Everything you need to know about Real Estate in Kenya

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As the nation has continued to develop, most investors and individuals have focused more on real estate and all its facets. Real estate investment in Kenya has been a lucrative opportunity known for its reputation for bringing in great returns on investment.

A report by Hass Consult Index shows the performance of land against other assets where if one invested Ksh 1 million in 2007, in 2022 that would be Ksh 10.47 million if invested in Nairobi’s satellite areas, Ksh 6.39 million if invested in the suburbs and Ksh 3.39 million if invested in bonds.

However, the secret to generating returns on investment is knowing the fundamentals of real estate. This knowledge acts as a pillar to enable you to invest wisely in the industry. 

That is why in this article, we have compiled a guide that explains the real estate process to customers and how agents can better market their properties.

If you want to read on more detailed topics, feel free to look into our topic clusters. Otherwise, buckle up as we go through everything you need to know about real estate in Kenya.

What is Real Estate?

Real estate refers to land and any other permanent buildings on it such as a home or any development whether man-made or natural attached to the land including natural resources like crops, water, and minerals.

The term “real” refers to physical property while “estate” connotes the interest a person has in the particular property. In business, we refer to real estate as the act of producing, buying and selling property.  

Real estate is distinct from personal property. Personal property refers to items not attached to the land such as vehicles, jewelry, farm equipment, or furniture.

Having known what real estate connotes, let’s now look at important facts about investing in real estate.

Important Facts About Investing in Real Estate

Real estate offers good retirement investment – Investing in real estate offers a secure and safe retirement plan. It offers a steady and secure income when you retire and even during your peak years.

Acts as a buffer against inflation – as the inflation rises so does property value and rent. Therefore, you can bank on remaining profitable even during inflation.

It has tax benefits attached to it – When you invest in real estate, you qualify for incentives such as tax deductions from mortgage and insurance expenses. Also, when you sell an investment property, the profits gained from the sale are taxed as capital gains which is a lower tax amount in comparison to ordinary income tax.

It builds wealth – Investing in real estate is one of the sure ways to increase your net worth. Noteworthy is that this is not a get-rich-quick scheme as it takes patience and hard work to build.

It has low barriers of entry – the barriers to investing in real estate aren’t as huge as would be perceived. To invest in real estate, you don’t need a huge sum of money especially now with Real Estate Investment Trust (REITs) where you can own part of a high-quality real estate such as an office block, high-rise apartments, shopping malls, hotels and warehouses without paying the high acquisition costs. 

In real estate, location is everything – Location is one of the major things to consider when purchasing a house; it’s the one thing you cannot change. You are more likely to make money from the wrong property in the right location.

Why Invest in Real Estate in Kenya

  • Strong economy 

Although smaller in population than Tanzania (54 million vs. 58 million) and only slightly more populous than Uganda (44 million), Kenya’s geographical location makes it central to East Africa. Besides, Kenya is the wealthiest of the three.

​​According to the World Bank, GDP per person in 2021 was USD 2021 in Kenya, USD 1099 in Tanzania, and USD 883 in Uganda. Rwanda, a darling of the western press, was at $822.

These higher GDP figures are not a daydream. Kenya is the regional production center. Unlike in most African countries, many foods in supermarkets are locally produced. This has attracted many foreign investors into the land.

  • Investor’s confidence

Compared to other jurisdictions, Kenya’s real estate market has the potential for higher returns. Foreign investors can also enter Kenya’s real estate market relatively quickly. Foreigners are welcome to purchase commercial class land and property in Kenya.

According to Jones Lang Lassale Kenya Ltd, the country has shown impressive improvements in transparency, largely due to increased regulation of the real estate market as Kenya aspires to become an economic hub for East Africa. Private companies and other international consultants are increasingly providing consistent data for the Kenyan real estate market.

  • Introduction of REITs

The Real Estate Investment Trust (REIT) structure and corporate tax exemption were introduced in 2013, and the country’s listed real estate market has grown significantly in recent years.

International investors, mainly from South Africa, have flocked to Kenya’s real estate market since the introduction of REITs.

  • A favorable business environment and a diligent workforce

A favorable business environment and a diligent workforce are attracting foreign and domestic investors to invest in property development in internationally renowned holiday destinations such as the Masai Mara National Reserve, Naivasha, Nanyuki, the Coast, and Nairobi. This is the essence of real estate tourism.

  • Currency

The Kenyan shilling is one of the most stable currencies in Africa, making it a popular destination for real estate investment as assets remain relatively stable in terms of US dollar value.

  • Rental Yields

The property market in Kenya is primarily a rental market. The residential sector is currently experiencing the greatest demand due to a rapidly growing population and a growing middle class. Rental yields can go upto 6% to 8%.

Several developments are characterized by a wealth of conveniences with features such as fully equipped modern gyms, steam room and sauna, solar-heated swimming pool, and concierge service. Some developments also add AirBnB property listing and management as an added service.

The combination of long-term and short-term rentals increases the monthly income. In addition, if demand for purchasing a unit falls, it can easily be converted into furnished or unfurnished apartment. 

Types of Real Estate in Kenya

  1. Residential Property

Residential properties are structures designed specifically for the dwelling or living of individuals. Payment is made for the individuals to live in the building. It includes townhouses, multi-unit apartment buildings, maisonettes, luxury villas, and stand-alone semi-detached houses. It also includes vacation houses where tourists can stay such as hotels, lodging, etc.

Residential properties fall within three major categories:

A – Luxury residential properties

B – Middle-income residential properties

C – Low-income residential properties

  1. Commercial property

In Kenya, commercial property is land intended to generate profit or structures that are used for business activities coupled with larger residential properties that are used for trade.

It includes properties like skyscrapers or office buildings which are leased out for a rental price to business owners or commercial businesses for use.

  1. Industrial property

These are properties used for business purposes such as commercial establishments, factories, public utilities, manufacturing plants, and warehouses.

  1. Retail property

The retail property includes structures such as shopping malls and retail storefronts. The landlord in some cases imposes a base rent to the tenant to encourage them to keep the property in top-notch shape. Also, the landlord may sometimes receive a percentage of the sales the tenant has generated.

  1. Mixed-use property

This is a type of urban development that incorporates the above property investments all in one space. They are used to monitor risk as they have a unit of diversification.

  1. Land

It includes farms, vacant land; undeveloped land, or land on which properties are being constructed.

It’s important to know the types of real estate as the purchase and sale of different properties are based on their type. Also, processes such as construction, zoning, and an appraisal are handled differently in each real estate type.

Because each of these processes has its unique process of acquisition, let’s then look at some of the types of residential houses.

Types of Houses

  1. Apartments

Commonly referred to as “flats” apartments are a set of rooms that make up a dwelling, typically in a building that contains several of them. Apartments typically have one to four bedrooms with a suite of rooms ranging in area from 150 to 300 square meters. They can be serviced making them popular with students, diplomats, and ex-pats.

