Nairobi News

LifeWhat's Hot

Shortcut to owning a home

Owning a home in Kenya is not for the faint-hearted. There are challenges that make prospective investors shy away, preferring the easier but — in the long run — more expensive rental houses.

Mr Charles Mwangi, a real estate consultant and CEO of Rubyland Limited, said many have been locked out of real estate investments because they were not patient enough to save for a house or land to develop.

“But there are a few determined Kenyans who have broken barriers and now boast of impressive investments,” said Mr Mwangi.

With a restrictive financial market, and limited resources, some are now looking for cheaper ways to own a starter home through chamas (group investments) and sacco savings.

It is an easier way of turning their dreams into reality, investment managers have said. 

Mr Harun Nyamboki of Moke Gardens helps such savers realise their dreams.

“Anyone who has an income and wishes to own a house can do it by starting small and growing one’s income. You need to understand your finances and then start saving a portion at a time,” said Mr Nyamboki.

“We accept a deposit and then work out a flexible payment plan that suits you,” he said.

Another real estate dealer, Mr Peter Muraya of Suraya Group, said most of his clients were young people determined to make their investment debut.

Any Kenyan who pays a rent of between Sh15, 000 and Sh20, 000 can afford to buy a house — a comfortable bedsitter to start with, said Mr Muraya.

Suraya Group is currently selling bedsitters on Mombasa Road for Sh900, 000 which Mr Muraya said were ideal for young families and fresh graduates who are just starting out in life. 

“The logic is that once you buy that bedsitter, say this year, its value will have tripled in the next three years. You can then sell the bedsitter and buy a one-bedroomed house which goes for about Sh2.5 million,” said Mr Muraya.

At the time of the first transaction, the young person will have a stable job and may have earned oneself a promotion, which would go with a two-bedroom house; going for between Sh4 million and Sh6 million. 

He advised those who have some idle cash to invest in property, be it a plot or a house instead of placing the money in saving accounts where the returns are minimal.

Bank deposits give a return of less than 10 per cent a year, but property value appreciates at between 30 to 40 per cent and sometimes even 100 per cent depending on the location.

“With the starter home idea, we are trying to teach people to start small,” said Mr Muraya.