‘Niko na ka plot mahali…” (I have a plot somewhere) is a common conversation starter in many social gatherings. This is so common that a person mentioning a ‘ka-plot’ will be quickly understood by anyone around them to be talking about a piece of land. Such is Kenyans fascination with matters land and real estate.
Real estate and property in general is tough business and the field is peppered with land mines that can obliterate your returns. That’s why it’s important to do detailed research before you dive in so you’re on top of all the pros and cons of real estate and property investing. The following are the features you have to look out for before venturing in rental property.
Property taxes likely will vary widely across your target area, and you want to be aware of how much you’ll be losing. High property taxes are not always a bad thing—in a great neighborhood that attracts long-term tenants, Kangundo Road for example, however, there are also unappealing locations that also have high taxes.
No one wants to live next door to a hot spot of criminal activity. The local police or blogs should have accurate crime statistics for neighborhoods. Check the rates for vandalism, and for serious and petty crimes, and don’t forget to note if criminal activity is on the rise or declining. You might also want to ask about the frequency of a police presence in your neighborhood. Areas in the Eastlands like Kayole, Umoja 1 and Kariobangi have been famous for crime.
Consider the quality of the local schools if you’re dealing with family-sized homes. Although you will be mostly concerned about monthly cash flow, the overall value of your rental property comes into play when you eventually sell it. If there are no good schools nearby, it can affect the value of your investment.
The neighborhood in which you buy will determine the types of tenants you attract and your vacancy rate. If you buy near a university, chances are that students will dominate your pool of potential tenants and you could struggle to fill vacancies every summer.
Number of Listings and Vacancies
If a neighborhood has an unusually high number of listings, it may signal a seasonal cycle or a neighborhood in decline—you need to find out which it is. In either case, high vacancy rates force landlords to lower rents to attract tenants.
Tour the neighborhood and check out the parks, restaurants, gyms, movie theaters, public transportation links, and all the other perks that attract renters.