to make it easier for you to determine the market price.
Placing your property on the agent’s website
This is a platform that your real estate agent has access to. It shows real estate listings from all over the country.
Placing the house on the website allows potential buyers to view your house’s features and its amenities and provides the buyer with images of the different rooms in the house.
Marketing the property
Marketing the house increases the property’s exposure to potential buyers.
Some of the marketing techniques you can employ include scheduling showings with the buyers. With technology advancement, you can now offer virtual or 3D experience of your home through Digicurated.
Showings give the buyer first-hand experience of the house. These in-person/virtual meetings or a combination of both allows the buyer to express their concerns about the house, ask questions and give you as a seller platform to sell your property in a way that would be more desirable to the buyer.
As part of your marketing process, you may consider creating videos on the property and other features attached to the property such as its surrounding amenities and location to attract potential buyers more.
In addition, consider virtual staging as a marketing tool to implement. Virtual staging is where a potential buyer gets to view the house without necessarily going to view it physically.
Apart from virtual staging ensure you also do physical staging. Staging is where you focus on the home looking more appealing to the buyer.
When the buyer comes to view the house, they are not only buying the house, but also the experience from the showing. Therefore, it’s important to give them a worthwhile experience.
Staging involves cleaning the floors, removing personal images from the house, adding more space by properly arranging the furniture, etc.
When buyers come for house showings, they imagine the house as their own and how they would fit into the space. Staging helps with giving them this experience which would ultimately help you land the sale.
Make the necessary replacements and repairs
Unless you intend on the buyer making the house repairs by themselves at a reduced cost, ensure to swipe the house with your agent and check if there are any repairs your house would need before placing it for sale.
Check for broken pipes, chipped wood, taps or cabinets that are broken, etc. Be very detailed and give your house a good polish to get the value of the house back.
You don’t have to fix everything, but don’t leave any loose ends. Repairing damaged parts gives your house an elegant and attractive look and helps you land a potential buyer quickly.
Fill out a seller disclosure
This is a document that explains how old the house is, the materials used, and any problem you encountered while living in the house like leakages, water shortages, etc. This will help your agent access your house and know how best to sell your house. Ensure you’re honest.
Give a purchase offer and negotiate
If you placed competitive prices on your house, multiple buyers would be attracted to it. If you get offers lower than your asking price, don’t hesitate to negotiate by making a counteroffer, reducing the price, or asking for the full price.
When buyers are negotiating the price, they at first do so testing the waters to see the reaction of the seller.
Be sure to work with one offer at a time and compare the different offers from buyers to get a feel of how much the buyers are willing to pay for your house and if need be, adjust the price accordingly.
Home appraisal and inspection
Once a buyer has developed an interest in your property, they may have your house inspected for any damages and appraised by the lender to check if the house was valued correctly.
This is a crucial stage for the buyer. Should they find the house with major parts that need repairing, be sure to disclose information on the repairs you intend on making that come with the sale and repair parts pointed out by the buyer.
Also, when the house is valued and the lender advises the buyer that the house was overpriced, the buyer can use this as a negotiation tool to bring the price downwards. Be sure to be flexible.
With these tips, you are guaranteed a successful sale of the house. Now let’s look at the real estate process from a buyer’s perspective.
How to sell an old house
The process of selling your old house is no different than selling a newly constructed house or one that hasn’t aged. However, here are some additional tips to consider:
Prove its maintenance
You need to prove to prospective buyers that despite the house being old, you’ve kept up with maintenance and that all systems in the house are still functioning well. You could hire a home inspector to come to view your house and advise of any changes you should make before listing the house.
Here are some things to consider when looking at maintenance
State of the house’s foundation
The roof. Do they need a replacement? Are there any leakages?
The plumbing. How is the water pressure around the home? Copper piping is more durable compared to lead pipes. Check if there are any repairs and take care of them.
How is the wiring within the house? Can it handle modern appliances?
Market the house’s unique feature
Update your internal decor to match the current housing trends
Ensure you do staging while marketing your house
How to know if the property is over-priced
Conduct market research or enlist our research services.
Find out how comparable houses within your location have sold out for
Keep an eye on the market trends as they affect the house pricing.
Get your house valued by a financial institution and also a professional real estate company.
4 Things that make a property more desirable to investors
The location of the property
Location is the most important factor that investors look out for before purchasing a real estate property.
Some things to look out for before determining a good location are:
Neighborhood – the type of neighborhood determines the type of tenants and investors it will attract. For example, a neighborhood in Karen or Runda will more likely attract high-end investors and tenants compared to other locations that are densely populated and as a result noisier.
Schools – are there good schools within the location?
Amenities– What are the present amenities available? Shopping malls, coffee shops, green spaces are usually top on the list for buyers.
Taxes – depending on the location, different properties attract different types of taxes. For example, stamp duty imposed is 2% in rural areas while in urban areas it’s 4% of the value of the property.
Growth potential and cash flow
When investing in rental property, cash flow is one of the most important factors to consider.
Consider the amount of cash flow that the property attracts. Also, if the property is located in an area that has growth potential, it attracts investors as rental income increases commensurate to the growth of a location.
Condition of the property and management
The condition of a property can either benefit or sabotage your investment choice. Consider revamping a property that is old and place a good property manager to ensure you don’t lose on your returns.
Market trends
Market trends can affect the future of the property. Therefore, evaluate the market trends such as future developments, job market, and average rent. All these factors determine if the property is a worthwhile investment.
Developments such as the construction of a superhighway or solar power plant near a property will affect the market trends of a location significantly.
Real estate process from a buyer’s perspective
When buying property in Kenya the proper process should be followed. Most people enter transactions with strangers and end up losing huge amounts of money to scammers who are usually very clever.
It is recommended that you hire the right people including property researchers or real estate agents, lawyers, appraisers, or any other party you trust to give you more confidence in going ahead with the transaction.
It’s common sense to know your budget as you start the process. The various financing options can be through cash deposits, cash proceeds from the sale of other assets, mortgage financing, and Sacco loans, among others. With any form of financing, one should first determine how much they qualify by contacting the appropriate loan officer for a pre-qualification, so you know what your budget is. Below is the process one should follow to ensure that full due diligence is performed to avoid regret.
Identify the property of choice.
The first step is to find the property (land, house, etc.) that interests you. Many times people outside the country may not be able to rely on their family or relatives to conduct a proper search for a house.
For instance, if you’re looking to purchase a house that you can use for AirBnB, it is advisable to hire a researcher to help you identify the best locations based on statistics.
This is one of our key services where we create a professional report with the options of the properties to look into. We will then offer you a virtual visit of the property which shows the floor plan which allows you to measure the rooms and see finer details.
It also pins the exact location of the property. Later on you can conduct a site visit to ensure the property meets your specific requirements.
Search
The buyer should obtain a copy of the property title and a copy of the seller’s ID from the seller. The copy of the title is used to conduct a search of the property at the Land Registry, while the copy of the national ID card is used to verify the seller’s identity at the Office of Registration of Persons.
Currently, there are no fees for searching. In case you’re buying a parcel of land in Nairobi, you will need to register on Ardhisasa and select the search icon then follow the steps provided.
The research results are usually ready for collection 2-3 days after the application has been submitted to the land registry and contain such information as:
The registered owner of the property
The size of the property
Any encumbrances entered on the title, such as unpaid taxes, court orders, prohibitions, caveats, and warnings
Negotiation and Contract of Sale
The buyer, either himself or with the assistance of his attorney, should engage the seller or their real estate agent for discussing and agreeing on the terms of sale which constitute the contract of sale.
When you enlist research services through our company, our partner lawyer will be available to assist you with the process.
It is common for the buyer to pay a 10% deposit and then pay the balance of the purchase price after the sale is complete.
The balance can be paid back in the form of a mortgage taken out by the buyer to complete the transaction. Both the buyer and the seller must sign the contract of sale. At this stage, the buyer pays the deposit.
Transfer and Closing
A transfer represents a formal handover of property title from the seller to the buyer signed by both parties.
Stamping and Registration Formalities
The next stage in the sales process is the payment of transfer stamp duty and registration fees. To determine the amount of tax to be paid, the seller’s attorneys must apply for a valuation of the property at the land registry.
The appraisal is carried out by state appraisers who are obliged to determine the market value of the property.
The stamp duty paid is between 2% for properties in the rural areas and 4% for properties in the cities of the value of the property. Stamp duty is collected by the Kenya Revenue Agency and should be remitted to the Commissioner of Domestic Taxes through various banks that have been appointed as collection agencies.
Once the buyer has paid stamp duty on the transfer documents, the documents are deposited with the land registry for stamping with the tax.
This is the process of paying stamp duty:
Login to iTax >> Payments >> Payment Registration >> Tax head (Agency Revenue), Subhead (Stamp Duty) >> click payment type (self–assessment) >>click on payment registration>> fill in bill reference number>> Nature of instrument>>details of the transfer (PIN) >> details of the buyer (PIN) >>details of stamp duty >>Rate of instrument >>total amount to be paid >> Mode of payment >> Submit
The final step is for the transfer documents and all related documents i.e., the original titles, ground annuity, and waiver certificate, consent to transfer, duly completed stamp duty assessment form, and stamp duty return, assessment, and deposit receipt to be posted for registration.
Registration
The very last step in the sales process is the registration of the transfer in favor of the buyer. When a properly registered transfer has been released to the buyer it is important to conduct a further search of the property just to ensure proper registration has taken place.
If the purchase price should be provided by a bank or other financier, the duly registered documents will be charged to the financier to settle the balance of the purchase price.
The documents are then kept by the financier until the buyer has paid the entire loan amount.
How long is the process of acquiring real estate in Kenya
A land transfer process currently may take up to Four (4) to six (6) months due to the delays at the Registry. However, there is currently a digitization process that is taking place that may make the process shorter.
Factors to consider when selecting a residential house
Location of the house
Neighborhood
Surrounding amenities
Home size and usable space
The condition and age of the house
Upgrades in the house
Local market
Economic indicators
Valuation of property
Property valuation is the ability to estimate the fair price at which a property or asset would be traded in an open market, or rather the process of measuring the value of a property or land or other assets for a specific purpose such as e.g. rental, purchase, sale, audit opinion, or taxation.
In Kenya, the board responsible for property valuation is Valuers Registration Board. The board sets regulations that determine how property is to be valued.
It is important to note that the person you hire to conduct assessment services must have passed mandatory and dynamic educational, training and competency tests.
He/she must demonstrate and uphold a code of high ethical conduct and professional practice.
