Real estate is seen as one of the surest investment options. However, there are risks involved. Reuben Kimani, CEO of Username Investments, spoke to Jacqueline Mahugu on what you need to know before you take a plunge.
1. Don’t wait then buy. Buy, then wait.
Do whatever you can now to afford property. It has been evident that properties appreciate very fast in Kenya, in a way that if you decide to save money and wait for some time, you might not afford it any more.
Look for what you can afford now and don’t let the figures scare you. Getting a loan from a Sacco is a good starting point. Look for properties that are affordable from companies that have such offers. If you get lump sums from per diems, bonuses, overtime – these are all perfect funds that you can use for the deposit.
2. Analyse the area you are buying
If in 2010 three people bought three different pieces of land – one in Rongai, one along Thika Road and another in Mombasa, if they were all to dispose those properties right now, the values would be very different.
Someone who does research easily gains. You need to evaluate why you need to invest in that location. Check what is coming up in that location and its relative distance from key urban establishments.
If it is near the Standard Gauge Railway (SGR) for instance, it has to be near a station. Before committing any monies, do proper due diligence.
3. Get a map of upcoming developments
There is a map that is easily available and that you can also get online, which shows you all the roads in Nairobi, the ones that are to be built and upcoming bypasses. Get government plans and those of other agencies that are involved in Vision 2030.
Those plans will tell you exactly where the railways are coming, where the highways will be done, where roads will be expanded, where bypasses will be built and where universities will come up. So you can always tell what the government is planning in terms of road development.
Real estate investment companies do all that research for their properties in addition to finding which roads will be taking priority, this is also an option you can use.
4. Consider the terrain
I have seen people buying rocks and hills. There are people who sell bushes, land in the middle of nowhere with no access. Make sure you view the property first to avoid such issues.
That way, you see the terrain, the type of soil that is there and check whether the land is accessible. You will also tell whether there is access to water and electricity and what other value that piece of land offers.
5. Check the pricing
There are people in the real estate industry who overprice their property for no good reason. You can decide to use the services of a valuer, but you do not have to do this because basic research can help you.
If you want to know the value of property in a certain area, you can just go to the internet and get the average.
Do basic research so that you do not buy overpriced property. It can easily save you Sh100, 000. Conversely, be wary of someone offering you property that is seriously cheap compared to the properties in that area.
6. Use credible channels
In 2016 there were about 6,000 cases of fraud, according to the Kenya National Bureau of Statistics, so it is very easy to fall prey to con men. You need to do a lot of due diligence to prevent this.
The other option, which is easier, is to just deal with established, credible organisations, which are known to conduct thorough research by default. In addition, any risk fall on them, not on you.
Avoid agents and brokers. About 50 per cent of them cannot be trusted, because they either have not done their own research.
Do a basic search on the property and the seller and use a credible lawyer.
7. You must view the property
It is very important to go and see the land you are buying. It doesn’t matter whether it is a company doing the buying for you, make sure before appending your signature to any agreements you already what it is that you are looking into acquiring in the long run.