The appeal lies in the location, size, style, amenities, number of units in the complex, and price. Prominent features include swimming pools, gymnasiums, ponds, clubhouses, etc. They are mostly occupied by those in the middle and upper-income bracket.

  1. Townhouses

Townhouses in Kenya are usually located in a gated community. They often have two or three floors and occupy an area of ​​around 250 to 400 square meters. As with apartments, facilities and common areas are shared, however, townhouses have more exclusive features and operating codes that make them appear more like private members’ clubs.

They boast a variety of salient features such as landscaped gardens, swimming pools, clubhouses, basketball courts, tennis courts, on-site fitness centers, etc. Private companies provide 24-hour security.

  1. Mansionnetes

A mansionette is a derivative of a mansion (a large, impressive house). It is a small house, usually attached to another, usually on two floors, with its entrance from the outside, a front yard used as parking for one person, and a back yard.

Most maisonettes have three to four bedrooms with DSQ and occupy an area of ​​around 100 to 200 square meters. Until recently, this was the most common house type in the urban areas, e.g. B. Donholm, Buruburu, South B, South C, etc.

However, due to the scarcity of land in the city and other urban centers, these types of developments have been shifted to satellite areas around urban centers, e.g. B. Kitengela, Mlolongo, Athi River, etc. Prices of land in Nairobi satellite areas are much lower than in the suburbs.

In Kenya, maisonettes appeal to small young families because of their price and function.

  1. Luxury Villas

By definition, a villa is a large and luxurious country residence. In Kenya, they are located in quiet suburbs and usually have four or more bedrooms with ensuite bathrooms.

They are spacious and there is no shortage of luxury: wooden floors, Venetian finishes, state-of-art kitchen, a beautiful backyard or a front yard, spacious balcony and terrace, swimming pool, clubhouse, tennis court, badminton court, garden area, gym, and children’s park.

They are designed for the highest end of the luxury market.

Real Estate Investment Strategy

 In real estate, it’s vital to have the right investment strategy. As an investor, you need to select a strategy that best suits your personal goals both long-term and short-term, your budget, and your skills.

Here are some investment options to consider:

  • For rental properties

Investing in rental properties involves buying property for sale. You can purchase the property for sale both on an off-plan or a completed house. Revamping the house to make it attractive to potential tenants and renting it out.

For a first-time investor, pay more attention to the yield than the capital gains. To calculate the yield, (Gross yield = annual rental income/property value x 100.)

There are 4 investment strategies to consider:

  • Airbnb rental property

The demand for short-term rentals apart from hotels has spiked up in recent years. According to Airbnb statistics in 2018, Kenya had more than 6,500 houses listed. Airbnb offers lucrative opportunities you can bank on as you can rent the house from one night to 30 days.

When purchasing real estate for the purposes of doing an AirBnB business, consider focusing on the areas with the highest demand as shown on the map below.

The average daily rate spent on AirBnB from February 2023 to March 2023 in Nairobi was $49.

  • Traditional rental property

It involves buying property to rent for between 3 months – one year or more.

  • Buy and hold real estate

If you’re looking for a long-term and active real estate strategy, buy and hold is for you. This investment strategy involves purchasing property and holding it for a period. The reason for holding is to wait for the property to appreciate and sell it at a higher value. The majority of investors combine this strategy with rental properties to benefit from the rental income.

  • Fix and Flip real estate

 With this form of investment strategy, you purchase a house under the market value, renovate it and sell it when it’s opportune to make a profit. To ensure you don’t lose money on a fix and flip real estate, ensure to consult an inspector, contractor, and appraiser.

One of such properties in our portfolio is Santack estate near Kilimani along Ngong road where an old bungalow can be purchased for Ksh 12.5M. According to Hass Consult Index 2022, the average value of an acre of land in Kilimani is Ksh 399,700,000.

  • Real Estate Investment Trust (REIT)

This is a passive real estate income strategy. Investing in REITs is similar to how one would invest in stocks and shares. Investors consolidate their finances to purchase real estate such as apartment complexes, healthcare facilities, and hotels. The investors will then receive a portion of their profits generated as dividends.

Considering the different real estate investment options, it’s also vital to consider the qualifications of a real estate agent.

 Qualifications of a real estate agent

  1. Must have a valid real estate certificate. Some of the essential elements that influence whether a person will be certified or not are:
  • You must be above the age of 18 years.
  • If you’re a non-citizen, you need a lawyer who will represent you.
  1. You need to register with the Kenya lands registry.
  2. Proof of property purchase – you need to prove that you have properties available for sale.
  3. Proof of finances to invest in real estate – need to show proof of finances to pay for the license, marketing among others.

Real Estate Processes

Real estate involves a lot of processes. Depending on the type of real estate you desire, the process of acquisition differs. However, for the most part, the processes are the same.

For this article, we’ll look at the processes of acquiring a residential property. Commercial and industrial real estate follows the same processes to a degree, but residential processes are most relatable to most customers.

We’ll look at the real estate process from a buyer’s and seller’s point of view.

Real estate process from a seller’s perspective

The following processes are involved:

  1. Hiring the right agent 

When a homeowner decides to sell their home. What he or she may decide to do is hire a real estate agent to assist in the selling of the property that is if unless they decide to sell the property themselves.

Having the right real estate agent partner is crucial for the success of the sale of the property. It also saves you time and energy you would have spent in selling and furnishes you with information on the market you wouldn’t readily find on the internet.

Historically, individuals would find a real estate agent through personal recommendations from friends, relatives, etc. However, times have advanced with potential sellers finding real estate agents not only through personal recommendations but also through online platforms like social media or Google.

Before hiring an agent to assist you to sell your property, ensure you:

  • Search for different real estate agents online or through personal recommendations.
  • Spend time interviewing the agents you desire to work with. Check how long they have been in the field. What is their level of success?  What marketing strategies have they employed? Investigate how long it takes for them to sell a house in different locations.
  • Based on the feedback given from the interviews, choose the real estate agent that best suits your preferences.
  1. List the property

After getting the right agent, the next thing as a seller is to list the property. Property listing is setting your property on the market so that potential buyers can see it. This should be done by your agent however, you may also check our site regularly as we get requests from clients looking for specific types of real estate and your house could meet the requirements. In such instances, you won’t need an agent.

The process of listing your property involves:

  • Setting the price
  • Placing your property on the agent’s online listings
  • Marketing the property
  1. Setting the price

The majority of us believe that setting a price for your home is just coming up with a figure in your mind and running with it.

However, for your house to sell well, the price of the house needs to be evaluated by a professional so that it can be priced according to the current market value.

Although you can set your house to sell at any price. It’s important to understand the dynamics of the market so that you don’t oversell or undersell the home.