Importance of Valuation of property
Due to its legal nature, a real estate appraisal allows for a high degree of convenience. In this case, both property buyers and sellers definitely need an appraiser to guide them on pricing in the transaction process.
Helps in determining the value of your property as per the current market.
Valuating your property acts as a guide to your selling, buying, and investment decisions.
It helps you conduct an accurate property assessment.
It provides clarity and prevents unrealistic expectations of the property.
Property valuation acts as a legally binding document that can be used in negotiations in case a dispute arises with buyers.
It is used by lenders to determine mortgage.
It prevents financial shocks.
Housing Finance
Housing finance is the process of providing finances to individuals for construction, purchasing a residential house/ land/ an apartment, and making improvements to the house.
Some of the housing finance options include personal savings, bank loans, and Sacco loans. The most common mode is personal savings.
Constraints to conventional housing finance
According to Kenya Bankers Association, mortgages are the least favorable mode of housing finance taking up a market share of only 6%.
The reason why the uptake of mortgages is low is:
Mortgages in Kenya are associated with high-interest rates. As of 2020, the average interest rate of a mortgage was 12%.
High initial deposit requirements.
The lack of long tenors makes the mortgage terms unfavorable to the majority of the stakeholders.
Strict processes for the mortgage approval by banks especially when they are lending to those in the informal sector.
High prices in property
Low mortgage amount
As a result of limited access to capital markets and the low supply of long-term capital, financial institutions hesitate in expanding their mortgage portfolios.
Mortgage Insurance
This is a policy that protects the lender or beneficiary if the borrower defaults on payments, dies, or is otherwise unable to meet the contractual obligations under the mortgage.
There are three common types of mortgage insurance: insurance against fire and perils, mortgage protection, and retrenchment insurance cover.
Mortgage protection insurance covers permanent disability and death. That is, in the event a person dies without having completed their mortgage, the insurance company is obligated to pay the remaining amount and pass the title deed to the Next of Kin.
Fire and perils insurance covers the building against uncertainties such as an earthquake, fire, flooding, etc.
The retrenchment insurance cover ensures that the insurance company continues servicing the mortgage for a period of up to 6 months after the person has lost their work.
Tips to Purchase Home Insurance
Home insurance is a cover for your belongings and house against life’s unexpected events. The insurance covers you against fire, damages caused by adverse weather conditions, and theft among others.
It’s divided into two categories: Insurance for your house and insurance for the contents in the house. Both insurance covers can be taken separately or combined.
Some of the tips for purchasing home insurance include:
i) Research some of the insurance companies available in Kenya that offer home insurance, their rates, and compare notes. You should look into 5-6 insurance companies before making a decision.
If possible, have a lawyer go through the fine print to make sure that what you’re getting is exactly what the insurance agent is selling.
ii) Deciding which type of home insurance works best for you. The type of insurance you get would majorly be influenced by the party taking. As a tenant, it’s wise to take home insurance for the contents within the house, and as the owner, insurance for your house.
In the event that an Insurance company fails to honour their part of the deal or misrepresents information to get you to purchase a product, you can file a complaint with the Insurance Regulatory Authority of Kenya.
Also, consider whether you want to over-insure or under-insure.
Over insurance is where you take an insurance package higher than the amount required to rebuild the house while Underinsurance is where you take a package lower than the amount required to rebuild the house.
When deciding the type of insurance you prefer, location is a major factor in determining the premium your insurance agent would grant you. The reason is that your location determines the perils your home is more prone to as a policyholder.
The following are factors the insurance takes into consideration: the crime rates, the distance of your home to the nearest police station, and fire hydrants. Potential risk from weather conditions such as earthquakes, floods, and landslides.
iii) Choose a reputable insurance company, its location is easily accessible to you, has good financial ratings, and is customer oriented – how fast they reply to the customer’s needs.
iv) Make the most of the discounts offered – most insurance companies in Kenya offer discounts for behavior that altogether diminishes the dangers, so it is prudent you make great use of them. From installing burglar alarms, to smoke detectors, and water safety systems.
You will be able to spare a noteworthy sum on your insurance premium. Besides, if you effectively keep up your credit score, you’ll impressively progress your chances of procuring better rates.
v) Be familiar with the costs – ensure you don’t insure your house for its current market value but for its replacement cost.
vi) Be honest with the questions asked to get the best out of the insurance company.
A gated community is a form of residential housing estate containing entirely controlled passages for people on foot, bikes, and automobiles, and is frequently characterized by a closed edge of dividers and fences.
The gated community in most cases comes with a set of rules, which the inhabitants and guests must follow.
Some of the benefits of a gated community are:
Sense of security
Considering that the developments in and out of the gated community are closely observed there radiates a sense of security among the residents.
Most of the gated communities have cameras and a control center where those capable of security do their observing. With such, it is conceivable to identify any security risk and act appropriately. Be that as it may, it isn’t all gated communities that have cameras.
Security also enhances crime reduction – One of the ways in which crime is reduced in gated communities is that inhabitants are guardians of each other. In truth, people living in gated communities are often close to each other as the relationships forged are more family based. With such associations, it is simple for inhabitants to warn security of their neighbors should an instance of crime occur or threaten to take place.
Privacy
Gated communities are characterized by having borders within the perimeter walls and close monitoring of the entrances by security personnel. This gives a sense of privacy to anyone entering the premise.
Community groups
Another advantage of living in a gated community is having community groups that foster relationships, and access to convenient amenities like shops, pools, gyms, schools, etc.
Additionally, those living in gated communities get to enjoy organized garbage collection and cleaning services – roads, gardening, cars, etc.
Some communities such as Santack Estate have registered association groups that address all matters of importance to the residents.
Some of the drawbacks include:
Expensive houses
Bearing in mind that those gated communities come with extra benefits as compared to other regular residential properties, the sum of cash that each house goes for is exceptionally high.
Gated communities are in this manner not inside the limits of reasonable lodging.
Strict rules
Although the rules imposed are for the betterment of the community, some applicable rules infringe on the personal preferences of some people. For example, one of the rules may be to paint your houses in the same color which may not be suitable for some individuals.
Invasion of privacy
Doing surveillance of the different activities within the estate is unquestionably great for security purposes. In any case, the sense that the security personnel at the main gate knows everyone who visits you is in itself a privacy invasion.
Over and above, the benefits of living in a gated community far outweigh the disadvantages. Ensure to consult a property researcher on the best location should you decide to live in a gated community. Let’s now delve into the functions of a property manager.
Functions of a Property Manager
The functions of a property manager vary depending on the type of real estate and the management agreement. Some of the real estate comes with the advantage of enlisting the services of a property manager who can help you list your property on platforms like AirBnB as well as manage the property. However, here are some of the underlying roles:
Rent collection
As a property manager, your main role is to collect rent from the tenants on time.
Rental income is the major lifeforce of the business to the landlord.
Therefore, it’s the role of the property manager to set up a workable system
for rent collection every month.
To ensure that the property has a good market value and is in line with the current market shift, property managers have the right to adjust the rent every year depending on the property location and the market demand.
Tenant management
A property manager has to develop communication skills as they are in constant communication with the tenants. There are also responsible to ensure vacancies in the houses are filled. This they do by ensuring they attract new tenants through proper maintenance of the property and ensuring that the current tenants are satisfied.
They are also responsible for screening tenants. A professional manager should screen the tenants by looking at their credit history, criminal records, and their history as a tenant, among others. The screening reduces tenants’ turnover.
A property manager is also responsible for handling any tenant complaints, emergencies, and requests that may occur. Hence, they should always be within reach of the tenant.
Leases
A property manager cushions the owner against losses by creating favorable lease agreements. At the same time ensuring that the set agreement is also agreeable with the tenants.
When the lease agreement is over, the property manager should access the property for any damage and deduct where necessary from the security deposit before the tenants move out. They are also responsible for issuing tenants who breach the contract with an eviction letter.
Property Maintenance
A property manager is responsible for ensuring that the property is in good condition by conducting regular inspections, repairs, and troubleshooting.
Conducting regular repairs keeps the property in good shape and prevents the property from having major damage that would drain finances.
They should also ensure that the maintenance happens smoothly with minimal interruptions. They can achieve this by notifying the tenants before the scheduled maintenance time.
Financial records
A property manager should ensure they keep proper books of account of the rental income collected and the costs of the different maintenances. The books should contain records of repairs and the costs incurred, insurance costs, records of the rent collected, inspection costs, and maintenance costs.
Employee Supervision
In the event of other workers within the premise, the manager should ensure that the work delegated is correctly done. They also have the authority to set their salaries and fire them in case of a contract breach.
Buying land in Kenya
Whether you are purchasing land to build your future home or for residential or commercial investments, it’s important to conduct due diligence before purchase. Here are a few things you should know.
The Nature of the land and its typography
Before purchasing land, it’s vital to know how you will use the land. It could be for commercial use, residential properties, industrial use, etc.
You should also be cognizant of the type of ownership you will have. In Kenya, there exist only two types of ownership
Freehold. This is where you own the land indefinitely if the terms do not change. Land in the cities is rarely ever available for freehold lease terms.
Leasehold. This type of ownership allows you to be a landowner for a set period after which you can renew the contract when it expires. Non-Kenyan citizens can lease land only for a period not exceeding 99years.
Knowing the nature of the land and its typography will help you determine whether it’s a worthwhile investment and if it will appeal to other buyers in the event you decide to sell the land in the future.
Utilities
Before purchasing land, it’s important to consider if the land has access to utilities such as electricity and water.
Having this information will enable you to budget accordingly and know what additional costs you will incur should you decide to buy the property.
Is the land located in riparian areas?
Riparian areas are locations adjacent to a water body (a water stream or a river). We have had unfortunate news where people lost their lives during the rainy season because of flooding as their property was close to the water stream.
It’s important to note that building your property in a riparian area in Kenya is prohibited. You don’t want to end up having your house deconstructed because of this.
To learn more about the property you are purchasing whether it’s located in a riparian area, you can do a free search on the Arthisasa website or hire a professional surveyor to view the land before purchase.
It’s important to also identify is the land is accessible by road
This may seem like an obvious thing, however, some places have no road access. A path has to be created to access the land. You don’t want to purchase land that you cannot gain access to.
Ensure you don’t get conned
Before making payments, it’s important to verify if the land really exists or if it has a current owner apart from the seller. Ask for the title deed and search before purchase.
Also, you mustn’t settle for a land purchase from just viewing the pictures. Imagine the horror of thinking you own land only to find out it belongs to someone else. Do your homework first to avoid getting conned and losing money.
