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Real Estate in Kenya
Superwoman910
#1 Posted : Monday, June 25, 2018 2:58:11 PM
Rank: Hello


Joined: 6/25/2018
Posts: 3
Location: Nairobi
Hi Wazuans,
I am thinking of investing in the real estate sector. The thing is that there is a lot of mix up from reports about its current status, i.e., whether the returns are good and worth it, or not.
What do you guys think?
MugundaMan
#2 Posted : Monday, June 25, 2018 3:47:41 PM
Rank: Elder


Joined: 1/8/2018
Posts: 2,211
Location: DC (Dustbowl County)
Show me a sensible fellow who has not made a pile investing long term in real estate in Kenya from as far back as 1963 and I will show you a fire engine red flying horse in Pluto. And let nobody counter with even a single article written by Lukorito Jones.
RIEK01
#3 Posted : Monday, June 25, 2018 4:02:14 PM
Rank: New-farer


Joined: 2/8/2018
Posts: 73
Read the below report as it will give you an accurate picture of the sector.

https://stanlibfahariire...T-Annual-Report-2017.pdf
Superprime1
#4 Posted : Monday, June 25, 2018 4:21:16 PM
Rank: Member


Joined: 5/2/2018
Posts: 267
What type/kind of an investment in real estate? Is it rental income-generating commercial or residential property/ies? Or are you intending to buy land and hold to sell in future? And which market segment are you interested in or focused on? BTW, buying Stanlib Fahari I-Reit is another way of investing in real estate....
MugundaMan
#5 Posted : Monday, June 25, 2018 4:31:13 PM
Rank: Elder


Joined: 1/8/2018
Posts: 2,211
Location: DC (Dustbowl County)
I would NOT recommend investing in an REIT at all. Investing in an REIT is like paying a bank a monthly commission to invest for you. Why pay the middleman's overhead and salaries when you can buy directly? Be wise.
Superprime1
#6 Posted : Monday, June 25, 2018 4:51:18 PM
Rank: Member


Joined: 5/2/2018
Posts: 267
MugundaMan wrote:
I would NOT recommend investing in an REIT at all. Investing in an REIT is like paying a bank a monthly commission to invest for you. Why pay the middleman's overhead and salaries when you can buy directly? Be wise.


Well, it would depend on how much capital one has. If you need some 'parking' that must be real estate-oriented, then an I-Reit would do as you seek a 'permanent' home. If you have significant capital, then you have broader options.
Wakanyugi
#7 Posted : Monday, June 25, 2018 6:25:33 PM
Rank: Veteran


Joined: 7/3/2007
Posts: 1,634
MugundaMan wrote:
Show me a sensible fellow who has not made a pile investing long term in real estate in Kenya from as far back as 1963 and I will show you a fire engine red flying horse in Pluto. And let nobody counter with even a single article written by Lukorito Jones.


This is very true.

On three different occasions I have sunk money into real estate at a time when everybody told me I was being foolish. In each case I have more than trebled my money over ten years, at a minimum. In one of the cases I actually multiplied my investment by about 30. Granted this is exceptional but it is not pure luck. I know a few people who have done the same or better.

Don't listen to doom sayers who keep preaching about a sector bust that has never happened. Even when it does, the pullback is still much less than for other investments.
"The opposite of a correct statement is a false statement. But the opposite of a profound truth may well be another profound truth." (Niels Bohr)
Swenani
#8 Posted : Tuesday, June 26, 2018 9:29:47 AM
Rank: User


Joined: 8/15/2013
Posts: 13,236
Location: Vacuum
I think real estate is good for guys with cash and not loans.

When I say real estate, I mean buying and building houses and not buying land to speculate
If Obiero did it, Who Am I?
Wororo
#9 Posted : Tuesday, June 26, 2018 10:23:10 AM
Rank: Member


Joined: 1/30/2011
Posts: 207
Swenani wrote:
I think real estate is good for guys with cash and not loans.

When I say real estate, I mean buying and building houses and not buying land to speculate


Very true...