We rely on research about land prices in Nairobi suburbs and satellite areas to make it easier for you to determine the market price.

  1. Placing your property on the agent’s website

This is a platform that your real estate agent has access to. It shows real estate listings from all over the country.

Placing the house on the website allows potential buyers to view your house’s features and its amenities and provides the buyer with images of the different rooms in the house.

  1. Marketing the property

Marketing the house increases the property’s exposure to potential buyers.

Some of the marketing techniques you can employ include scheduling showings with the buyers. With technology advancement, you can now offer virtual or 3D experience of your home through Digicurated.

Showings give the buyer first-hand experience of the house. These in-person/virtual meetings or a combination of both allows the buyer to express their concerns about the house, ask questions and give you as a seller platform to sell your property in a way that would be more desirable to the buyer. 

As part of your marketing process, you may consider creating videos on the property and other features attached to the property such as its surrounding amenities and location to attract potential buyers more.

In addition, consider virtual staging as a marketing tool to implement. Virtual staging is where a potential buyer gets to view the house without necessarily going to view it physically.

Apart from virtual staging ensure you also do physical staging. Staging is where you focus on the home looking more appealing to the buyer.

When the buyer comes to view the house, they are not only buying the house, but also the experience from the showing. Therefore, it’s important to give them a worthwhile experience. 

Staging involves cleaning the floors, removing personal images from the house, adding more space by properly arranging the furniture, etc. 

When buyers come for house showings, they imagine the house as their own and how they would fit into the space. Staging helps with giving them this experience which would ultimately help you land the sale.

  1. Make the necessary replacements and repairs

Unless you intend on the buyer making the house repairs by themselves at a reduced cost, ensure to swipe the house with your agent and check if there are any repairs your house would need before placing it for sale. 

Check for broken pipes, chipped wood, taps or cabinets that are broken, etc. Be very detailed and give your house a good polish to get the value of the house back.

You don’t have to fix everything, but don’t leave any loose ends. Repairing damaged parts gives your house an elegant and attractive look and helps you land a potential buyer quickly.

  1. Fill out a seller disclosure

This is a document that explains how old the house is, the materials used, and any problem you encountered while living in the house like leakages, water shortages, etc. This will help your agent access your house and know how best to sell your house. Ensure you’re honest.

  1. Give a purchase offer and negotiate

If you placed competitive prices on your house, multiple buyers would be attracted to it. If you get offers lower than your asking price, don’t hesitate to negotiate by making a counteroffer, reducing the price, or asking for the full price.

When buyers are negotiating the price, they at first do so testing the waters to see the reaction of the seller.

Be sure to work with one offer at a time and compare the different offers from buyers to get a feel of how much the buyers are willing to pay for your house and if need be, adjust the price accordingly.

  1. Home appraisal and inspection

Once a buyer has developed an interest in your property, they may have your house inspected for any damages and appraised by the lender to check if the house was valued correctly.

This is a crucial stage for the buyer. Should they find the house with major parts that need repairing, be sure to disclose information on the repairs you intend on making that come with the sale and repair parts pointed out by the buyer.

Also, when the house is valued and the lender advises the buyer that the house was overpriced, the buyer can use this as a negotiation tool to bring the price downwards. Be sure to be flexible.

With these tips, you are guaranteed a successful sale of the house. Now let’s look at the real estate process from a buyer’s perspective.

How to sell an old house

The process of selling your old house is no different than selling a newly constructed house or one that hasn’t aged. However, here are some additional tips to consider:

  1. Prove its maintenance

You need to prove to prospective buyers that despite the house being old, you’ve kept up with maintenance and that all systems in the house are still functioning well. You could hire a home inspector to come to view your house and advise of any changes you should make before listing the house.

Here are some things to consider when looking at maintenance

  • State of the house’s foundation
  • The roof. Do they need a replacement? Are there any leakages?
  • The plumbing. How is the water pressure around the home? Copper piping is more durable compared to lead pipes. Check if there are any repairs and take care of them.
  • How is the wiring within the house? Can it handle modern appliances?
  1. Market the house’s unique feature
  2. Update your internal decor to match the current housing trends
  3. Ensure you do staging while marketing your house

How to know if the property is over-priced

  • ​​Conduct market research or enlist our research services.
  • Find out how comparable houses within your location have sold out for
  • Keep an eye on the market trends as they affect the house pricing.
  • Get your house valued by a financial institution and also a professional real estate company.

4 Things that make a property more desirable to investors

  1. The location of the property 

Location is the most important factor that investors look out for before purchasing a real estate property. 

Some things to look out for before determining a good location are:

Neighborhood – the type of neighborhood determines the type of tenants and investors it will attract. For example, a neighborhood in Karen or Runda will more likely attract high-end investors and tenants compared to other locations that are densely populated and as a result noisier.

Schools – are there good schools within the location?

Amenities– What are the present amenities available? Shopping malls, coffee shops, green spaces are usually top on the list for buyers.

Taxes – depending on the location, different properties attract different types of taxes. For example, stamp duty imposed is 2% in rural areas while in urban areas it’s 4% of the value of the property. 

  1. Growth potential and cash flow

When investing in rental property, cash flow is one of the most important factors to consider. 

Consider the amount of cash flow that the property attracts. Also, if the property is located in an area that has growth potential, it attracts investors as rental income increases commensurate to the growth of a location.

  1. Condition of the property and management

The condition of a property can either benefit or sabotage your investment choice. Consider revamping a property that is old and place a good property manager to ensure you don’t lose on your returns.

  1. Market trends

Market trends can affect the future of the property. Therefore, evaluate the market trends such as future developments, job market, and average rent. All these factors determine if the property is a worthwhile investment.

Developments such as the construction of a superhighway or solar power plant near a property will affect the market trends of a location significantly.

Real estate process from a buyer’s perspective

When buying property in Kenya the proper process should be followed. Most people enter transactions with strangers and end up losing huge amounts of money to scammers who are usually very clever.

It is recommended that you hire the right people including property researchers or real estate agents, lawyers, appraisers, or any other party you trust to give you more confidence in going ahead with the transaction.

It’s common sense to know your budget as you start the process. The various financing options can be through cash deposits, cash proceeds from the sale of other assets, mortgage financing, and Sacco loans, among others. With any form of financing, one should first determine how much they qualify by contacting the appropriate loan officer for a pre-qualification, so you know what your budget is. Below is the process one should follow to ensure that full due diligence is performed to avoid regret.

  1. Identify the property of choice.

The first step is to find the property (land, house, etc.) that interests you. Many times people outside the country may not be able to rely on their family or relatives to conduct a proper search for a house.

For instance, if you’re looking to purchase a house that you can use for AirBnB, it is advisable to hire a researcher to help you identify the best locations based on statistics. 