Let’s now look at the process of land purchase.
The process of purchasing land in Kenya
As you decide on purchasing land, it’s important you also contact a lawyer to help you through the process as there are documents involved that need legal advice.
Here are the steps involved in the purchase of land:
Location of the land
You can find land on purchase by enlisting the services of a researcher at Digicurated or doing a personal online search through real estate portals. Narrow down your search to the price and location, the two most important factors to consider in a land purchase.
Apart from conducting an online search, you can ask your friends or family for recommendations.
Search the land
Once you have settled on the land you want to purchase, ask for the title deed from the seller and search on the Arthisasa platform, a free online platform. This platform helps you determine who is the owner of the land and other relevant information related to the land such as restrictions on the land, and how big it is.
For you to be able to search, you must sign up and register to the platform. To register you are required to have:
Your national ID and serial number
Phone number
Email address
Colored passport
After searching for the property, conduct a search and survey on the location of the land
If you’re buying property, it’s important to look it up in the relevant registry. Let’s say that the land is outside Nairobi County, in a county like Nakuru, you will have to contact the Nakuru survey office.
Every county has its stipulated fees. You can conduct land registries through the Ministry of Lands.
The search will reveal if the land had any outstanding land rates and rent which must be paid to the government before the transfer of ownership. Ensure that the seller has cleared any outstanding issues before transferring ownership.
If there are no outstanding payments, make and keep a copy of the clearance certificates and receipts.
In addition, surveying the land would help you know the boundaries of the land. The Ministry of Lands upon request grants the survey maps on the land to guide you. Also, if you have a surveyor they would advise.
Once you have the maps, go to the location of the land, and mark the boundaries to avoid disagreements during the sale process.
Verification of the seller
Ensure that the seller is verified to sell the land to you if they are not the landowner. Depending on the type of land, they should show you a consent form.
It is during this stage that you need the help of a lawyer.
The signing of the contract
The sales contract is a legally binding document that is drafted by the seller’s lawyer. The purpose of the contract is to safeguard both the buyer and seller and ensure that both parties benefit from the transaction.
You are to fill out and sign three copies of the contract: one for yourself, and one for the lawyer. The contract contains the following details:
Information about the buyer and seller
The property description
The price of the land and payment schedules
It shows who pays for what during the process
It describes what happens if there is a breach of the contract
There are also hidden costs included such as stamp duty on property value. In urban areas, the stamp duty is 4% and 2% in rural areas. There is also a cost of legal representation which is highly influenced by the property value. Usually legal charges which includes filing fees and disbursements will cost between 1-2% of the property value.
All these costs are included in the agreement.
Land transfer
After you make all the payments, the seller will sign the land transfer documents ensuring you get what you paid for. You should contact your lawyer to help you with this process.
Remember to do your homework before beginning the purchase journey. It’s a good idea to enlist research services by Digicurated to help you make an informed decision. It may be a lengthy process but one that’s worthwhile in the end.
Title Deed
A registered title deed is an official document that shows:
The current land owner
The description and location of the property
Restrictions on the land usage
Charges and outstanding mortgages
Warnings that affect the property
Advantages of having a title deed
It’s an official document that shows the current land owner and individuals do not need to research the history of the title on the land.
A registered title is state ensured. If you have suffered a loss of property assets as a result of an error or omission in the register by the registrar, you may be able to obtain compensation.
By having a title, solving disputes emanating from rights over the land or ownership are easily resolved.
If you want to secure a loan, financial institutions will demand a registered title deed.
You can sell property with ease.
It makes your land easy to protect against fraudulent people.
Land Laws in Kenya
Land and the new Consitution
Classification of land
Under the new constitution, land has been classified into three categories:
Community land, private land, and public land.
Community land according to article 63 of the Constitution, is land that has been lawfully registered under the name group of representatives, land that has been transferred to a specific community lawfully, and any land which by an act of parliament is declared as community land.
Private land is land held by an individual either under freehold tenure or leasehold and any other land that by an act of parliament is declared as private.
Public land as defined under article 62 of the Constitution is State-owned land, unalienated land, land that has been transferred to the State which has no known heir, forests, minerals, reserves, seas, rivers, lakes, water catchment areas, land that falls in between low or high water mark areas, and any other land which is not stipulated as private. It is the role of the National Land Commission to administrate public land.
Land ownership by non-Kenyan Citizens
Under the new constitution, it was stipulated that non-citizens cannot own free land, and the maximum amount of time they can have a leasehold tenure is 99 years.
Laws of leases
Long-term leases
Section 54 (5) of the Constitution, states that the Register of Land is to register long-term leases and issue rental certificates for maisonettes, apartments, townhouses, flats, or offices transferring ownership if the property has been properly georeferenced and approved by the statutory body responsible for surveying the country.
Unlawful eviction
A tenant who is vacated contrary to the terms of his lease shall be immediately relieved of any obligation to pay rent or other monies due under the lease or to perform any obligations of the lease. A tenant is deemed to be vacated if, at the commencement of the lease, the tenant is unable to obtain possession of the land or buildings or any part thereof as a result of any act or omission of the lessor contrary to the terms, express or implied, of the lease.
The Functions of the National Land Commission
The National Land Commission is an independent commission that draws its mandate from the 2010 Constitution of Kenya, acts of parliament, and the 2009 National Land Policy. It was officially established under the 2012 National Land Commission Act.
Its mandate under the constitution includes:
Land management on behalf of the county and national government
Recommendation of National Land Policy to the national government.
Advise the national government of a thorough program of land title deed registration throughout the nation.
Organize land-related research and the use of natural resources then make recommendations to the proper authorities.
They should of their own accord or from a complaint brought conduct investigations on historic or present land injustices and suggest appropriate redress.
In land disputes, to encourage traditional methods of solving the disputes.
Evaluate premiums on fixed property and taxes on land as designed by law.
Have oversight responsibility and monitor land use and planning throughout the nation.
Mandate under the National Land Commission Act:
Alienate land on behalf of or with consent from the national and county governments.
Monitor the registration of all interests and rights in land.
Ensure that land designated for public use and state agencies is continually managed for its intended purpose for future generations.
Broaden and keep and powerful land facts control device at country-wide and county levels.
Broaden and inspire opportunities for various ways of solving disputes in land disputes and control.
Some of the transaction costs involved in the real estate process
In the process of purchasing land, there are various transactions involved that attract various fees. Beyond the price of land, in Kenya, there are more costs a buyer must account for. These extra costs are referred to as transaction costs.
These are costs that come during the purchase process. While some costs are fixed some are value based such as the type of real estate, the location of the property, commission fees, the documents you need, and the fees charged by the professionals you work with.
Let’s delve in and see the different costs.
Research fees
Digicurated offers research services that provide high-quality information that will help a client decide the best places to purchase a home based on their needs. They rely on data to create reports that will guide a client and help them make the right decision.
For instance, if you need to know the best places that offer high rental income, or the best locations with high demand for AirBnB clients or simply th elocations offering the best social amenities or green spaces. They will highlight the best properties in the report and if you decide to take the process to the next step, you will be able to visit the properties virtually showing you the floor plan and enabling you to measure the size of the rooms and see finer details of the house. The location of the house will also be pinned.
Lawyer fees
For any real estate process to take place, a lawyer must be present. In Kenya, the lawyers are governed by the Advocates Remuneration Order which controls the fees the lawyers should charge the clients.
The law is designed this way so that should you have any grievances about the fees charged by the lawyer, you get a place to complain and get help.
According to the Advocates Remuneration Order, the minimum amount payable to a lawyer is Kes. 35,000. General legal fees which include filing and disbursements cost about 1-2% of the property value.
The lawyer must conduct due diligence on matters about the land before and after the process. Also, after the approval of the land purchase, the buyer is required to set aside transaction fees required for the lawyer to process the transfer documents from the seller to the buyer.
Real estate agent fees
Having a real estate agent helps you a great deal during the purchase process. However, if you enlist Digicurated’s research services you may not need an agent as they will link you direct to the property owner or their lawyers/agent. Usually agents charge 3% of the value of the house to the seller.
Mortgage fees
In most cases, buyers finance their properties on credit. This means that the buyer is required to pay some transaction costs to the lender when returning the capital borrowed. These transaction costs include interest on the loan and additional costs that may arise such as insurance and prepayment penalties.
If the buyer’s contribution is high, the interest rate may go down. There is also a charge imposed on the buyers from the lender for a title search.
Search fees
These are fees incurred when verifying the valid owner of the land, other previous owners the land had, and transactions previously linked to the property. A search through the E-citizen platforms costs Kes. 500.
The buyer is also required to schedule a meeting with the Land Control Board which includes village elders and the assistant county commissioners. The meetings occur once per month and cost Kes. 1000.
Another option available to the buyer is by scheduling a meeting with the Special Land Control Board which includes the two transacting parties and the assistant county commissioners. This meeting is more frequent than the other one for the LCB and the cost is Kes. 5,000.
Tax
The tax levied on all the transactions is called the stamp duty charged after the completion of the sale process. The stamp duty is imposed based on the location of the land. For land in urban areas, the stamp duty is 4% whereas land in rural areas is 2%.
The other tax charged is capital gains tax as of 2023 is charged 15% on the total net gain value. One can choose to pay in installments within the stipulated time. Payments are only made through KRA iTax.
Utility Costs
After closing the sale, the buyer must account for utility costs such as water, electricity, garbage collection in urban areas, security costs, internet connectivity, and residential association fees.
Property Tax
Rental income tax
This is a tax charged on rent collected from rental properties. The tax imposed on rent is based on the type of real estate and its use. For example, the rental tax income for residential property is different from that of commercial property.
It is payable by all companies, individuals, and partnerships who rent out property either for commercial or residential use.
Rental income is charged a flat rate of 10% on the monthly gross rent received.
Capital gain tax
This is a tax levied on the profit you earn from the transfer of a capital asset such as property. The tax is paid by the seller and is 15% of the net gains the seller received. It is the final tax charged and hence not subjected to more taxation after payment.
Net Gain = (Transfer value – Incidental Costs on Transfer) – Adjusted Cost ( Acquisition Cost + Incidental Costs on Acquisition + Any enhancement Cost)
Stamp duty
This is a tax collected by the Ministry of Lands on the transfer of property. It’s paid by the buyer. In rural areas, the stamp duty imposed is 2% while in urban areas it’s 4%. In the event land is sold to charitable organizations, they are exempted from paying this tax.