The loan (interest) aspect is usually tricky at times especially when it comes to prime land/property purchases etc - but unfortunately majority of Kenyans considerably ignore to cost factor the interest charged - when citing the purchase real price/cost of the land or/and property...
wukan
#10 Posted : Tuesday, June 26, 2018 10:42:50 AM
Rank: Veteran


Joined: 11/13/2015
Posts: 1,567
Wakanyugi wrote:
MugundaMan wrote:
Show me a sensible fellow who has not made a pile investing long term in real estate in Kenya from as far back as 1963 and I will show you a fire engine red flying horse in Pluto. And let nobody counter with even a single article written by Lukorito Jones.


This is very true.

On three different occasions I have sunk money into real estate at a time when everybody told me I was being foolish. In each case I have more than trebled my money over ten years, at a minimum. In one of the cases I actually multiplied my investment by about 30. Granted this is exceptional but it is not pure luck. I know a few people who have done the same or better.

Don't listen to doom sayers who keep preaching about a sector bust that has never happened. Even when it does, the pullback is still much less than for other investments.


Now I understand why you are insisting on the interest rate caps. Feudalism feels good.

wukan
#11 Posted : Tuesday, June 26, 2018 11:11:50 AM
Rank: Veteran


Joined: 11/13/2015
Posts: 1,567
Superwoman910 wrote:
Hi Wazuans,
I am thinking of investing in the real estate sector. The thing is that there is a lot of mix up from reports about its current status, i.e., whether the returns are good and worth it, or not.
What do you guys think?


Real estate in kenya is the accumulation of dead assets in the hope it will serve you at a later date. You will rarely get to unlock its full potential in your lifetime(maybe your kids will). It is capital intensive and the returns are only marginally higher than inflation. 5-7% rental yield maybe 5% capital gains.

The upkeep of real estate is also expensive. The lack of planning and development control also means you may end up in a slum like neighborhood or a place that resembles a prison/concentration camp(barbed wire, guards and dogs).

The current status looks like the tail end of a boom cycle most landlords are not getting the asking rent, lots of vacancies in retail and commercial space and defaulting tenants. However Kenyan real estate has lots of potential most of the land is under-developed and underutilized.

Wakanyugi
#12 Posted : Tuesday, June 26, 2018 11:59:34 AM
Rank: Veteran


Joined: 7/3/2007
Posts: 1,634
wukan wrote:
Wakanyugi wrote:
MugundaMan wrote:
Show me a sensible fellow who has not made a pile investing long term in real estate in Kenya from as far back as 1963 and I will show you a fire engine red flying horse in Pluto. And let nobody counter with even a single article written by Lukorito Jones.


This is very true.

On three different occasions I have sunk money into real estate at a time when everybody told me I was being foolish. In each case I have more than trebled my money over ten years, at a minimum. In one of the cases I actually multiplied my investment by about 30. Granted this is exceptional but it is not pure luck. I know a few people who have done the same or better.

Don't listen to doom sayers who keep preaching about a sector bust that has never happened. Even when it does, the pullback is still much less than for other investments.




Now I understand why you are insisting on the interest rate caps. Feudalism feels good.



No you don't. Careful about that Kiwaru.
"The opposite of a correct statement is a false statement. But the opposite of a profound truth may well be another profound truth." (Niels Bohr)
Wakanyugi
#13 Posted : Tuesday, June 26, 2018 12:04:13 PM
Rank: Veteran


Joined: 7/3/2007
Posts: 1,634
wukan wrote:
Superwoman910 wrote:
Hi Wazuans,
I am thinking of investing in the real estate sector. The thing is that there is a lot of mix up from reports about its current status, i.e., whether the returns are good and worth it, or not.
What do you guys think?


Real estate in kenya is the accumulation of dead assets in the hope it will serve you at a later date. You will rarely get to unlock its full potential in your lifetime(maybe your kids will). It is capital intensive and the returns are only marginally higher than inflation. 5-7% rental yield maybe 5% capital gains.

The upkeep of real estate is also expensive. The lack of planning and development control also means you may end up in a slum like neighborhood or a place that resembles a prison/concentration camp(barbed wire, guards and dogs).

