Best Places for Profitable Real Estate Investment in Kenya

The Kenyan population will more than triple over the next 40 years increasing the pressure on housing demands which may outstrip supply. With these projections, Kenya’s real estate has been viewed as lucrative with promises of bigger and better returns in comparison to other ventures.

While this may have been true for a while, the glut in the market is now telling a different story altogether.

Kenyan towns with high growth potential

Since a majority of Kenyans want a piece of the cake, investment in the sector continues attracting all kinds of people promising to deliver what the investor wants.

But, is it always what it seems?

Practising valuer and author Kariuki Waweru says that due diligence is king when it comes to investing in real estate.

Kariuki advises that the best way to get into the market is to understand it fully before jumping in.

According to Hayer One Marketing, Nairobi is continually attracting more and more newcomers every year. This is due to its dynamism, quality of life, its privileged geographical situation and its unique charm.

“This is enough to boost prices but also to maximize the chances of making a successful investment.”

2018 projections showed that the areas with high real estate potential in Kenya outside Nairobi included Thindigua which is along Kiambu road, Kiambu, Kabete, Membley in Ruiru, Rongai, areas along Waiyaki road including Uthiru, Regen, Kinoo and Kikuyu.

According to the same projections, the most high potential satellite cities in Kenya include Athi River, Mlolongo, Mavoko, Nakuru, Ngong, Ruaka, Syokimau, Embakasi, Kahawa Wendani, Thika, Mtwapa,

Utange, Kitengela, Kiembeni, Nyeri, Likoni, Eldoret, Ruiru, Kilifi, Meru and Bungoma.

Kenya’s real estate bubble

A real estate bubble in Kenya is hard to notice since the market is not uniform.

“The bubble bursts in different places but the general picture is that in Kenya the bubble is not going burst. However, some sub-markets have already experienced the bubble burst and they are struggling,” Kariuki says.

Kariuki adds that Kenya’s real estate sector is highly segmented and that the sector is still far off from experiencing a burst.

“Some places like Kilimani and Kileleshwa have already experienced a bubble. There is a time when if you built apartments the rents were good and it was easy to sell them off-plan. People were making very good returns,” says Kariuki.

Kariuki states that a bubble bursts when one buys an overpriced property which they cannot later sell unless they have to dispose of it at a lower price.

The author, whose latest book is titled How to invest in real estate in Kenya. (Everything you need to know), says it answers most questions anyone interested in the real estate sector would ask.

He advises anyone thinking of investing in real estate should enlist a registered valuer to help with options on the best investment.

Kariuki has detailed most of his homeownership journey and answers most of the questions investors have on his blog.

“I was privileged to qualify for a mortgage to buy a plot and build my family home. I recorded the entire journey on my blog,” he says.

Kariuki says he practices what he preaches adding, “In the past 5 years, together with my chama, I have purchased several parcels of land in various parts of the country. I have practised the tips I have shared in this book and they work.”

He is currently pursuing global accreditation as a Chartered Surveyor with the Royal Institute of Chartered Surveyors, (RICS) (UK).

This, he says, will allow him to offer his real estate expertise in more than 53 countries around the world.