Mortgage
This is a type of loan between a financial institution and an individual or organization to lend money for the purchase, maintenance, and construction of a house or any other type of real estate. It is usually given at interest and the collateral is the house.
There are two major mortgages include:
Adjustable-Rate Mortgage – this is where the interest rate in your mortgages changes over time. The interest rate changes periodically and there is a benchmark used to determine the change.
Fixed Rate Mortgage – Unlike the adjustable-rate mortgage, the interest on a fixed rate mortgage remains constant over the loan period.
How long does it take to process a loan?
Some lenders will have the money in your account in about 24 to 48 hours after submitting your application, while others will take up to 2 weeks to process your application. The time it takes for a lender to approve your application has a big impact on how suitable a loan product is for you.
What is a bubble?
The term ‘bubble’ in real estate is when there is an increase in the prices of property to an extent that it becomes difficult for people to afford. In addition, the increase in prices is not supported by any fundamentals and as a result, the prices go down significantly causing a bubble burst.
Main features of a real estate bubble
Increased property prices – A housing bubble is characterized by expanded costs that are higher than mortgage valuations making it difficult for speculators to meet their legally binding obligation commitments with credit suppliers.
Increased debt uptake – One of the major characteristics of a genuine bubble is an increment within the take-up of credits and more debt aided by the accessibility of cheaper credit.
Increment in property requests – Increment in property requests is brought approximately by speculations of rising costs and simple accessibility of reserves from moneylenders. These costs rise to levels excessively expensive by the public as financial specialists compete to place their stake within the few real estate items accessible within the market.
Is the Kenyan real estate market experiencing a bubble?
The real estate market in Kenya is currently not experiencing a bubble. However, certain factors contribute to the increase in property prices such as:
Increase in the population
Economic growth
Reduces credit supply
Increased demand for housing
Increase in house prices owing to increased income levels
Real estate marketing strategies
Real estate is a unique industry when it comes to building a marketing strategy. Some industries and businesses focus solely on digital marketing methods, while others invest in traditional tactics like postcards and billboards.
In real estate, you’re likely to do all these things. For the most part, most agents don’t define a target audience for their marketing strategy, they just want customers and buyers. The wider the net, the more people they attract and the more revenue they bring in, and the more homes they sell. However, it’s important to have a defined target audience to help you market your properties effectively.
So, let’s look at the different marketing strategies you can employ as a real estate agent.
Digital Marketing
The COVID -19 pandemic had many businesses move from the traditional forms of marketing to digital marketing. Some of the avenues in digital marketing strategies you can incorporate in real estate are:
i) Website
A website builds awareness of your personal brand as a real estate agent and promotes the homes you have for sale. More buyers and sellers are online than ever before. So, when you’re not online, you’re missing out on revenue and customers.
Having an online presence as a real estate agent also speaks volumes about your legitimacy and how seriously you take your job. At a minimum, it should include information about yourself (including an excellent bio), how to contact you, and any homes you are currently selling.
ii) Blog
Having a blog is another way to attract customers. The real estate industry is dynamic, and buyers will probably have questions on the market which you can readily answer in the different articles you write.
Be sure to link your blogs to your website so that more people interact with your business, hence creating awareness. Be sure to do thorough research on your target audience. What are their tastes and preferences, and what content or aspect interests them more in real estate? This helps you write content they relate to.
Also, be sure to do research on the real estate industry in Kenya, the current trends, and any other relevant information to equip you with relevant knowledge on the field and give your customers valuable content.
iii) Social Media
In the real estate business, social media is a tool you cannot afford to utilize. There are various ways you can use to market on social media such as a Facebook page that helps you touch base with potential clients and which you can share some of your blog content. An Instagram page to share photos of real estate properties you’re selling.
Other forms of digital marketing you can incorporate are paid advertisements and email.
Apart from digital marketing, you can incorporate traditional forms of marketing such as postcards and business cards, direct mail, and word of mouth.
Essential Real Estate Terms
Bubble – this is when there is an increase in the prices of property to an extent that it becomes difficult for people to afford.
HouseAppraisal – This is a process conducted by mortgage lenders to determine the value of the house during a sale or purchase. It’s from this appraisal that the lenders determine the mortgage to give.
Mortgage – This is a type of loan between a financial institution and an individual or organization to lend money for the purchase, maintenance, and construction of a house or any other type of real estate. It is usually given at interest and the collateral is the house.
MortgageRefinancing – Mortgage refinancing happens when an individual takes a new loan to pay off the original mortgage. Different types of mortgage refinancing include:
Rate-and-Term Refinance Loan – The goal of this type of mortgage refinancing is to change the interest rate and loan term without affecting the loan amount.
Cash-Out Refinance Loan – As the name suggests, this loan type is where one cashes out a portion of their home equity to take out cash to spend.
Cash-In Refinance Loan – Here is where one pays a lump sum amount of money to reduce their loan. This tremendously cuts the loan burden and could help you qualify for lower interest rates. However, before paying the lump-sum amount, it’s important to evaluate whether doing so will deprive you of more worthwhile opportunities.
No-closing-cost refinance– No-closing-cost refinance allows the homeowner to refinance without paying the closing costs upfront. Instead, the costs are put together with the loan amount.
Equity – This is the part of your home that you own aside from the mortgage remaining. While you legally own the house, your lender has an interest in the house until the loan is completely paid off.
Escrow – Money held by a third party until the transaction is complete.
Closing/transaction costs – these are expenses associated with the home apart from the actual cost. Both the buyer and seller have closing costs.
Title Deed – This is a legal document that shows the current owner of the property, history of transfers, and the type and size of the land the property is on.
Search – It is a process conducted before purchasing real estate. Where you look for property within platforms such as Arthisasa to check the status of the land or property you intend to purchase.
Transfer – Represents a formal handover of property title from the seller to the buyer signed by both parties.
Real Estate Investment Trust (REIT) – This is a passive real estate income strategy. Investing in REITs is similar to how one would invest in stocks and shares. Investors consolidate their finances to purchase real estate such as apartment complexes, healthcare facilities, and hotels. The investors will then receive a portion of their profits generated as dividends.
Yield– this is the total annual income for instance rental payments earned from the investment, as a percentage of the investment’s total cost. It is different from a return which also looks at the capital gains.
Conclusion
The real estate industry is vast and has many facets to it. If you’re an investor or a buyer, be sure which type of real estate you want to invest in and do your research to avoid losing finances. As a buyer, enlisting the services of Digicurated is a wise move and will help you make an informed decision based on data. For a seller, if you’re starting in the field, specialize first in one type of real estate then grow.
Remember, the real estate business in Kenya is a lucrative opportunity and knowing where and how to go about it, produces great yields and results as Kenya’s real estate market has the potential for higher returns. Foreign investors can also enter Kenya’s real estate market relatively quickly.
The introduction of REITs has also caused the real estate market to grow exponentially. Kenya also has a favorable business environment and a diligent workforce that attracts foreign and domestic investors to invest in property development in internationally renowned holiday destinations such as the Masai Mara National Reserve, Naivasha, Nanyuki, the Coast, and Nairobi.
Additionally,the property market in Kenya is primarily a rental market. The residential sector is currently experiencing the greatest demand due to a rapidly growing population and a growing middle class. A modern big house in Nairobi can cost $1.1 million in a developed country.
Real estate is a complex industry, yet vital to our economy and lifestyle. Whether you’re someone interested in buying their first home or looking to flip a house in Nairobi consider looking at property for sale along Ngong road or are curious about real estate as a career, it’s important to understand the real estate process and the different working dynamics involved.
Real estate is an industry that plays by its own rules. As technology, income, buying habits, and lifestyles change, real estate is becoming increasingly complex and exciting. It’s your job to stay on the ball and we’re always here to make it easier for you to make the right decisions.
The Kenyan law states that there is a difference between ‘disturbing noise’ and ‘noise nuisance’. The former is defined as a scientifically measurable noise level and the latter is any noise that may disturb or impair the convenience or peace of any person.
According to the National Environment Management Authority (NEMA), noise pollution means the emission of uncontrolled noise that is likely to cause danger to human health or damage to the environment.
According to the Environmental Management and Coordination Control Regulations (2009) for noise and excessive vibration pollution, to determine if a noise is loud, unreasonable, unnecessary or unusual, the following factors may be considered-
(a) time of the day;
(b) proximity to residential area;
(c) whether the noise is recurrent, intermittent or constant;
(d) the level and intensity of the noise;
(e) whether the noise has been enhanced in level or range by any type of electronic or mechanical means; and,
(f) whether the noise can be controlled without much effort or expense to the person making the noise.
In order to check whether the noise levels coming from an establishment one can use free decibel testing apps from the app store. Alternatively, you could also try taking a video with sound on your phone.
Noise pollution in residential areas has made it to the news lately with the Governor of Nairobi, Sakaja Johnson, revoking the licenses of 43 clubs. It is reported that county officials conducted noise assessment tests across the 43 clubs and found them at fault.
H.E. President William Ruto backed the move and assured the Governor of his support in making sure that noise pollution in residential areas stops.
On October 3, 2022, the Kenya National Chamber of Commerce and Industry (KNCCI) Richard Ngatia moved to save the closure of the 43 clubs following the order by the Nairobi City Council Alcoholic Drinks Control and Licencing Board to revoke liquor licenses of the clubs over noise pollution. It was agreed that all bar owners be invited to dialogue.
He urged all bar owners to follow the law as regards noise pollution in residential areas & ensure roads are not congested by their patrons.
On the other hand, the National Chairman of Pubs, Entertainment and Restaurants Association of Kenya (PERAK) Michael Muthami in an interview on Spice FM, argued that it is illegal for the liquor licensing board to revoke the licenses.
He added that the closure of clubs on the 29th November, 2022 came as a surprise as they were in the process of setting up a committee to get the members to toe the line.
He felt that there was a disconnect in terms of communication between them and the office of the Governor and they needed clarity on the statement he made about the closure. However, the chairman agreed that indeed noise problem was an issue.
For a long time, resident associations such as the Kilimani Project Foundation (KPF) have been lobbying NEMA to take action on entertainment establishments that refuse to abide by the law and put up the necessary measures to curb noise pollution.
The efforts have not been very successful and it was until the new government came into office and the Nairobi Governor set things in motion. In Karen, the Karen & Lang’ata District Association (KLDA) has also raised complaints over the matter and has sought the closure of some of these establishments.
When it comes to real estate prices, it’s common to see that quieter areas are often deemed desirable and therefore pricier than densely populated areas. Noisier areas even in less densely populated areas will affect the tranquility of these places and hence become a key determinant in whether or not one would be willing to spend a premium to live in such an area on the basis of privacy alone.