This is one of our key services where we create a professional report with the options of the properties to look into. We will then offer you a virtual visit of the property which shows the floor plan which allows you to measure the rooms and see finer details.

It also pins the exact location of the property. Later on you can conduct a site visit to ensure the property meets your specific requirements.

  1. Search

The buyer should obtain a copy of the property title and a copy of the seller’s ID from the seller. The copy of the title is used to conduct a search of the property at the Land Registry, while the copy of the national ID card is used to verify the seller’s identity at the Office of Registration of Persons. 

Currently, there are no fees for searching. In case you’re buying a parcel of land in Nairobi, you will need to register on Ardhisasa and select the search icon then follow the steps provided.

The research results are usually ready for collection 2-3 days after the application has been submitted to the land registry and contain such information as:

  1. The registered owner of the property
  2. The size of the property
  3. Any encumbrances entered on the title, such as unpaid taxes, court orders, prohibitions, caveats, and warnings
  1. Negotiation and Contract of Sale

The buyer, either himself or with the assistance of his attorney, should engage the seller or their real estate agent for discussing and agreeing on the terms of sale which constitute the contract of sale.

When you enlist research services through our company, our partner lawyer will be available to assist you with the process.

It is common for the buyer to pay a 10% deposit and then pay the balance of the purchase price after the sale is complete.

The balance can be paid back in the form of a mortgage taken out by the buyer to complete the transaction. Both the buyer and the seller must sign the contract of sale. At this stage, the buyer pays the deposit.

  1. Transfer and Closing

A transfer represents a formal handover of property title from the seller to the buyer signed by both parties. 

  1. Stamping and Registration Formalities

The next stage in the sales process is the payment of transfer stamp duty and registration fees. To determine the amount of tax to be paid, the seller’s attorneys must apply for a valuation of the property at the land registry.

The appraisal is carried out by state appraisers who are obliged to determine the market value of the property.

The stamp duty paid is between 2% for properties in the rural areas and 4% for properties in the cities of the value of the property. Stamp duty is collected by the Kenya Revenue Agency and should be remitted to the Commissioner of Domestic Taxes through various banks that have been appointed as collection agencies.

Once the buyer has paid stamp duty on the transfer documents, the documents are deposited with the land registry for stamping with the tax.

This is the process of paying stamp duty:

Login to iTax >> Payments >> Payment Registration >> Tax head (Agency Revenue), Subhead (Stamp Duty) >> click payment type (self–assessment) >>click on payment registration>> fill in bill reference number>> Nature of instrument>>details of the transfer (PIN) >> details of the buyer (PIN) >>details of stamp duty >>Rate of instrument >>total amount to be paid >> Mode of payment >> Submit

The final step is for the transfer documents and all related documents i.e., the original titles, ground annuity, and waiver certificate, consent to transfer, duly completed stamp duty assessment form, and stamp duty return, assessment, and deposit receipt to be posted for registration.

  1. Registration

The very last step in the sales process is the registration of the transfer in favor of the buyer. When a properly registered transfer has been released to the buyer it is important to conduct a further search of the property just to ensure proper registration has taken place. 

If the purchase price should be provided by a bank or other financier, the duly registered documents will be charged to the financier to settle the balance of the purchase price.

The documents are then kept by the financier until the buyer has paid the entire loan amount.

How long is the process of acquiring real estate in Kenya

A land transfer process currently may take up to Four (4) to six (6) months due to the delays at the Registry. However, there is currently a digitization process that is taking place that may make the process shorter.

Factors to consider when selecting a residential house

  • Location of the house
  • Neighborhood
  • Surrounding amenities
  • Home size and usable space
  • The condition and age of the house
  • Upgrades in the house
  • Local market
  • Economic indicators

Valuation of property

Property valuation is the ability to estimate the fair price at which a property or asset would be traded in an open market, or rather the process of measuring the value of a property or land or other assets for a specific purpose such as e.g. rental, purchase, sale, audit opinion, or taxation.

In Kenya, the board responsible for property valuation is Valuers Registration Board. The board sets regulations that determine how property is to be valued.

It is important to note that the person you hire to conduct assessment services must have passed mandatory and dynamic educational, training and competency tests.

He/she must demonstrate and uphold a code of high ethical conduct and professional practice.

Importance of Valuation of property

  • Due to its legal nature, a real estate appraisal allows for a high degree of convenience. In this case, both property buyers and sellers definitely need an appraiser to guide them on pricing in the transaction process. 
  • Helps in determining the value of your property as per the current market. 
  • Valuating your property acts as a guide to your selling, buying, and investment decisions.
  • It helps you conduct an accurate property assessment.
  • It provides clarity and prevents unrealistic expectations of the property. 
  • Property valuation acts as a legally binding document that can be used in negotiations in case a dispute arises with buyers.
  • It is used by lenders to determine mortgage.
  • It prevents financial shocks.

Housing Finance

Housing finance is the process of providing finances to individuals for construction, purchasing a residential house/ land/ an apartment, and making improvements to the house. 

Some of the housing finance options include personal savings, bank loans, and Sacco loans. The most common mode is personal savings.

Constraints to conventional housing finance

According to Kenya Bankers Association, mortgages are the least favorable mode of housing finance taking up a market share of only 6%.

The reason why the uptake of mortgages is low is:

  • Mortgages in Kenya are associated with high-interest rates. As of 2020, the average interest rate of a mortgage was 12%.
  • High initial deposit requirements.
  • The lack of long tenors makes the mortgage terms unfavorable to the majority of the stakeholders.
  • Strict processes for the mortgage approval by banks especially when they are lending to those in the informal sector.
  • High prices in property
  • Low mortgage amount
  • As a result of limited access to capital markets and the low supply of long-term capital, financial institutions hesitate in expanding their mortgage portfolios.

Mortgage Insurance

This is a policy that protects the lender or beneficiary if the borrower defaults on payments, dies, or is otherwise unable to meet the contractual obligations under the mortgage.

There are three common types of mortgage insurance: insurance against fire and perils, mortgage protection, and retrenchment insurance cover.

Mortgage protection insurance covers permanent disability and death. That is, in the event a person dies without having completed their mortgage, the insurance company is obligated to pay the remaining amount and pass the title deed to the Next of Kin.

Fire and perils insurance covers the building against uncertainties such as an earthquake, fire, flooding, etc.

The retrenchment insurance cover ensures that the insurance company continues servicing the mortgage for a period of up to 6 months after the person has lost their work. 

Tips to Purchase Home Insurance

Home insurance is a cover for your belongings and house against life’s unexpected events. The insurance covers you against fire, damages caused by adverse weather conditions, and theft among others.

It’s divided into two categories: Insurance for your house and insurance for the contents in the house. Both insurance covers can be taken separately or combined.

