There are a variety of Kenya real estate options to suit every type of buyer. These range from luxury beach houses that make great second homes or vacation rentals, to villas, townhomes, and apartments.
Kenya is a reasonably large economy, so in addition to Nairobi, there is a vibrant property market in Mombasa, Lamu, Malindi and Kisumu. Therefore, you are likely to be spoiled for choice when searching for Kenya property for your ideal home.
However, before you sign on the dotted line, think very carefully about the following tips.
1. Research the neighborhood
When you identify a piece of real estate in Kenya that you like, drive or walk around the neighborhood. Is it lush and are there unplanned structures like roadside kiosks?
Are the roads paved and how many alternative routes can you use to get to the city center? Does the neighborhood have a dynamic association that promotes the common interests of the community?
Is your dream home near a shopping center so you don’t have to drive all the way across town for your weekly groceries? If you have children going to school, how good are the schools in the area?
Is the house located near slums? The latter is an important consideration as it devalues your investment and can increase the incidence of crime. Although they are classed as posh suburbs, for example parts of the border slums of Lavington, Loresho and Runda, so steer clear of these.
It may be a good idea to drive around the neighborhood at unusual times, such as very early in the morning, after office hours, and late at night to check traffic flow and the general atmosphere in the neighborhood.
Some areas of the country are more prone to power and water outages than others. So go into one of the local shops and ask about these issues so that you can make an informed decision about real estate in Kenya.
2. Do your Due Diligence on the Identified Property
Once you’ve thoroughly researched the neighborhood, it’s time to research the property at both the Ministry of Lands and the appropriate city or municipal council.
Conducting a search at the Ministry of Lands helps you determine a couple of things…
First, the copy of the title will indicate whether the person intending to sell the property is actually the owner.
Secondly, it indicates the pending lease term if it is a property under a lease. It may not be wise to purchase a property with a remaining lease period of less than 20 years. However, if you are going to finance the purchase of the property with a mortgage, be aware that financial institutions will require a much longer outstanding lease period.
Third, any liens on the property will be noted on the title. If, for example, the owner has mortgaged the property, the mortgager’s interest will be noted on the title. As such, the property transaction cannot be finalized without the consent of this lender, so you should plan to obtain it.
A search of the town hall or town hall offices will help you find out if all the annual fees have been paid. If there are delays, the Ministry of Lands cannot effect the transfer of the property, as the city or municipal council will retain their important certificate of settlement.
3. Negotiate
Bargaining is another important tip to get value for money when buying real estate in Kenya. Buying a home is by all standards a great investment, so don’t be ashamed to haggle. Try cutting a million or half a million Kenyan shillings off the advertised price…
However, time is critical here, as it’s easier to get a discount on incomplete builds. The developers are willing to give considerable discounts when construction has just begun in exchange for a substantial down payment. Therefore, be prepared to pay substantially more than 10 percent of the purchase price that is normally required at the signing of the sales contract.
The amount of down payment you’ll ultimately be asked to make depends entirely on your negotiating skills, so hone this on time.
4. Identify a good lender
If you are going to finance your home purchase with a mortgage, you should research mortgage providers in Kenya to choose the one that best suits your needs.
Several banks, building societies, and mortgage companies offer 80 to 100 percent mortgages. These include Housing Finance, Kenya Commercial Bank, Barclays and Commercial Bank of Africa. In Kenya, mortgages generally attract variable rather than fixed interest rates, but read the fine print to ensure there are no hidden costs or oppressive clauses.
Obviously, before you take out a mortgage, make sure you can pay off both your existing and additional debt. This will warn you of that dreaded foreclosure risk in the future.
5. Hire a good lawyer
Lawyers play an irreplaceable role in concluding real estate transactions in Kenya, so you will need to hire one.
Like everywhere, Kenya has some wayward lawyers, so choose your lawyer very carefully. If you don’t know one, ask your family or real estate agent to recommend a reliable one.
As an added guarantee, don’t give your attorney power of attorney because this gives them a free license to do with the property as they please. Therefore, you could be cheated with your real estate investment in Kenya.
Instead, set aside some money to have all the documents that require your signature mailed to you. You will also need to mail them. This may cost you a few hundred dollars and delay the completion of the transaction by a few weeks, but it is worth it to protect your interests.