Due to increasing noise from human activities associated with recreation, religious and unorganized informal sectors, studies show that these activities abate high sound levels of noise which are injurious to city dwellers. Interruption of speech, interruption of sleep, and cardiovascular illnesses such as hypertension have noise pollution as the common denominator.
Sleep is a basic need and most people spend their time indoors or at least 8 hours of their days asleep. To make matters worse, there are those that suffer different ailments which become worse in noisy environments.
It is safe to say that noise pollution does affect property prices in the same way the size of the house, the number of bedrooms, availability and easy access to utilities, proximity to their workplace, and other social amenities do.
In most cases, noise pollution in urban areas comes from traffic noise (rail, motor vehicles and aircraft). In Europe particularly, noise pollution is a major determinant in property prices. Other continents, countries, and cities are also not an exception.
Studies such as Collins & Evans, 2008; have proven that there is a strong correlation between noise and property prices where the closer a property is to the source of noise pollution, the lower the sale price will be.
Houses located in an area in which noise disrupts normal activities (defined by a day-night sound level of 70–75 decibels) sell for 20.8 percent less than houses located where noise does not disrupt normal activities (defined by a day–night sound level below 65 decibels).
A study using a survey research design was done in Nigeria and it found that noise pollution has a negative impact on rental prices. The data analysis was based on sixty-one questionnaires retrieved.
The data were analyzed with descriptive statistics such as frequency, percentage and mean. The results revealed that noise pollution reduces property rental values.
If we compare the capital cities of Nigeria and Kenya there are several similarities between Abuja and Nairobi respectively. Some include solid road networks, remarkable architecture, world-class stadiums and supporting infrastructure.
It’s therefore possible to draw parallels between the two cities as far as real estate is concerned. The study recommends the development and enforcement of noise abatement measures to improve urban neighbourhood quality and increase property values.
In other countries where this kind of study has been done, they found that there are ten things in a neighbourhood that can devalue a house, namely: noise from the airport, train tracks, nearby highway, an athletic complex, power plants, landfills, cell phone tower, strip club and criminal activity.
Properties in close proximity to highways have 8-10 % reduction in value than those in a quiet area, real estate close or next to railways is 6.7 % decrease in market value and an increase in the noise of 1 decibel (db) decreases the value up to 0.3 % of suburban properties close to airports.
In Nairobi, there has been an outcry about the increasing construction of highrise apartment buildings by residents in areas such as Kilimani and Kileleshwa. The concern is that the infrastructure does not support an increase in residents in this area as this would strain resources such as water, power and also increase traffic which would automatically increase noise levels.
This will ultimately lead to a decrease in property values for those who paid a premium price for real estate in these areas when all the devaluing factors did not exist.
Some comments by residents show their frustration
The Kenyan home buyer is becoming more aware of the salient features that make a home worth the investment. Beyond the size of the house, beautiful interior, access to gyms and closeness to social amenities such as grocery stores, people are now paying close attention to their well-being and particularly mental health.
When children are not able to study or sleep well, their development as healthy human beings is put at risk and the effects of this is already being noticed in their poor academic performance.
Sleep is a basic need for all and ranks high up in the list and one would dare say above access to a good internet connection. People’s homes are supposed to be peaceful enough for them to rejuvenate after long working days. Noise pollution affects people’s ability to be productive and it will always be a major factor in determining whether a property is worth investing in or not.
Digicurated is an online marketing company curating content for real estate with a focus on property that safeguard the privacy and well-being of families.
House for sale
Location: Santack estate along Ngong road, about 600m from the Junction Mall
For first-time buyers, buying a house is one of the largest investments most individuals make in their lifetime and one that requires much thought and input. You can’t afford to make a wrong investment and acquire a property you wouldn’t give a second glance at!
If you’re like most people who make their first property investment, many questions flood your mind. Remember, there are no silly or dumb questions. Getting the right answers to these questions will contribute to you making a well-informed investment decision.
So, let’s delve into some of the questions brought up by first-time buyers.
Buying or renting
This is perhaps one of the questions that pop up in the mind of many potential first-time property investors across the board. The decision to buy or rent affects your financial health, personal goals, and overall lifestyle. Important to note is that the decision you make is pegged on your financial situation and the lifestyle you aspire to have or currently walk in. However, both require a degree of financial stability for payments and maintenance.
Some of the advantages of buying a house rather than renting are:
It provides a sense of security and freedom – Let’s get honest, knowing you must have rent every other month can get nerve-racking.
It provides a sense of pride – having a place of your own you can call home, where you are in charge of designing it to suit your personality is that icing needed to sweeten the taste of the cake.
Provides an opportunity to build on equity – equity in real estate is the probable value of the property minus the mortgage and all other expenses/debts incurred to acquire the house. As you pay your mortgage loan, equity on the house keeps increasing.
The value of land keeps appreciating, therefore, the return on investment of buying a house is guaranteed.
You could develop or flip the house in the short term and resell it at a much higher price.
If buying a property on its own land, you can build a servant quarter on it and earn some rent while living in the main house.
Increased financial gains – As the value of property increases, so does the rent.
Am I ready?
For first-time buyers, check your readiness by asking certain questions:
Do I have a stable job?
Do I have a steady income? If not, are there alternative income options?
How reliable is my source of income for the foreseeable future?
Do I have any outstanding bank loans/ debts?
Do I have income saved for a down payment?
Can I manage to pay off my mortgage, insurance, utilities, and taxes? The general rule of the thumb, your mortgage should not take more than 25 – 30% of your next income.
You can use the answers to the above questions as a yardstick to determine if this is the right move for you now or if you need to make some adjustment and postpone it to the future. However, if you can afford to spend a maximum of 30% to pay off your loan, then you’re good to go.
What’s the duration taken to purchase a house?
The answer to this question is not set in stone as several factors affect how fast or slow your home acquisition process will be. However, certain underlying principles apply. After you have seen the house you desire and settled on the pricing, it can take 30-45 days to process your loan and process papers for homeownership transfer. Therefore, closing in on a house can tentatively take 1 to 2 months.
How much will I need for a down payment?
One of the greatest hurdles for first-time buyers is the down payment. Realtors will require a down payment of between 5-20%. The percentage may vary based on the mortgage specifications and the lender’s requirements. Ensure you make a savings plan and stick to it. Sacrifice goes a long way in ensuring you achieve the goal.
How do I get the best mortgage?
Once you get your dream house, it’s painstaking going through the various terms and mortgage rates. However, you can do your homework beforehand by:
Consulting with your preferred bank
Also, if your job offers mortgages for its employees, look at the offer and do a comparative analysis.
Consult with someone skilled in the field.
Do SACCOs offer better deals?
One of the ways to get your dream house is to save with Saccos for a period of up to 5years to qualify for a mortgage loan. In Kenya, Sacco’s offers the best mortgage loans with low-interest rates and a more extended repayment period.
Let’s say you’ve opened a Sacco account and are saving Ksh. 5,000 monthly, your annual savings will sum up to Ksh. 60,000. The accumulated amount of this in five years is Ksh. 300, 000, and the better part, you can acquire a mortgage loan five times your savings. That’s a 1.5M mortgage loan at a very low-interest rate.
Some of the Sacco’s to consider that offer the best deals are:
Harambee Sacco – Harambee Sacco offers mortgage loans at a very subsidized interest rate of 7%. If you save up with this Sacco, you can get a loan ranging from KS. 500k – 4M. The repayment period is up to 25years.
Safaricom Sacco – for this Sacco, you must save up for one year to acquire a mortgage loan that sums up to five times your savings. The interest rate is 8% per annum on the reducing balance with a repayment period of up to 25years depending on the mortgage loan. Noteworthy is that the minimum amount of mortgage loan you can get is 3M and the maximum 8M.
Police Sacco – Police Sacco finances its members with loans to either purchase a house or construct one. The interest rate is 9% with a repayment period of up to 20years. The maximum amount of loan you can get is 4M.
As we land this plane, research is paramount in investing in property. Get your facts right, save up and look for the property that best suits you. Remember, there are no silly or dumb questions. Asking the right questions will help you make an informed decision which is the first step in landing that dream house.
If you need to consult, we are available to advise.
Jane Wambui was working in Saudi Arabia and managed to send Ksh 2M to her daughter here in Kenya and she wasted it all.
This story was captured in an interview by Tuko News Youtube channel.
This, unfortunately, is one of many stories.
Kenyans working hard in the diaspora have wasted millions of shillings sending money at home to their relatives, expecting to get returns from it.
Only to come back many years later and discover, their money was wasted and nothing worthwhile came out of it.
This is a sad state of affairs.
Why Kenyans abroad invest through relatives
But why do Kenyans abroad attempt to invest in Kenya through their relatives?
It’s probably because they trust them.
Unfortunately, as good as your friends and relatives are, they’re not professionals.
Did you know if you had the right information, let’s say if you wanted to buy a house that can be used for Airbnb, that if you bought it in the right areas you could earn an average rate of Ksh 7,225 per day.
That if you bought property in the right areas, your investment could increase by 14% annually?
Imagine spending 35,000,000 in 2023 and your house appreciating to Ksh 38,500,000 in the following year.
This is the reality for those who have real estate in areas like Spring Valley.
Information is POWER
Information is POWER. Without information, you’re bound to make foolish mistakes with your hard earned money
Information is power and every successful person knows this.
Before developers build apartments or houses anywhere in Kenya, thorough research is done for them to know which areas are the best.
They probably pay millions for this service from companies like Hass Consult that do a lot of research in real estate.
You shouldn’t take your financial future casually.
If you buy real estate in the right areas you could literally stop working and live off your investment.
You’ll make enough income to afford you the kind of lifestyle you want and provide your family a secure future.
You also want to live in a peaceful, calm environment without the hassle and bustle of life.
A place where your family can be proud to call home.
A place that offers you the conveniences of a modern life like gyms and swimming pools while at the same time access to nature and green spaces for you to relax in and enjoy.
Probably, you don’t mind being able to grow your own food in a little garden and also have your kids enjoy some healthy outdoor activities.
Working with the Ministry of ICT
Digicurated Founder Ainaeny, receiving a certificate from former Cabinet Secretary for ICT Joe Mucheru and KEPSA CEO Carol Kariuki
Our company was established after receiving support from the Ministry of ICT based on our track record supporting businesses outside Kenya.