Some of the tips for purchasing home insurance include:

i) Research some of the insurance companies available in Kenya that offer home insurance, their rates, and compare notes. You should look into 5-6 insurance companies before making a decision.

If possible, have a lawyer go through the fine print to make sure that what you’re getting is exactly what the insurance agent is selling.

ii) Deciding which type of home insurance works best for you. The type of insurance you get would majorly be influenced by the party taking. As a tenant, it’s wise to take home insurance for the contents within the house, and as the owner, insurance for your house.

In the event that an Insurance company fails to honour their part of the deal or misrepresents information to get you to purchase a product, you can file a complaint with the Insurance Regulatory Authority of Kenya.

Also, consider whether you want to over-insure or under-insure.

Over insurance is where you take an insurance package higher than the amount required to rebuild the house while Underinsurance is where you take a package lower than the amount required to rebuild the house.

When deciding the type of insurance you prefer, location is a major factor in determining the premium your insurance agent would grant you. The reason is that your location determines the perils your home is more prone to as a policyholder.

The following are factors the insurance takes into consideration: the crime rates, the distance of your home to the nearest police station, and fire hydrants. Potential risk from weather conditions such as earthquakes, floods, and landslides.

iii) Choose a reputable insurance company, its location is easily accessible to you, has good financial ratings, and is customer oriented – how fast they reply to the customer’s needs.

iv) Make the most of the discounts offered – most insurance companies in Kenya offer discounts for behavior that altogether diminishes the dangers, so it is prudent you make great use of them. From installing burglar alarms, to smoke detectors, and water safety systems.

You will be able to spare a noteworthy sum on your insurance premium. Besides, if you effectively keep up your credit score, you’ll impressively progress your chances of procuring better rates.

v) Be familiar with the costs – ensure you don’t insure your house for its current market value but for its replacement cost.

vi) Be honest with the questions asked to get the best out of the insurance company.

Gated Communities

Gated community
Gated community by N Chadwick is licensed under CC-BY-SA 2.0

A gated community is a form of residential housing estate containing entirely controlled passages for people on foot, bikes, and automobiles, and is frequently characterized by a closed edge of dividers and fences.

The gated community in most cases comes with a set of rules, which the inhabitants and guests must follow.

Some of the benefits of a gated community are:

  • Sense of security 

Considering that the developments in and out of the gated community are closely observed there radiates a sense of security among the residents. 

Most of the gated communities have cameras and a control center where those capable of security do their observing. With such, it is conceivable to identify any security risk and act appropriately. Be that as it may, it isn’t all gated communities that have cameras.

Security also enhances crime reduction  – One of the ways in which crime is reduced in gated communities is that inhabitants are guardians of each other. In truth, people living in gated communities are often close to each other as the relationships forged are more family based. With such associations, it is simple for inhabitants to warn security of their neighbors should an instance of crime occur or threaten to take place.

  • Privacy 

Gated communities are characterized by having borders within the perimeter walls and close monitoring of the entrances by security personnel. This gives a sense of privacy to anyone entering the premise. 

  • Community groups

Another advantage of living in a gated community is having community groups that foster relationships, and access to convenient amenities like shops, pools, gyms, schools, etc. 

Additionally, those living in gated communities get to enjoy organized garbage collection and cleaning services – roads, gardening, cars, etc.

Some communities such as Santack Estate have registered association groups that address all matters of importance to the residents.

Some of the drawbacks include:

  • Expensive houses 

Bearing in mind that those gated communities come with extra benefits as compared to other regular residential properties, the sum of cash that each house goes for is exceptionally high.

Gated communities are in this manner not inside the limits of reasonable lodging.

  • Strict rules 

Although the rules imposed are for the betterment of the community, some applicable rules infringe on the personal preferences of some people. For example, one of the rules may be to paint your houses in the same color which may not be suitable for some individuals.

  • Invasion of privacy 

Doing surveillance of the different activities within the estate is unquestionably great for security purposes. In any case, the sense that the security personnel at the main gate knows everyone who visits you is in itself a privacy invasion.

Over and above, the benefits of living in a gated community far outweigh the disadvantages. Ensure to consult a property researcher on the best location should you decide to live in a gated community. Let’s now delve into the functions of a property manager.

Functions of a Property Manager

 The functions of a property manager vary depending on the type of real estate and the management agreement. Some of the real estate comes with the advantage of enlisting the services of a property manager who can help you list your property on platforms like AirBnB as well as manage the property. However, here are some of the underlying roles:

  1. Rent collection

As a property manager, your main role is to collect rent from the tenants on time.

Rental income is the major lifeforce of the business to the landlord.

Therefore, it’s the role of the property manager to set up a workable system

for rent collection every month.

To ensure that the property has a good market value and is in line with the current market shift, property managers have the right to adjust the rent every year depending on the property location and the market demand.

  1. Tenant management

A property manager has to develop communication skills as they are in constant communication with the tenants.  There are also responsible to ensure vacancies in the houses are filled. This they do by ensuring they attract new tenants through proper maintenance of the property and ensuring that the current tenants are satisfied.

They are also responsible for screening tenants. A professional manager should screen the tenants by looking at their credit history, criminal records, and their history as a tenant, among others. The screening reduces tenants’ turnover.

A property manager is also responsible for handling any tenant complaints, emergencies, and requests that may occur. Hence, they should always be within reach of the tenant.

  1. Leases

A property manager cushions the owner against losses by creating favorable lease agreements. At the same time ensuring that the set agreement is also agreeable with the tenants.

When the lease agreement is over, the property manager should access the property for any damage and deduct where necessary from the security deposit before the tenants move out. They are also responsible for issuing tenants who breach the contract with an eviction letter.

  1. Property Maintenance

A property manager is responsible for ensuring that the property is in good condition by conducting regular inspections, repairs, and troubleshooting.

Conducting regular repairs keeps the property in good shape and prevents the property from having major damage that would drain finances.

They should also ensure that the maintenance happens smoothly with minimal interruptions. They can achieve this by notifying the tenants before the scheduled maintenance time.

  1. Financial records

A property manager should ensure they keep proper books of account of the rental income collected and the costs of the different maintenances. The books should contain records of repairs and the costs incurred, insurance costs, records of the rent collected, inspection costs, and maintenance costs.

  1. Employee Supervision

In the event of other workers within the premise, the manager should ensure that the work delegated is correctly done. They also have the authority to set their salaries and fire them in case of a contract breach.

Buying land in Kenya

Whether you are purchasing land to build your future home or for residential or commercial investments, it’s important to conduct due diligence before purchase. Here are a few things you should know.

  1. The Nature of the land and its typography

Before purchasing land, it’s vital to know how you will use the land. It could be for commercial use, residential properties, industrial use, etc.

