How to Invest in Real estate in Kenya from Diaspora

Most Kenyans living in the diaspora spend most of their finances on the purchase of land. However, the question begs how does one invest in real estate from the diaspora?

According to a survey done by the Central Bank of Kenya in 2021, the remittance from the diaspora amounted to USD 3,718 million with most Kenyans working in the diaspora investing most of their finances in purchasing land and repaying mortgages.

The journey of investments from the diaspora will continue to increase at an accelerated pace owing to intergenerational wealth transfer. Such transfers will eventually appreciate the value of their nation of origin as those from the diaspora often tend to invest back home.

Real estate investments while in the diaspora when done right, offers vast lucrative opportunities. However, with the offshoots of fraud individuals, the majority of Kenyans in the diaspora are skeptical about investing in real estate.

So, let’s look into how to invest in real estate from the diaspora.

1. Have an investment strategy.

Although the potential of property investment is limitless it’s prudent to have a strategy in place as a potential real estate investor. The real estate market has various variables and factors to consider that need attentive evaluation. Not conducting appropriate research is risky. Also, conducting research helps you in developing your strategy.

A plan prevents you from making poor judgments and ultimately financial loss. Some things to consider as you plan are:

  • The type of property you desire to invest in. Are you planning on buying a townhouse, an apartment, or a commercial property?
  • The location of the property. Look out for the best location to invest in.
  • What is the purpose of your investment? Are you purchasing a house for rent or for you to live in? If it is for rent, you will need to consider hiring a real estate agent to manage it.
  • What offers better ROI, buying off-plan or a completed house.

Above is a house for sale in Santack estate along Ngong road. The asking price is Kes. 12.5M. View the house for sale

 2. Real estate agent

Although you may feel sufficient after well-done research to conduct the investment on your own, it’s vital to get a real estate agent. Having an agent furnishes you with information you wouldn’t readily find on the internet such as costings, the market type, and the ideal target market should you desire to buy property for rent among others.

The right real estate agent would have researched the local market and is licensed by the Kenyan government.

Additionally, having a credible agent would offer you peace of mind and help ease the process.

3. Mortgage

The decision of investing in property either through your finances or mortgage lies solely on your investment plan. According to The Central Bank, on average, the mortgage amount given is Kes. 8.6M, the interest rate charged is 10.9%, and the repayment period is 11.2 years.

Some of the institutions that offer diaspora mortgages are The National Bank of Kenya, Housing Finance company of Kenya, and NCBA bank among others. 

If you desire to get a mortgage in diaspora, the requirements vary depending on the institution of choice. However, some of the requirements that cut across are:

  • You must be a Kenyan citizen
  • Must be gainfully employed in your resident country
  • Have a KRA pin and produce a copy of your national ID
  • Demonstrate the ability to repay

  4. Hiring a lawyer

Once you have identified the ideal property you desire to invest in, hiring a lawyer is the next step. Real estate investment has various processes some of which require legal attention. Hiring a lawyer serves you with advice on the legal requirements required and helps you with the process.

Hiring a lawyer also offers a sense of security in your purchase journey.

Conclusion

How to invest in real estate from the diaspora is easy if you know the steps to consider before embarking on the journey.

Remember, real estate investments have risk factors, so it’s important to do prior research and keep learning.

Also, before spending a shilling on the property, ensure you contact a licensed realtor to help you. Remember the location of the property is everything, therefore, investigate factors that make a place a prime location before investing in property within the locality.

As an investor, to avoid complications in the process, focus on a particular area of property investment and build an investment strategy. Ensure to keep consulting even as you do your research as it offers a safety net as you embark on the journey.

We know that the processes of investing in real estate from the diaspora may seem tedious as of now, however, in the future, there will be applications developed that allow one to invest in real estate with just a tap from the phone regardless of where you are. This is a similar way to Mpesa and how it made banking easy. Therefore, those in IT could bank on this opportunity by creating applications that make property acquisition easy by reduction of the processes involved. Happy investing!

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