The current status looks like the tail end of a boom cycle most landlords are not getting the asking rent, lots of vacancies in retail and commercial space and defaulting tenants. However Kenyan real estate has lots of potential most of the land is under-developed and underutilized.



Thus speaks the armchair investor. The typical spiel is to criticse but offer no alternatives. I have lost count of the number of times I have made money by reading such so called advise on Wazua and doing the exact opposite.
"The opposite of a correct statement is a false statement. But the opposite of a profound truth may well be another profound truth." (Niels Bohr)
Swenani
#14 Posted : Tuesday, June 26, 2018 12:05:06 PM
Rank: User


Joined: 8/15/2013
Posts: 13,236
Location: Vacuum
wukan wrote:
Superwoman910 wrote:
Hi Wazuans,
I am thinking of investing in the real estate sector. The thing is that there is a lot of mix up from reports about its current status, i.e., whether the returns are good and worth it, or not.
What do you guys think?


Real estate in Nairobi is the accumulation of dead assets in the hope it will serve you at a later date. You will rarely get to unlock its full potential in your lifetime(maybe your kids will). It is capital intensive and the returns are only marginally higher than inflation. 5-7% rental yield maybe 5% capital gains.

The upkeep of real estate is also expensive. The lack of planning and development control also means you may end up in a slum like neighborhood or a place that resembles a prison/concentration camp(barbed wire, guards and dogs).

The current status looks like the tail end of a boom cycle most landlords are not getting the asking rent, lots of vacancies in retail and commercial space and defaulting tenants. However Kenyan real estate has lots of potential most of the land is under-developed and underutilized.



There are good opportunities in Mashinani for real estate
If Obiero did it, Who Am I?
Superwoman910
#15 Posted : Tuesday, June 26, 2018 12:34:23 PM
Rank: Hello


Joined: 6/25/2018
Posts: 3
Location: Nairobi
MugundaMan wrote:
Show me a sensible fellow who has not made a pile investing long term in real estate in Kenya from as far back as 1963 and I will show you a fire engine red flying horse in Pluto. And let nobody counter with even a single article written by Lukorito Jones.


Laughing out loudly exactly why I want to invest. It is stable and almost a guaranteed good returns in the long term.
wukan
#16 Posted : Tuesday, June 26, 2018 12:59:52 PM
Rank: Veteran


Joined: 11/13/2015
Posts: 1,567
Wakanyugi wrote:
wukan wrote:
Superwoman910 wrote:
Hi Wazuans,
I am thinking of investing in the real estate sector. The thing is that there is a lot of mix up from reports about its current status, i.e., whether the returns are good and worth it, or not.
What do you guys think?


Real estate in kenya is the accumulation of dead assets in the hope it will serve you at a later date. You will rarely get to unlock its full potential in your lifetime(maybe your kids will). It is capital intensive and the returns are only marginally higher than inflation. 5-7% rental yield maybe 5% capital gains.

The upkeep of real estate is also expensive. The lack of planning and development control also means you may end up in a slum like neighborhood or a place that resembles a prison/concentration camp(barbed wire, guards and dogs).

The current status looks like the tail end of a boom cycle most landlords are not getting the asking rent, lots of vacancies in retail and commercial space and defaulting tenants. However Kenyan real estate has lots of potential most of the land is under-developed and underutilized.



Thus speaks the armchair investor. The typical spiel is to criticse but offer no alternatives. I have lost count of the number of times I have made money by reading such so called advise on Wazua and doing the exact opposite.


Maybe I'm an armchair investor in real estate after witnessing relatives reduced to paupers chasing the real estate dream. Lucky I got to travel the world to realize there is much wealth creation selling goods n services.
wukan
#17 Posted : Tuesday, June 26, 2018 1:15:10 PM
Rank: Veteran


Joined: 11/13/2015
Posts: 1,567
Swenani wrote:
wukan wrote:
Superwoman910 wrote:
Hi Wazuans,
I am thinking of investing in the real estate sector. The thing is that there is a lot of mix up from reports about its current status, i.e., whether the returns are good and worth it, or not.
What do you guys think?