You should also be cognizant of the type of ownership you will have. In Kenya, there exist only two types of ownership

  1. Freehold. This is where you own the land indefinitely if the terms do not change. Land in the cities is rarely ever available for freehold lease terms.
  2. Leasehold. This type of ownership allows you to be a landowner for a set period after which you can renew the contract when it expires. Non-Kenyan citizens can lease land only for a period not exceeding 99years.

Knowing the nature of the land and its typography will help you determine whether it’s a worthwhile investment and if it will appeal to other buyers in the event you decide to sell the land in the future.

  1. Utilities

Before purchasing land, it’s important to consider if the land has access to utilities such as electricity and water.

Having this information will enable you to budget accordingly and know what additional costs you will incur should you decide to buy the property.

  1. Is the land located in riparian areas?

Riparian areas are locations adjacent to a water body (a water stream or a river). We have had unfortunate news where people lost their lives during the rainy season because of flooding as their property was close to the water stream.

It’s important to note that building your property in a riparian area in Kenya is prohibited. You don’t want to end up having your house deconstructed because of this.

To learn more about the property you are purchasing whether it’s located in a riparian area, you can do a free search on the Arthisasa website or hire a professional surveyor to view the land before purchase.

  1. It’s important to also identify is the land is accessible by road

This may seem like an obvious thing, however, some places have no road access. A path has to be created to access the land. You don’t want to purchase land that you cannot gain access to.

  1. Ensure you don’t get conned

Before making payments, it’s important to verify if the land really exists or if it has a current owner apart from the seller. Ask for the title deed and search before purchase.

Also, you mustn’t settle for a land purchase from just viewing the pictures. Imagine the horror of thinking you own land only to find out it belongs to someone else. Do your homework first to avoid getting conned and losing money.

Let’s now look at the process of land purchase.

The process of purchasing land in Kenya

As you decide on purchasing land, it’s important you also contact a lawyer to help you through the process as there are documents involved that need legal advice.

Here are the steps involved in the purchase of land:

  1. Location of the land

You can find land on purchase by enlisting the services of a researcher at Digicurated or doing a personal online search through real estate portals. Narrow down your search to the price and location, the two most important factors to consider in a land purchase.

Apart from conducting an online search, you can ask your friends or family for recommendations.

  1. Search the land

Once you have settled on the land you want to purchase, ask for the title deed from the seller and search on the Arthisasa platform, a free online platform. This platform helps you determine who is the owner of the land and other relevant information related to the land such as restrictions on the land, and how big it is.

For you to be able to search, you must sign up and register to the platform. To register you are required to have:

  • Your national ID and serial number
  • Phone number
  • Email address
  • Colored passport 
  1. After searching for the property, conduct a search and survey on the location of the land

If you’re buying property, it’s important to look it up in the relevant registry. Let’s say that the land is outside Nairobi County, in a county like Nakuru, you will have to contact the Nakuru survey office.

Every county has its stipulated fees. You can conduct land registries through the Ministry of Lands.

The search will reveal if the land had any outstanding land rates and rent which must be paid to the government before the transfer of ownership. Ensure that the seller has cleared any outstanding issues before transferring ownership.

If there are no outstanding payments, make and keep a copy of the clearance certificates and receipts.

In addition, surveying the land would help you know the boundaries of the land. The Ministry of Lands upon request grants the survey maps on the land to guide you. Also, if you have a surveyor they would advise.

Once you have the maps, go to the location of the land, and mark the boundaries to avoid disagreements during the sale process.

  1. Verification of the seller

Ensure that the seller is verified to sell the land to you if they are not the landowner. Depending on the type of land, they should show you a consent form.

It is during this stage that you need the help of a lawyer.

  1. The signing of the contract

The sales contract is a legally binding document that is drafted by the seller’s lawyer. The purpose of the contract is to safeguard both the buyer and seller and ensure that both parties benefit from the transaction.

You are to fill out and sign three copies of the contract: one for yourself, and one for the lawyer. The contract contains the following details:

  • Information about the buyer and seller
  • The property description
  • The price of the land and payment schedules
  • It shows who pays for what during the process
  • It describes what happens if there is a breach of the contract

There are also hidden costs included such as stamp duty on property value.  In urban areas, the stamp duty is 4% and 2% in rural areas. There is also a cost of legal representation which is highly influenced by the property value. Usually legal charges which includes filing fees and disbursements will cost between 1-2% of the property value. 

All these costs are included in the agreement.

  1. Land transfer

After you make all the payments, the seller will sign the land transfer documents ensuring you get what you paid for. You should contact your lawyer to help you with this process.

Remember to do your homework before beginning the purchase journey. It’s a good idea to enlist research services by Digicurated to help you make an informed decision. It may be a lengthy process but one that’s worthwhile in the end.

Title Deed

A registered title deed is an official document that shows:

  • The current land owner
  • The description and location of the property
  • Restrictions on the land usage
  • Charges and outstanding mortgages 
  • Warnings that affect the property

Advantages of having a title deed

  1. It’s an official document that shows the current land owner and individuals do not need to research the history of the title on the land.
  2. A registered title is state ensured. If you have suffered a loss of property assets as a result of an error or omission in the register by the registrar, you may be able to obtain compensation.
  3. By having a title, solving disputes emanating from rights over the land or ownership are easily resolved.
  4. If you want to secure a loan, financial institutions will demand a registered title deed.
  5. You can sell property with ease. 
  6. It makes your land easy to protect against fraudulent people.

Land Laws in Kenya

Land and the new Consitution

Classification of land

Under the new constitution, land has been classified into three categories:

Community land, private land, and public land.

Community land according to article 63 of the Constitution, is land that has been lawfully registered under the name group of representatives, land that has been transferred to a specific community lawfully, and any land which by an act of parliament is declared as community land.

Private land is land held by an individual either under freehold tenure or leasehold and any other land that by an act of parliament is declared as private.

Public land as defined under article 62 of the Constitution is State-owned land, unalienated land, land that has been transferred to the State which has no known heir, forests, minerals, reserves, seas, rivers, lakes, water catchment areas, land that falls in between low or high water mark areas,  and any other land which is not stipulated as private. It is the role of the National Land Commission to administrate public land. 

Land ownership by non-Kenyan Citizens

Under the new constitution, it was stipulated that non-citizens cannot own free land, and the maximum amount of time they can have a leasehold tenure is 99 years. 

Laws of leases

Long-term leases

Section 54 (5) of the Constitution, states that the Register of Land is to register long-term leases and issue rental certificates for maisonettes, apartments, townhouses, flats, or offices transferring ownership if the property has been properly georeferenced and approved by the statutory body responsible for surveying the country.

Unlawful eviction

A tenant who is vacated contrary to the terms of his lease shall be immediately relieved of any obligation to pay rent or other monies due under the lease or to perform any obligations of the lease. A tenant is deemed to be vacated if, at the commencement of the lease, the tenant is unable to obtain possession of the land or buildings or any part thereof as a result of any act or omission of the lessor contrary to the terms, express or implied, of the lease.