We have had the privilege of offering our services to companies in Kenya US, UK, and Australia. Some of those companies include TIFA research, 4OVER4, 4EVERCARDS, 4KIDS, TROUVA, FITNESS AT HOME and many others.
Basically, whatever we do, we do it well.
Finding information and curating it in a way that customers can consume it easily is our secret sauce.
We discovered a gap here in Kenya where people like you don’t have access to secret information when they want to buy real estate.
Billionaires and millionaires can afford to pay research companies like Hass Consult millions to get advice on where to build but no one is helping people like you and me make informed decisions before buying real estate.
This secret information is now available to you.
You need to know the best places to buy if you want to rent It out normally or use Airbnb or simply a place with the best social amenities like malls, restaurants and even green spaces.
You don’t want to buy a home just because it’s cheap, only to find that living there is no what you had in mind.
Helping Kenyans abroad
When we helped our first client Irene Mainda a Kenyan living in the UK find the right house to buy in Kenya, she had no idea most lucrative place to buy for Airbnb.
It was challenging to compare properties in the coastal region and in Nairobi. She didn’t know that she could get a double storey house with a compound in upmarket areas like Runda and Loresho and that there are green spaces close by that could offer her the peace and quiet lifestyle she wants when she comes on holiday in Kenya. That all these places are less than 1 hour drive to the JKIA airport via the expressway.
Irene also did not know the process of buying real estate in Kenya, the costs and timelines were.
After enlisting our services, all this information was presented to her in a beautiful report that captured the real estate with photos and also added the cost implications and timelines of the entire process.
She also gets access to an interior designer with recommendations for her new home.
It’s all about YOU
You can own an asset that brings you financial freedom.
Wouldn’t it be nice to have a beautiful home for your family vacations?
If you choose to make it an Airbnb home, how would you feel if you were earning a daily rate of $54 from your property?
All the secret information that millionaires and billionaires get can be accessible to you too. Order our consultancy services today. Tell us what you’re looking for
Size of house
Locations of interest
Budget
Any other information
We’ll do the research to find the right real estate you should buy and include all the necessary charges to complete the sales process. You have the option of getting your own lawyer but we do have partnership with a lawyer experienced in real estate transactions. PLUS we will help you get the house furnished by a partner interior designer.
Save time hopping from one site to another
Let us help you find real estate with
Open and common spaces
Recreational parks and community centres
Vibrant neighbourhood
Shopping centres, schools, work and recreation areas
We have connections with over 30 developers and real estate companies to help us get you the best house
Get the best real estate options that meets your requirements.
Save yourself the drama of dealing with fake agents
Legal support to make sure everything is legitimate.
After sales support with professional’s interior design recommendations for your home
Cheap is expensive
Billionaires and millionaires consult with real estate firms like Hass Consult and pay millions to get information about where to invest and build real estate
This can go upto $20,000 which is about Ksh 2,500,000
But with us you only need to pay $1000 or Ksh 134,000
Your investment is not less important than that of billionaires and millionaires with development projects.
Smart business people invest in information because it saves them millions in the long run
If you wanted to buy real estate and use it for Airbnb you could spend 0 in information and buy a house where Airbnb is not popular
But if you invest your money with us and we show you locations where you can make $54 per day in Airbnb.
We know the areas where properties are appreciating faster than in other areas and sometimes these are not the areas everyone sings about.
Just because a place is popular, doesn’t mean it’s the best option. What suits one person is not necessarily the best option for you because this is not a a one size fits all.
It’s about YOU!
Valuable information should not be a secret just because you’re not a developer.
When it comes to your financial freedom and the well-being of your family, don’t cut corners.
Book an appointment with our Lead Real estate Researcher
Difference between virtual land and physical/real land
How to buy land in the metaverse
What is the metaverse? Is it an old wives’ tale or can one actually have a virtual real estate property?
The subject of the metaverse and virtual real estate has been a touchy one, especially in the Kenyan market because it has not been explored to length. Before I set myself to write this article, I explored the option of the metaverse, what it is, and what is the process of getting there to first prove its workability and how feasible it is to the Kenyan Market, and I must confess I loved the findings.
So, journey on with me as we demystify this “myth.”
The Metaverse Explained
The concept of the metaverse although new to some has been there for a while and many articles and stories narrated about it. First of which dates to 1922 in a science fiction story by Neal Stephenson in his novel “Snow Crash.”
In July 2021, Mark Zuckerberg placed the future of Facebook on the Metaverse. To prove its commitment, Facebook had a change of name to Meta and Zuckerberg promised to invest millions of dollars in building the metaverse. Other companies like Disney, NFL, etc. also placed their bets on the metaverse as the technology that will transform the future.
Soon after this, according to Macro Hive, metaverse-related cryptocurrencies surged an eye-popping 37,000% in 2021 — far exceeding the gains of bitcoin.
To the uninitiated, the metaverse is a simulated digital environment similar to what one can find in the real world.
It uses technologies such as virtual reality, augmented reality, blockchain, and various social media aspects to create digital spaces that enhance rich user experiences that mimic the real world.
It’s a world where literally everything you see in the real world can exist only in the digital space including yourself in the form of an avatar. How cool is that! The metaverse being a digital space means no one is limited to getting into it.
Take social media, for example, anyone with access to the internet and a smartphone can subscribe to and join different social media platforms, your current geographical nation notwithstanding.
Another way to look at the metaverse is through gaming experience with games such as Fortnite, and Minecraft providing such an experience through virtual reality and other technologies alike.
Virtual reality refers entirely to digital spaces that are accessible through special electronic equipment such as headsets. By putting on the headsets, the users interact in a world that seemingly looks and feels real to the user.
The metaverse is similar to VR only without the headsets. In it, you get to interact with people in the form of avatars, hang out, go to shopping malls, and invest in property as you would in the real world.
Now let’s cut to the chase and get to how we can acquire property in the Metaverse.
Virtual Land
Who in their wildest dreams would ever come to think that one would own property digitally leave alone invest in it? However, technology has made it possible for this to happen.
The virtual real estate business has been on the boom with superstars such as Snoop Dogg and large corporations such as Samsung, JP Morgan, and PWC acquiring plots of virtual land for various purposes.
Those who got wind of it early are already making huge returns.
According to Forbes, in 2021, the average price for the smallest plot of land on Sandbox and Decentraland – two of the largest platforms on the metaverse was just under $1,000. Today, the price has gone up to $13,000.
Should you buy land on the metaverse?
First, it’s important to address a very important concern that there is indeed no hard cap on the supply of virtual real estate on the Internet. As the market demand increases, new virtual land will continue to be created.
Before buying your first land in the virtual world, consider the fact that the value of anything and property for that matter, is determined by the law of supply and demand.
Just like at one point having a webpage or a Facebook page was essential for any business, in the same way having a virtual or 3D world created through gaming companies like Fortnite, Minecraft and Roadblocks will be a must-have.
Similar to the value of a website domain which is determined by quality traffic, the value of virtual land will be determined by various factors including location and proximity to certain world districts, and other central locations, virtual theme parks, popular games scenes, access to foot traffic and specific communities.
Buy and flip–
This is when you buy a property and hold onto it for a certain period, usually a short time, and then aim to sell the property at a profit. Those who flip properties generally buy distressed real estate properties and then sell them at a profit.
This approach only works if you’re adding value to your property above the market rate for that type of plot during the flipping period and to give it more value than the market rate.
Buy and hold–
This refers to purchasing virtual real estate and holding it for a much longer period before selling it at a higher price. In the meantime, one may opt to rent it out or use it for their own use. If the value of your property outpaces inflation then you stand to make a profit.
Unlike in the real world where one can get a mortgage, currently, most buyers in the virtual world are making the full payment upfront as the cost of it can be as low as five figures. In addition, this is because the virtual land investment industry is not fully established.
Difference between virtual land and physical land
When it comes to investing, both physical and virtual real estate share several similarities. However, there are also some differences such as:
Some virtual worlds allow you to teleport: in this case, you can type in the coordinates of a location and incidentally arrive there. However, in other virtual worlds, you may need to begin from a set starting point like you would in the physical world at walking or running speed.
There are low overheads in virtual land if any at all: there are no land rates, or council rates for public services, such as garbage collection. There are also no electricity or water bills.
Fewer unexpected costs such as tenant issues, natural disasters, or poor construction materials.
How to buy land in the metaverse
Because the metaverse is a digital space, the purchase of land will be made using cryptocurrencies which is a form of digital currency.
The most popular platforms for land acquisition in the metaverse are Decentraland and the Sandbox. However, before creating an account with these platforms, you will need to first add the Metamask into your browser which will serve as your wallet to store your Ethereum (ETH) Currencies.
Ether is a cryptocurrency in which assets on the metaverse are priced. This is similar to how in the real world, where the currency widely used is the US dollar.
Coins associated with the creation of a virtual space/digital world
One of the largest in this space is Axie Infinity (AXS), which is a play-to-earn gaming platform. Another is Decentraland (MANA), which is a virtual world that allows ownership of land among other things.
The other coins we include are Sandbox (SAND), Enjin Coin (CNJ), and GALA (GALA). Aavegotchi (GHST), Terra Virtua Kolect (TVK), Ultra (UOS), Phantasma (SOUL), RedFOX Labs (RFOX), and Gala (GALA).
The best coins for owning virtual real estate are MANA for Decentraland and SAND for Sandbox which you acquire from buying Etherium from the Metamask.
The Ethereum is converted automatically in the different platforms to either SAND or MANA.
To get the Metamask, simply go to https://metamask.io/ or just type Metamask on your browser and click download.
You will afterward be redirected to a different page where you will have to install Metamask either as an extension to your browser or download it on your IOS or Android device. The best out of the three is to add it as an extension to your browser. The browsers that support Metamask are Google Chrome, Firefox, Brave, and Microsoft Edge.
After setting up your account, the next is to buy Ethereum (currency with which you will use to purchase the different assets on the metaverse).
There are many options available with which one can buy Ether in the Metamask such as:
Buy EHT using Wyre
Buy ETH with Transak
Directly deposit Ether
Buy ETH using Wyre
This option will work best if you’re in Europe or the West. However, if you are in Kenya, one cannot directly buy from this platform as Kenya is not listed in their database. However, if you have a VPN, you can purchase Ether. But why go through the hustle?
Buy ETH with Transak
Although one can purchase Ether using this platform while in Kenya, the process is a bit longer compared to Wyre. However, you’re free to use this option.
Directly deposit Ether
This is the best out of the three options. It is where you deposit Ether from another cryptocurrency account. To do this, I recommend Coinbase. Coinbase is one of the largest platforms for buying and selling cryptocurrency and can be used as a cryptocurrency wallet.