Real estate in Nairobi is the accumulation of dead assets in the hope it will serve you at a later date. You will rarely get to unlock its full potential in your lifetime(maybe your kids will). It is capital intensive and the returns are only marginally higher than inflation. 5-7% rental yield maybe 5% capital gains.

The upkeep of real estate is also expensive. The lack of planning and development control also means you may end up in a slum like neighborhood or a place that resembles a prison/concentration camp(barbed wire, guards and dogs).

The current status looks like the tail end of a boom cycle most landlords are not getting the asking rent, lots of vacancies in retail and commercial space and defaulting tenants. However Kenyan real estate has lots of potential most of the land is under-developed and underutilized.



There are good opportunities in Mashinani for real estate


mashinaniSad can't even spend the night there without being visited.
point
#18 Posted : Tuesday, June 26, 2018 1:25:00 PM
Rank: New-farer


Joined: 8/23/2015
Posts: 64
Location: nairobi
wukan wrote:
Wakanyugi wrote:
wukan wrote:
Superwoman910 wrote:
Hi Wazuans,
I am thinking of investing in the real estate sector. The thing is that there is a lot of mix up from reports about its current status, i.e., whether the returns are good and worth it, or not.
What do you guys think?


Real estate in kenya is the accumulation of dead assets in the hope it will serve you at a later date. You will rarely get to unlock its full potential in your lifetime(maybe your kids will). It is capital intensive and the returns are only marginally higher than inflation. 5-7% rental yield maybe 5% capital gains.

The upkeep of real estate is also expensive. The lack of planning and development control also means you may end up in a slum like neighborhood or a place that resembles a prison/concentration camp(barbed wire, guards and dogs).

The current status looks like the tail end of a boom cycle most landlords are not getting the asking rent, lots of vacancies in retail and commercial space and defaulting tenants. However Kenyan real estate has lots of potential most of the land is under-developed and underutilized.



Thus speaks the armchair investor. The typical spiel is to criticse but offer no alternatives. I have lost count of the number of times I have made money by reading such so called advise on Wazua and doing the exact opposite.


Maybe I'm an armchair investor in real estate after witnessing relatives reduced to paupers chasing the real estate dream. Lucky I got to travel the world to realize there is much wealth creation selling goods n services.


Real estate holds so much capital that can be applied in industry. a plot of land for the sake of it is a waste of cash if you have an income generating activity.
Superwoman910
#19 Posted : Tuesday, June 26, 2018 1:38:38 PM
Rank: Hello


Joined: 6/25/2018
Posts: 3
Location: Nairobi
Superprime1 wrote:
What type/kind of an investment in real estate? Is it rental income-generating commercial or residential property/ies? Or are you intending to buy land and hold to sell in future? And which market segment are you interested in or focused on? BTW, buying Stanlib Fahari I-Reit is another way of investing in real estate....


I think rental (residential) is the best way to go. Cytonn has some pretty good looking properties that are also affordable (in Ridgeways and Ruaka). Just want to make sure it is the absolute best decision before investing with them
MugundaMan
#20 Posted : Wednesday, June 27, 2018 7:07:52 AM
Rank: Elder


Joined: 1/8/2018
Posts: 2,211
Location: DC (Dustbowl County)
Wakanyugi wrote:


Thus speaks the armchair investor. The typical spiel is to criticse but offer no alternatives. I have lost count of the number of times I have made money by reading such so called advise on Wazua and doing the exact opposite.


Laughing out loudly Laughing out loudly
Too funny and yet so true, brother!
I was one of those who started out a long time ago listening to what I thought was very convincing spiel of "armchair investors" who chided me with harsh tones and waggy fingers about the perils of investing in real estate in Kenya. But when I saw my risk-taker peers minting big time from very modest investments in far flung areas held over time, I got religion fast! No other investment in this here Kenia comes close to matching the stability, safety and consistency of real estate of any form well bought and held over the long term, whether developed or not.
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