 The Functions of the National Land Commission

The National Land Commission is an independent commission that draws its mandate from the 2010 Constitution of Kenya, acts of parliament, and the 2009 National Land Policy. It was officially established under the 2012 National Land Commission Act.

Its mandate under the constitution includes:

  • Land management on behalf of the county and national government
  • Recommendation of National Land Policy to the national government.
  • Advise the national government of a thorough program of land title deed registration throughout the nation.
  • Organize land-related research and the use of natural resources then make recommendations to the proper authorities.
  • They should of their own accord or from a complaint brought conduct investigations on historic or present land injustices and suggest appropriate redress.
  • In land disputes, to encourage traditional methods of solving the disputes.
  • Evaluate premiums on fixed property and taxes on land as designed by law.
  • Have oversight responsibility and monitor land use and planning throughout the nation.

Mandate under the National Land Commission Act:

  • Alienate land on behalf of or with consent from the national and county governments.
  • Monitor the registration of all interests and rights in land.
  • Ensure that land designated for public use and state agencies is continually managed for its intended purpose for future generations.
  • Broaden and keep and powerful land facts control device at country-wide and county levels.
  • Broaden and inspire opportunities for various ways of solving disputes in land disputes and control.

Some of the transaction costs involved in the real estate process

In the process of purchasing land, there are various transactions involved that attract various fees. Beyond the price of land, in Kenya, there are more costs a buyer must account for. These extra costs are referred to as transaction costs.

These are costs that come during the purchase process. While some costs are fixed some are value based such as the type of real estate, the location of the property, commission fees, the documents you need, and the fees charged by the professionals you work with.

Let’s delve in and see the different costs.

  1. Research fees

Digicurated offers research services that provide high-quality information that will help a client decide the best places to purchase a home based on their needs. They rely on data to create reports that will guide a client and help them make the right decision.

For instance, if you need to know the best places that offer high rental income, or the best locations with high demand for AirBnB clients or simply th elocations offering the best social amenities or green spaces. They will highlight the best properties in the report and if you decide to take the process to the next step, you will be able to visit the properties virtually showing you the floor plan and enabling you to measure the size of the rooms and see finer details of the house. The location of the house will also be pinned.  

  1. Lawyer fees

For any real estate process to take place, a lawyer must be present. In Kenya, the lawyers are governed by the Advocates Remuneration Order which controls the fees the lawyers should charge the clients.

The law is designed this way so that should you have any grievances about the fees charged by the lawyer, you get a place to complain and get help.

According to the Advocates Remuneration Order, the minimum amount payable to a lawyer is Kes. 35,000. General legal fees which include filing and disbursements cost about 1-2% of the property value.

The lawyer must conduct due diligence on matters about the land before and after the process. Also, after the approval of the land purchase, the buyer is required to set aside transaction fees required for the lawyer to process the transfer documents from the seller to the buyer.

  1. Real estate agent fees

Having a real estate agent helps you a great deal during the purchase process. However, if you enlist Digicurated’s research services you may not need an agent as they will link you direct to the property owner or their lawyers/agent. Usually agents charge 3% of the value of the house to the seller.

  1. Mortgage fees

In most cases, buyers finance their properties on credit. This means that the buyer is required to pay some transaction costs to the lender when returning the capital borrowed. These transaction costs include interest on the loan and additional costs that may arise such as insurance and prepayment penalties.

If the buyer’s contribution is high, the interest rate may go down. There is also a charge imposed on the buyers from the lender for a title search.

  1. Search fees

These are fees incurred when verifying the valid owner of the land, other previous owners the land had, and transactions previously linked to the property. A search through the E-citizen platforms costs Kes. 500.

The buyer is also required to schedule a meeting with the Land Control Board which includes village elders and the assistant county commissioners. The meetings occur once per month and cost Kes. 1000.

Another option available to the buyer is by scheduling a meeting with the Special Land Control Board which includes the two transacting parties and the assistant county commissioners. This meeting is more frequent than the other one for the LCB and the cost is Kes. 5,000.

  1. Tax

The tax levied on all the transactions is called the stamp duty charged after the completion of the sale process. The stamp duty is imposed based on the location of the land. For land in urban areas, the stamp duty is 4% whereas land in rural areas is 2%.

The other tax charged is capital gains tax as of 2023 is charged 15% on the total net gain value. One can choose to pay in installments within the stipulated time. Payments are only made through KRA iTax.

  1. Utility Costs

After closing the sale, the buyer must account for utility costs such as water, electricity, garbage collection in urban areas, security costs, internet connectivity, and residential association fees.

 Property Tax

Rental income tax

This is a tax charged on rent collected from rental properties. The tax imposed on rent is based on the type of real estate and its use. For example, the rental tax income for residential property is different from that of commercial property.

It is payable by all companies, individuals, and partnerships who rent out property either for commercial or residential use.

Rental income is charged a flat rate of 10% on the monthly gross rent received.

Capital gain tax

This is a tax levied on the profit you earn from the transfer of a capital asset such as property. The tax is paid by the seller and is 15% of the net gains the seller received. It is the final tax charged and hence not subjected to more taxation after payment.

Net Gain = (Transfer value – Incidental Costs on Transfer) – Adjusted Cost ( Acquisition Cost + Incidental Costs on Acquisition + Any enhancement Cost)

Stamp duty

This is a tax collected by the Ministry of Lands on the transfer of property. It’s paid by the buyer. In rural areas, the stamp duty imposed is 2% while in urban areas it’s 4%. In the event land is sold to charitable organizations, they are exempted from paying this tax.


This is a type of loan between a financial institution and an individual or organization to lend money for the purchase, maintenance, and construction of a house or any other type of real estate. It is usually given at interest and the collateral is the house.

There are two major mortgages include:

  • Adjustable-Rate Mortgage – this is where the interest rate in your mortgages changes over time. The interest rate changes periodically and there is a benchmark used to determine the change.
  • Fixed Rate Mortgage – Unlike the adjustable-rate mortgage, the interest on a fixed rate mortgage remains constant over the loan period.

How long does it take to process a loan?

Some lenders will have the money in your account in about 24 to 48 hours after submitting your application, while others will take up to 2 weeks to process your application. The time it takes for a lender to approve your application has a big impact on how suitable a loan product is for you.

What is a bubble?

The term ‘bubble’ in real estate is when there is an increase in the prices of property to an extent that it becomes difficult for people to afford. In addition, the increase in prices is not supported by any fundamentals and as a result, the prices go down significantly causing a bubble burst. 

Main features of a real estate bubble

Increased property prices – A housing bubble is characterized by expanded costs that are higher than mortgage valuations making it difficult for speculators to meet their legally binding obligation commitments with credit suppliers.