By clicking the first option, you will be redirected to another page where you will input your email address to get started.
For Coinbase,
You will need to be at least 18years old as you will be required to give proof of your government-issued ID
A computer or smartphone connected to the internet
A working phone number that you will link to your account as a verification message will be sent to you via SMS.
Link a payment method by using your debit card. NCBA prepaid cards are not acceptable. Whether you’ve opened an account with Equity, The Co-operative Bank of Kenya, ABSA, or NCBA, your debit card will be accepted. Just be sure to load an amount that will help you to buy Ether.
Noteworthy is that Coinbase will not charge you any amount to create or maintain your account.
After setting up your account, you will get an interface that has various cryptocurrencies available for trading. If you already had a Coinbase wallet account and had bought Bitcoin, you can convert your Bitcoin to Ether. If you’re just new, you can just go ahead and buy Ethereum.
Once you have opened and funded your Metamask wallet, you are now ready to begin buying virtual land.
Another option is to buy Etherium using Binance. Binance is a platform where you can buy, trade, and hold cryptocurrencies. It is home to the world’s largest global cryptocurrency exchange by trading volume and user base, and offers a wide selection of metaverse tokens for users to add to their portfolio. The best part is that its connected to Mpesa which means you can buy crypto using your Mpesa account.
Input either your email or mobile number after which you will be redirected to a page where you can sign up.
There are various requirements needed such as:
Personal information
Government ID
You will need to sign up using a laptop or phone with a working camera for facial recognition
Once you have ascertained you have these requirements, sign up and follow the process.
After signing up, you will see various crypto’s available for purchase which are connected to the various portfolios
Purchasing land on Sandbox
Sandbox is the platform where celebrities such as Steve Aoki, and Snoop Dogg, have purchased land. A plot of land situated near these two celebrities is currently on sale for a whopping $2.5 million. However, not to worry, there are cheaper plots. Although they may not be in the urban parts, their value will soon increase. Take for example how the value of land in places like Ngong road has gone up which was not the case years back.
2. Create your account by linking it to your Metamask account and follow the steps.
3. Once you’re done setting up your account, press on the buy land where you can see the variety of lands available for purchase.
4. Clicking Buy, OpenSea (an NFT marketplace) will launch, taking you to the property listing.
Purchasing land on Decentraland
While The Sandbox is attracting celebrities, Decentraland has been the home for tech giants such as Samsung.
As earlier mentioned, before purchasing anything on Decentraland, your Metamask must be funded with a cryptocurrency called MANA. You can buy MANA from Coinbase and transfer it to your wallet. Once you’re set, here are the steps to buying virtual real estate on Decentraland.
2. Scroll down to where you will see Trade and click to start browsing
3. Afterward, click on sign-in followed by connect
4. You will be required to sign in using your Metamask account
5. After signing into your account, click on land and you will see the available plots for sale.
Conclusion
When the internet landed, no one ever imagined it would be such a force to reckon with, and some even wished they had embraced the concept earlier to get a foot ahead of Amazon.
This is a similar narrative to the metaverse. Although people are skeptical about it, it doesn’t negate the fact that it’s a worthwhile investment. Covid-19 transformed the landscape of the world with everything going digital and more than marketing, assets such as land have found their digital space.
Similar to land physically, the land on the metaverse only appreciates. Therefore, it’s a worthwhile investment with companies such as Adidas, Samsung, and individual investors rushing to get a plot of land in the space. So, waste no time and get your investment in the metaverse with The Sandbox or Decentraland and become a landlord. It’s an investment worthwhile as the future is getting more digital.
You’ve probably consulted your friends and family when you finally decided to purchase a home. Some of whom may have advised you to buy a home because the time has come and you seem to have all your ducks on a row.
However, if you still have your reservations on whether buying a house is the right move for you, here are 7 reasons why you should consider buying a home.
1. Pride of Ownership
This is one of the major reasons individuals buy a home. Having a space, you can call your own, doing renovations without looking behind your shoulders if it’s acceptable, and customizing the space to suit your uniqueness, among others.
According to National Association of Realtors, in 2021, 27% of all home buyers reported the major reason they purchased a home was the desire to be a homeowner.
2. Appreciation
Over and above the pride of owning a house, appreciation is another factor to consider. The value of your house will only appreciate as over time whether there’s a recession on not. Owning a home as an investment is one of the ways to beat recessions.
3. Predictability
Unlike rent, your fixed-mortgage rate payments will not increase over time. Therefore, your house costs are likely going to decline as you own the home longer. In addition, as your rental income increases, you will have the opportunity to clear your mortgage sooner.
4. Equity
When you own a house and make your mortgage payments, you build on your home equity interest. Home equity is the appraised value of your house minus the outstanding loan balance. The equity your house accrues is a ready savings plan in place.
5. Stability
Buying a house gives you and your family security and stability. Owning a house gives you a sense of stability as you get to stay in your neighborhood for long, build meaningful relationships, and are not worried about the increase in rent that would result in you moving.
6. Tax benefits
Here in Kenya, if you take a mortgage when buying a house, you get to enjoy certain tax benefits such as allowable deductions on your income, hence paying lesser tax.
7. Offers an opportunity for a long-term investment
If you’re considering settling down permanently, then buying a house equates to a good financial bargain. It offers an opportunity for wealth creation as the property appreciates in value. Also, should you want to buy a house for investment purposes such as renting it out, it offers you an assured source of income even after retirement.
Bottom line
Buying a house is a worthwhile opportunity that you shouldn’t forgo. Consider the amount of rent you’re paying monthly to own a house and use that rent amount to pay your mortgage and ultimately build on your house equity.
Although your decision to purchase a house will obviously be determined by your budget and what’s available in the market, consider going for a house that has it’s own compound. We foresee a preference for houses with compounds and green spaces in the future as the supply of these reduces. As the economy grows and people’s lifestyle choices increase, green spaces are likely to offer a more rewarding quality of lifestyle. People may want to grow their own food for instance and having your own compound will be of such great value. Check out some of the real estate for sale in Kenya that will offer the best returns in future.
For most of us, the dream of owning a house is well and alive in us. However, most of us are stuck on fulfilling the dream by buying a house or building. Why should you build a home and yet you can easily buy one?
Here are some of the reasons why you should consider building a house.
1. You can have exactly what you want
Building a house means you get to oversee the whole process from start to finish. You get to dictate the space you want and the design you desire to suit your unique taste. So, from the moment you move in, your personal stamp will be on the house, and it will help in making the space feel like home.
With the development of new technology, building plans have become more flexible. All you have to do is contact the right company and you can design the entrance to your liking, the backyard, etc. Go all out! After all, you have a blank canvas.
2. You will have your home built according to the latest standards
Investing in the process of building a new home is a sure way of guaranteeing that your house utilizes modern technology and standards. You can incorporate modern designs such as a walk-in closet, and simple light fixtures among others.
Based on this, you will have the assurance that your house was built using quality materials and not those that will disappoint you and need repair with minimal usage.
3. It’s more efficient and requires less maintenance
By building, you can ensure more eco-friendly appliances are used like water-conserving plumbing fixtures, solar panels, etc. are incorporated. This will help you save and reduce utility costs.
A builder warranty is taken by the developer for a new house, issues protection to the owner for ten years, and covers any defects found once the person moves in.
5. No mortgage costs
Opting to invest in building a house means you have a considerable amount saved up. Banks and lenders are usually hesitant in offering loans to individuals building new homes. Of course, the building process will take a considerable amount of your income, however, planning and saving up for it in advance work to your advantage.
6.Reduced risks
Cases of houses crumbling down because of poor construction have been on a rise. When you vet your builders, and your design, and oversee the construction process, you reduce this risk.
7. Price control
When you oversee building your house, you get to monitor the sources of the material. This helps you control the pricing based on your budget and can quickly pay when convenient for you. This gives you a controlling factor as you determine the price of building a house vis a vis buying thus determining which option is cheaper based on your house design.
Bottom line
Building a house allows you to walk through the journey of what it entails and allows you to customize your house to your preference. Also, you get hands-on experience of the process as you’re overseeing allowing you to know the dos and don’ts. This experience is beneficial especially if you’re considering investing in properties in the future.
We foresee that in the future new building materials will emerge that will replace stone or concrete which are currently the main materials used. There will be cheaper yet durable building materials developed through innovation and technology. Already people are building container homes that look just as good as stone houses. Exciting times are indeed ahead and we should keep our eyes on the look out for this.
Perhaps you’re still not convinced about building a house from scratch and would rather buy a stand alone house that you can expand. Check out some of the best real estate houses for sale .
Is it cheaper to buy or build a home? When first-time buyers set to make that investment and purchase property, they are faced with two conflicting questions “should I buy or build?”
To best help answer your question about whether it’s cheaper to buy or build a home, let’s delve into the advantages and disadvantages of either buying or building.
Advantages of buying a house
Faster move-in time – in comparison to building, buying a house means you can schedule a move-in date.
Cost – buying a house means you have the advantage of bargaining power. For example, if a seller has had their house in the market for a while, they may be willing to negotiate the price downwards. Also, you can leverage competing house prices within the area.
Convenience – if you’re looking at living in a prime location, it will probably be easier to find a house to buy rather than finding the land to build.
Ability to budget for renovations over time – As your budget allows, you can make renovations to an existing home rather than focusing all your resources on major renovations in the case of a building.
Disadvantages of buying a house
The house might need repairs – while it’s practically a new house for you, the house has already been in use. Depending on the age of the property, you might end up paying for repairs much sooner.
Compromises – the odds of finding your “perfect dream house” may be low. So, you’ll have to settle for compromises such as a few bedrooms, a small backyard, etc. When you find a house that’s in line with your price range.
Competition – while you have the advantage of bargaining power, you may face competition from potential buyers. House sellers receive an average of about four offers. Therefore, if your bid is too low, you may not make the cut and end up forfeiting the house.
No builder warranty – newly constructed houses come with a builder warranty that offers some protection for major problems. If the house you’re buying is not new, this warranty is forfeited.
Advantages of building a house
Get the property of your preference – building your house eliminates the compromise factor as you get to build what you envision your house to be. It also allows one to enjoy playing with unique tastes and features you would desire in your house unlike buying an already existing house.
Quality assurance – building gives you a sense of good quality as you are the one in charge of every step. Hiring a good contractor, a good foreman, and buying quality materials to build.
I know you’ve probably heard a story or stories of people buying an expensive house only to find out it was built with substandard materials.
