Advantages Of Buying Rental Property As An Investment In KenyaJul 20, 2022 Land
Advantages of Buying Rental Property as an Investment in Kenya
While a group of Kenyans feel the harder-than-usual economic times, others don’t know what to do with their disposable income … and such is life. Over the last decade, young Kenyans have found creative ways of creating multiple income streams – from social media interactions/selling/influencing to taking advantage of the gig economy that has truly made the world a global village. The extra income leaves most people vulnerable - being as our school system doesn’t really teach financial literacy – which allows pyramid schemes and other scams to thrive.
While we now have new and innovative investment vehicles, such as forex and cryptocurrency trading (that we are not discounting), there is always the tried and tested asset that has worked for thousands of years: Land. Quick fact: land is always on an upward trajectory since it has a finite useful life. Unless it has depletable resources – such as minerals – this asset is typically never depreciated in the books. And you know you can always make good use of what’s left after the minerals are all mined, right?
So, take a serviced plot – like one of these here – as an example. How can you turn it into a cash cow? Naturally, by developing it into residential property to rent out, getting into commercial agriculture, or planting trees to harvest later. While rental property will not return its value in a year or even four, it set you off on the right path to creating wealth from the ensuing capital growth.
Here’re some advantages of investing in rental property:
Consistent Source of Income
When you develop that property we mentioned above, you could rent it out for rental income. If you can ensure occupancy for the whole year or at least the better part of it, you are looking at consistent passive income. Rental property, when done right, will not need too much tending as long as it is occupied, so you sail relatively smoothly.
If we could make a quick comparison here, your rental income will yield better than the returns from government securities (albeit as safe) and is more predicable than investing in stocks. Remember expenses that contribute to making the property rentable are allowable for tax purposes.
Security for Securing Loans
Since you own the property, you can use it as collateral to secure loans. Banks will also advance you term loans from consistent and provable rental income. Most people find this as a good way to diversify your investments and build generational wealth.
Land is always appreciating when all factors remain constant, so your initial capital will grow exponentially. You just need to get the right advice that will help you secure property in an area with growth prospects and you can count on growing capital for a long time. You can also sell the property whenever you need if your plans change or you are cash-strapped, and it doesn’t hurt selling at more than you bought.
Things to Consider when Buying Rental Property
Whether you are buying serviced plots or already developed rental homes, these three points should apply:
Location: Proximity to good schools, a shopping center or mall, and access to the nearest roads are factors that most renters look out for in a home.
Security: No one wants to live where they’re likely to get jumped while jogging in the morning or driving home late in the evening. This one will make or break your property.
Amenities: Consistent water supply, electricity, solar supplementation, and usable feeder roads matter to the modern home renter, especially if they are looking at settling in the less urban serene parts of the country.
You always want to do your due diligence so you know what you are getting into from the jump. Quite a lot goes into securing the right property – from the footwork to jumping through mandatory legal hurdles. Luckily, that’s what Pro Property Ltd does best, and your only main decision today is when to contact us to get this process started. Reach out and let us find you your new/next investment vehicle.