Increased debt uptake – One of the major characteristics of a genuine bubble is an increment within the take-up of credits and more debt aided by the accessibility of cheaper credit.

Increment in property requests – Increment in property requests is brought approximately by speculations of rising costs and simple accessibility of reserves from moneylenders. These costs rise to levels excessively expensive by the public as financial specialists compete to place their stake within the few real estate items accessible within the market. 

Is the Kenyan real estate market experiencing a bubble?

The real estate market in Kenya is currently not experiencing a bubble. However, certain factors contribute to the increase in property prices such as:

  • Increase in the population
  • Economic growth
  • Reduces credit supply
  • Increased demand for housing
  • Increase in house prices owing to increased income levels

Real estate marketing strategies

Real estate is a unique industry when it comes to building a marketing strategy. Some industries and businesses focus solely on digital marketing methods, while others invest in traditional tactics like postcards and billboards.

In real estate, you’re likely to do all these things. For the most part, most agents don’t define a target audience for their marketing strategy, they just want customers and buyers. The wider the net, the more people they attract and the more revenue they bring in, and the more homes they sell. However, it’s important to have a defined target audience to help you market your properties effectively.

So, let’s look at the different marketing strategies you can employ as a real estate agent.

  1. Digital Marketing

The COVID -19 pandemic had many businesses move from the traditional forms of marketing to digital marketing. Some of the avenues in digital marketing strategies you can incorporate in real estate are:

i) Website

A website builds awareness of your personal brand as a real estate agent and promotes the homes you have for sale. More buyers and sellers are online than ever before. So, when you’re not online, you’re missing out on revenue and customers.

Having an online presence as a real estate agent also speaks volumes about your legitimacy and how seriously you take your job. At a minimum, it should include information about yourself (including an excellent bio), how to contact you, and any homes you are currently selling.

ii) Blog

Having a blog is another way to attract customers. The real estate industry is dynamic, and buyers will probably have questions on the market which you can readily answer in the different articles you write.

Be sure to link your blogs to your website so that more people interact with your business, hence creating awareness. Be sure to do thorough research on your target audience. What are their tastes and preferences, and what content or aspect interests them more in real estate? This helps you write content they relate to.

Also, be sure to do research on the real estate industry in Kenya, the current trends, and any other relevant information to equip you with relevant knowledge on the field and give your customers valuable content.

iii) Social Media

In the real estate business, social media is a tool you cannot afford to utilize. There are various ways you can use to market on social media such as a Facebook page that helps you touch base with potential clients and which you can share some of your blog content. An Instagram page to share photos of real estate properties you’re selling.

Other forms of digital marketing you can incorporate are paid advertisements and email.

Apart from digital marketing, you can incorporate traditional forms of marketing such as postcards and business cards, direct mail, and word of mouth.

Essential Real Estate Terms

Bubble – this is when there is an increase in the prices of property to an extent that it becomes difficult for people to afford.

House Appraisal – This is a process conducted by mortgage lenders to determine the value of the house during a sale or purchase. It’s from this appraisal that the lenders determine the mortgage to give.

Mortgage – This is a type of loan between a financial institution and an individual or organization to lend money for the purchase, maintenance, and construction of a house or any other type of real estate. It is usually given at interest and the collateral is the house.

Mortgage Refinancing  – Mortgage refinancing happens when an individual takes a new loan to pay off the original mortgage. Different types of mortgage refinancing include:

  • Rate-and-Term Refinance Loan – The goal of this type of mortgage refinancing is to change the interest rate and loan term without affecting the loan amount.
  • Cash-Out Refinance Loan – As the name suggests, this loan type is where one cashes out a portion of their home equity to take out cash to spend.
  • Cash-In Refinance Loan – Here is where one pays a lump sum amount of money to reduce their loan. This tremendously cuts the loan burden and could help you qualify for lower interest rates. However, before paying the lump-sum amount, it’s important to evaluate whether doing so will deprive you of more worthwhile opportunities.
  • No-closing-cost refinance No-closing-cost refinance allows the homeowner to refinance without paying the closing costs upfront. Instead, the costs are put together with the loan amount.

Equity – This is the part of your home that you own aside from the mortgage remaining. While you legally own the house, your lender has an interest in the house until the loan is completely paid off.

Escrow – Money held by a third party until the transaction is complete.

Closing/transaction costs – these are expenses associated with the home apart from the actual cost. Both the buyer and seller have closing costs.

Title Deed – This is a legal document that shows the current owner of the property, history of transfers, and the type and size of the land the property is on.

Search – It is a process conducted before purchasing real estate. Where you look for property within platforms such as Arthisasa to check the status of the land or property you intend to purchase.

Transfer – Represents a formal handover of property title from the seller to the buyer signed by both parties. 

Real Estate Investment Trust (REIT) – This is a passive real estate income strategy. Investing in REITs is similar to how one would invest in stocks and shares. Investors consolidate their finances to purchase real estate such as apartment complexes, healthcare facilities, and hotels. The investors will then receive a portion of their profits generated as dividends.

Yield– this is the total annual income for instance rental payments earned from the investment, as a percentage of the investment’s total cost. It is different from a return which also looks at the capital gains.


The real estate industry is vast and has many facets to it. If you’re an investor or a buyer, be sure which type of real estate you want to invest in and do your research to avoid losing finances. As a buyer, enlisting the services of Digicurated is a wise move and will help you make an informed decision based on data. For a seller, if you’re starting in the field, specialize first in one type of real estate then grow.

Remember, the real estate business in Kenya is a lucrative opportunity and knowing where and how to go about it, produces great yields and results as Kenya’s real estate market has the potential for higher returns. Foreign investors can also enter Kenya’s real estate market relatively quickly. 

The introduction of REITs has also caused the real estate market to grow exponentially. Kenya also has a favorable business environment and a diligent workforce that attracts foreign and domestic investors to invest in property development in internationally renowned holiday destinations such as the Masai Mara National Reserve, Naivasha, Nanyuki, the Coast, and Nairobi.

Additionally, the property market in Kenya is primarily a rental market. The residential sector is currently experiencing the greatest demand due to a rapidly growing population and a growing middle class. A modern big house in Nairobi can cost $1.1 million in a developed country.

Real estate is a complex industry, yet vital to our economy and lifestyle. Whether you’re someone interested in buying their first home or  looking to flip a house in Nairobi consider looking at  property for sale along Ngong road or are curious about real estate as a career,  it’s important to understand the real estate process and the different working dynamics involved.

Real estate is an industry that plays by its own rules. As technology, income, buying habits, and lifestyles change, real estate is becoming increasingly complex and exciting. It’s your job to stay on the ball and we’re always here to make it easier for you to make the right decisions.

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