Reduced risks – cases of houses crumbling down because of poor construction have been on a rise. When you vet your builders, and your design, and oversee the construction process, you reduce this risk.
Price control – when you oversee building your house, you get to monitor the sources of the material. This helps you control the pricing based on your budget and can quickly pay when convenient for you. This gives you a controlling factor as you determine the price of building a house vis a vi-buying. Thus determining which option is cheaper based on your house design.
Wider market appeal – as your home is an asset, when you decide to sell it later, a newer structure could give you a competitive advantage.
Disadvantages of building a house
More time – Although building a house saves you the hustle of “house-hunting” it might take a relatively long period to complete the house. You’ll need to consider that if you’re paying house rent elsewhere during the construction process, that’s an extra cost.
More decisions – Although working with a blank canvas gives you the leeway to customize the design to your liking, it also involves more decision-making in comparison to buying. This can get challenging especially if you’re busy and can’t find a reliable contractor who’ll care about the details that really matter to you.
Challenges from contractors – there are plenty of hiccups that can occur in the construction process such as miscommunication, delayed response time, and other issues with the contractors.
Cost overruns – when building, a lot of things that you hadn’t anticipated may come up. You may end up incurring expenses you hadn’t budgeted for or end up paying for materials at a higher cost than intended among others if the prices of materials change during the construction period.
Bottom line
Is it cheaper to buy or build a home? As you decide on which of the two approaches works best for you, it’s important to consider that both processes include plenty of costs and potential stressors. However, the result should feel fulfilling.
Consider the properties you’ve toured, your expectations for this new home, and your timeline for moving in. If you ultimately settle for building the house, then have fun as you enjoy your dream house coming to life. Also, if buying becomes your ultimate option, enjoy your new home!
We see a time coming where the uncertainty of whether one should build or buy will be slim. This is because technology would have advanced. Nairobi and Kiambu are counties that are majorly known to have collapsed buildings. The emergence of technology that helps solve this problem at construction stages will have developed.
Real estate as a whole is an industry that has been slow to accept technology in its space, therefore, those in real estate who work closely with IT companies stand a chance to be on the cutting edge in the future.
Also, the materials to build a house won’t be as scarce, and the process of acquiring property either by purchasing or building your own would be aligned. Meaning that it won’t make much of a difference to buy a house or build one. Also, the tastes and preferences of different consumers would have evolved from the normal residential houses we have available.
Check out this 2 bedroom property for sale along Ngong road something that’s hard to find nowadays in Nairobi.
Is buying property a good investment? Which is better: buying a car for an Uber business or purchasing land?
According to Trading Economics, the inflation rate in Kenya as of July 2022 was 8.3% the highest recorded increase since 2017.
Investing in both land and or a car for Uber business is both profitable since both a car and land are assets. However, which is better? Which will act as a buffer against the rising inflation? Join me as we go through which option is better. Which option will bring a better return in 5 years?
A Car for Uber business
The cost of purchasing one, getting an insurance cover, registering it, and other charges involved is Kes 1,000,000.
Let’s now look at the net annual income and assume you place it on a taxi-hailing company like Uber.
INCOME
DEPRECIATION
Year 1
Year 1
Net Monthly Income = 40,000
Original Value = 1,000,000
Net annual income40,000*12= 480,000
30%*1,000,000= (300,000)
Value = 700,000
Year 2
Year 2
Net Monthly Income = 35,000
Value = 700,000
Net annual income35,000*12= 420,000
30%*700,000= (210,000)
Value = 490,000
Year 3
Year 3
Net Monthly Income = 30,000
Value = 490,000
Net annual income30,000*12= 360,000
30%*490,000= (147,000)
Value = 343,000
Year 4
Year 4
Net Monthly Income = 25,000
Value = 343,000
Net annual income25,000*12= 300,000
30%*343,000= (102,900)
Value = 240,100
Year 5
Year 5
Net Monthly Income = 20,000
Value = 240,100
Net annual income20,000*12= 240,000
30%*240,100= 72,030
Value = 168,070
Total Net Income = 1,560,000
Salvage Value = 168,070
So, the total Net income after 5 years =Kes 1,560,000
Less original cost of the car. =Kes 1,000,000
560,000
Add car scrap value. =Kes 168,070
Profit from the use of the car for 5 years =Kes. 728,070
Assumptions:
The car will lose value every year of 30% pa as a result of wear and tear and the care being obsolescence.
That the value of the monthly income reduces each year by Kes. 5,000
That the car was on hire for the duration of 5 years.
That the vehicle brought in income therefore, all cash was profit to the investor.
Land
Scenario 1
The original price is Kes 1,000,000
Appreciation rate: 10%pa
After 5 years, the value of land will be 1,000,000 * (1+10/100) ^5 = 1,610,510
Profit =1,610,510 – 1,000,000 = 610,510
Scenario 2
The original price is Kes 1,000,000
Appreciation rate: 20%pa
After 5 years, the value of land will be 1,000,000 * (1+20/100) ^5 = 2,448,320
Profit = 2,448,320 – 1,000,000 = 1,448,320
Assumptions:
The appreciation is higher than the inflation rate as real estate investment is known to form a hedge against inflation.
Land as an asset can never depreciate as it’s considered to have an infinite useful life.
Scenario 1: Appreciation rate is 10% pa in places that have moderate demand for land.
Scenario 2: Appreciation rate is 20% pa in places that have a high demand for land.
The land is assumed to be vacant with no economic activity taking place.
Comparison
For the purposes of constant income and cash flow, buying a car is a suitable idea. However, the income earned should be re-invested in either the purchase of another car or in a more stable investment.
Additionally, for those who are risk averse, you can consider purchasing a piece of land and selling it in the future at will.
Land is a unique asset whose value cannot depreciate.
With land, you can construct a property on it, which as a form of real estate its value of depreciation is low, and you can generate income from rent.
In conclusion
Buying property is a good investment as investing in land is more profitable in the long term. However, if you’re looking for a short-term investment, consider buying a car for the Uber business.
Just be sure to use your profits wisely because, unlike land, the value of a car depreciates within time hence you can use the profit to re-invest on a lasting investment like property or land or in buying another car to keep your business going.
Owing to the rising in inflation levels, there will be an increase in rental units as individuals will prefer renting a house rather than being a landlord. You can take advantage of the gap now and invest in land and residential real estate.
Check out the best real estate for sale in Kenya. Happy investing!
Is investing in real estate in a recession a possibility? Recessions are no new thing in the country and the world at large. Recessions are characterized by high unemployment rates, falling stock prices, high-interest rates, and loss of consumer confidence.
In 2007 when Kenya faced election violence, house prices took a steep, stock prices reduced, and there was high inflation in the country. The recession during that time took 10 years which in the short term, wasn’t a good time to invest in real estate.
Since then, the nation has encountered high economic times. According to statistics by United States Agency for International Development, Kenya has been one of the fastest growing economies in Africa from 2015-2018 with an annual average increase of 5.9% and a GDP of $95 Billion.
However, in 2019, the global pandemic hit our economy hard. The GDP fell from 6.3% in 2018 to 5.6% in 2019. Until then, we have been trying to rebuild our economy as all sectors of the economy were hit hard.
Even now when the pandemic has taken a dip, the country is yet faced again with a recession owing to the increase in the level of inflation in the country because of increased fuel prices.
Despite the numerous recessions that have taken place, the value of the real estate has increased in recent years. According to the Kenya National Bureau of Statistics, the real estate sector experienced a growth in 2019 of 5.3 from 4.1% in 2018.
So, why is this so? And what does that mean for you as a homeowner or a real estate investor? How can you benefit from it?
Let’s discuss whether it is a good idea to invest in real estate in Kenya in a recession.
Why buy property in a recession?
1. Housing is a basic need
Despite the nosedive in the economy, housing will always be a basic need. Therefore, there will always be a demand for property.
In a recession, we can resist buying a new car or a new phone, but no one can voluntarily decide to be homeless.
Most investors prefer investing in real estate during a recession as the housing prices have gone down and as the law of economics says, when prices go down, they can only go back up.
Therefore, they purchase the house during a recession and hold it to sell it later when the economy has stabilized.
For homeowners, you can consider renting out your house or apartment and get rental income. Rental income offers a safety net even during times of recession.
2.Residential property is more stable
During a recession, investing in residential real estate offers a safety net and security.
Commercial properties have been considered more stable than residential properties. After all, some companies have been there for 20 years. However, the pandemic proved this theory wrong with most businesses closing as they are unable to pay for the rental space and with their employees working from home, the property lost its value.
Commercial property is subject to some market forces which do not necessarily affect the residential property. When businesses closed, individuals took advantage of the reduction of interest rates by the Central Bank of Kenya to take mortgages to buy property. This is because people need a home regardless of what is happening in the world.
3. Real estate investments have a propensity of being stable
During a recession, investing in property offers lucrative opportunities and stability to investors. Unlike stocks, residential property is not subjected to daily trading hence it’s less volatile.
In the recession we are experiencing as a nation, homeowners and investors were not only cautioned by residential rental income but also the security of having a roof over their heads enabled them to think of more lucrative ideas to stay afloat during such trying times.
What sectors in real estate are likely to do well during a recession
For most Kenyans who desire to live in luxury homes, finances still serve to be a problem.
The economic recession we experienced and are currently going through has seen a majority of middle-class earners looking for affordable housing in the outskirts of Nairobi in towns like Ngong and Kileleshwa. Therefore, developers and investors alike strive to purchase more houses in the developing towns resulting in an influx of people.
The low-middle income houses have sold more than high-end luxury houses as Kenyans look for affordable houses. Also, the affordable housing agenda by the government of Kenya has fostered the purchase of low-middle-income houses.
Bottom line
Despite the nosedive in the economy, housing will always be a basic need. Therefore, there will always be a demand for property.
During a recession, investing in residential real estate offers a safety net and security in comparison to commercial property as it’s not subject to some of the market forces.
It is, therefore, a good idea to invest in real estate in Kenya during a recession as it offers many lucrative opportunities.
As we know that recessions are bound to be in the future, the majority of houses in such times will be owned by real estate investors as they will continue building even when economic times go down, because people have to have a roof over their heads. This will move the real estate model from a homeownership model to a rent-based model.
Additionally, as disposable income left by the buyers to invest in real estate will be low, start-ups will bank more on the government’s affordable housing plan and we’ll see more residential homes taking shape into commercial real estate resulting in an increase in mixed-used property.
If you’re looking for a stand-alone property for investment, check out the best real estate.
Digicurated 