Real estate is among the top contributing source of revenue for high-income earners and the government. Besides, it is among the industries working excellently to bridge the youth’s unemployment gaps. Noting this, Kenyans have decided not to be left behind, venture into it, and benefit from its merits. It has taken a quick turnout, and within a short time, there has been a constant change, reformation, and molding of Kenya’s economy. However, to continue seeing these benefits, note that several factors influence its operations. The factors have both positive and negative effects. Keep reading to understand this! 1.Demographics/ Population Demographics are very significant when it comes to real estate investment in Kenya. Often, it is overlooked, and many people do not understand its effect on real estate properties. It is the composition and distribution of people in a given area regarding age, population growth, and gender, income, and migration patterns. You will not build a 10 M mansion in an area encompassed by people earning 30 K or less per month. Similarly, singles and bedsitters will not be the best fit for a large family. That shows why a real estate investor has to narrow down to the desired property…

For decades, investing in land in Kenya’s capital, Nairobi was a sure bet and a safe haven in a market where prices doubled every two years driven by speculation, a bulging middle class and a club of high-net-worth earners chasing after assured returns at low-risk. But a Business Daily analysis of data covering the past five years challenges this trend, showing that at least seven of the high-end suburbs in Nairobi have lost value by up to 11 percent between 2018 and 2022, reflecting the stagnating demand for Grade A office space and high-end residential apartments as a result of oversupply. Historical land prices data provided by realtor HassConsultshows that land prices in Upper Hill, Kilimani, Parklands, Lavington and Gigiri declined by 11 percent, five percent, four percent and three percent respectively between 2018 and 2022. This means that an acre of land in these suburbs is cheaper today than it was five years ago, leaving investors who wanted to sell today scratching their heads, in a major market upset seen by some analysts as a ‘price correction’. Hass Consult says that Upper Hill was experiencing an oversupply of commercial office space that had seen developers adopt a “wait-and-see” attitude…

Pension scheme Laptrust has locked out retail investors from its newly created real estate investment trust by setting a minimum investment of Sh5 million for each party that may want to buy into the property fund in the future. Laptrust has received the Capital Markets Authority (CMA) approval to package its real estate assets into a fund called Laptrust Imara I-Reit and which will be listed on the Nairobi Securities Exchange. The properties that will be held under Imara include CPF Metro Park, CPF House, Pension Towers, Freedom Heights Mall and Service Plot, Man Apartment and Nova Eldoret. “The Laptrust Imara I-Reit will be listed as a close-ended fund at Sh20 per unit (share) based on the net asset value of the scheme as at the time of listing, with a total of 346,231,413 units,” the regulator said in a statement. “The valuation of the I-Reit, at the listing, will thus be Sh6.9 billion. The units may only be transferred to persons who qualify as professional investors and at a minimum trade size of Sh5 million.” A closed-end fund’s shares are traded on the exchange but no new units will be created and no new money will flow into the…

Passive income is money that you earn without a regular daily time investment. Creating a passive income stream from rental income involves work upfront but allows you to reap financial rewards for years to come. One common passive income stream is real estate investing and rental management. Step 1: Research, Research, Research Before you even think about buying a rental property, you’ll need to do a substantial amount of research in your local area. First, take a look at what rental units are currently available in your area using a real estate database. This will give you a good idea of how much you can reasonably expect to charge in rent. Keep in mind that property amenities, location and size will also influence how much rent you can charge. You’ll also need to spend time learning about the laws you need to follow as a landlord. Some examples of law classifications you’ll need to study include: Laws governing the landlord-tenant relationship Laws against housing discrimination Laws regarding the eviction process Step 2: Select A Property and Do the Math After you’ve done your research on your local real estate market and housing laws, it’s time to choose a property. Select…

President William Ruto has announced plans to exempt first-time home buyers from paying stamp duty to all in a bid to ease house ownership costs among workers battling the rising cost of living amid largely stagnant pay. Dr Ruto said his administration would seek to strike a revenue balance by removing stamp duty for first-time homeowners and raising compliance for other property-related levies like land rates and rent. Currently, the exemption from stamp duty applies to first-time homebuyers of approved affordable housing units following changes to the law made by the previous administration. “We have said as a government that if you are buying a house for the first time, we can’t tax you. We’ll remove stamp duty. But when we remove stamp duty [for the first-time homebuyers], you should pay land rates because if you don’t where will we get funds for water supply, road construction, electricity connection and garbage collection?” posed Dr Ruto. The stamp duty is charged on the market value of the property at the rate of four percent in towns and two per cent in rural areas, and should be paid to the taxman within 30 days of contract execution to avoid penalties.

If you own a home that you no longer want to live in, you have a choice: sell or rent it out. To decide on the right path for you, you’ll want to consider the housing market as well as your appetite for becoming a landlord—a job that comes with many responsibilities. Renting your house: Pros and cons There are several advantages and disadvantages when you make the decision to rent. The most important thing is to be sure you’re up for the commitment. Pros 1. Safer for a buyer’s market. Selling in a buyer’s market puts you at a disadvantage. High supply and low demand typically drive down prices, meaning you may lose money on the sale. If you’re facing a buyer’s market, renting is a way to earn income while you wait for the market to improve. 2. Passive income. If you can command rent that surpasses your monthly mortgage bill, you’ll have a steady stream of passive income. 3. Continue building equity. If you’ve only owned the house for a short period of time, renting will allow you to hold onto your home and build more equity, especially if property values in your area increase significantly. If…

The following are some of the traits of good investments. An investment does not need to have all these traits, but there should be an acceptable reason for the absence of any one of them. For example, an investment does not need to provide income, if it is expected to grow in value. If it does neither, there is no point owning it. 1. Fairly valued If you overpay for an investment, you are putting yourself at a disadvantage. Good investments are usually bought at a good price. With equity investing, valuation relative to future growth is key. Market timing may have its limits, but stock valuation plays a big part in determining future returns. Buying at a fair price is not necessarily the same as value investing, but the price should always be reasonable and based on reasonable growth assumptions. The same applies to other asset classes too. Real estate investments should be based on yield and not just on the assumption that the price will increase. Cyclical assets like commodities should be purchased after a down cycle when fundamentals begin to improve. 2. Underlying value will increase over time The best investments are more often than not assets…