Property development is a very profitable business. With the onset of the sectional property title legislation, this has propelled development of residential units for sale to an even higher level.

The target clientele is a very crucial factor in property development. There is low cost, middle cost and high cost housing.

Low cost.

These are houses that are located a bit far from the main road and towns. Here an 8th costs around KES 300,000. The quality of construction is low so the cost of construction per square meter is KES 17,000. The 3 bed roomed house here is smaller-90 square meters. This brings the total cost of construction to 90 x 17,000=KES1, 530,000. The total cost of investment is KES 1,530,000 + KES 300,000=KES 1,830,000.
The house is sold for KES 3,000,000. The profit margin is KES 3,000,000 – KES 1,830,000=KES 1,170,000.

Middle cost.

These are houses that sell for an average of KES 5,000,000. Such projects are mainly located in areas that are in close proximity to major towns and roads.
They are built within a 50 feet by 100 feet plot-1/8th of an acre.
A good 8th of an acre close to the road costs roughly KES 1,200,000 along Mombassa road in Syokimau area.

Construction of a 3 bedroom house of approximately 100 meters squared at KES 25,000 per meter squared will cost KES 2,500,000. The total investment will come to KES 3,500,000.
The profit margin is KES 5,000,000 – KES 3,500,000= KES 1,500,000.


High cost.

These are houses that are located inside major well-planned towns such as Hurlingham, Lavington, and Runda.Read more on www.a4architect.com