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The real estate business in Kenya is one of the most lucrative ventures since real estate properties gain value with time. A house built 25 years ago or land bought 12 years ago is now worth 10 times oe over the initial value.
Real estate business offers different opportunities including being a landlord, property manager, real estate agent, property developer, real estate consultancy, or real estate blogger.
Depending on the market demand and your budget, you can settle for a real estate business that meets the prospects’ needs. So, how do you invest in the real estate industry?
Let’s find out!
Real Estate Business Options In Kenya
When most first-time entrepreneurs hear real estate, they think of owning property or purchasing large parcels of land and dividing them to sell to Kenyans looking for land. Alternatively, they think of building rental apartments to lease to tenants.
Well, the real estate industry has numerous opportunities for you to explore depending on your skills, starting capital, and goals.
Here is a list of the different areas you can venture into:
1. Landlord/Land Owner
This is the most popular real estate business in Kenya.
The landowner purchases a piece of land, following the legal process to be the lawful owner. Then leases it to a lessee or build rental apartments to create a real estate investment depending on their preferences and needs.
If you build rental apartments, you become a landlord earning rental income. Note that before you build an apartment you must visit the local government to secure the construction permit.
Advantages
- It guarantees you financial independence for a lifetime.
- All earnings belong to you if you acquired land and rentals debt-free.
- Rent amounts always go up as time passes.
- You’re in control of your business – you can choose your clients.
Disadvantages
- You’re not guaranteed that the rental apartments will be fully occupied.
- Some tenants delay making payments.
- There’s no holding contract to keep your tenants so they can leave.
- You might have to incur repair costs due to property damages.
2. Real Estate Agent
A real estate agent specializes in marketing property on behalf of landlords or landowners. They are the bridging gap between real estate sellers and buyers. When done right, this business can rake in a high income.
To start a real estate agent business you need to fulfill the following:
I. Register as a member of the Kenya Professional Realtors Association of Kenya.
II. Secure certification and license from the Land Registry.
Advantages
- It’s a high-paying profession.
- It’s easier to penetrate this business than the landlord option.
- You can learn as you go.
Disadvantages
- You must be acquainted with the legal aspects of land selling.
- This field poses challenges such as conmen
3. Property Manager
Ironically the people we commonly dub to as agents are not agents. Instead, the industry refers to them as property managers.
This business category entails collecting rent on behalf of the landlord. It also involves property maintenance activities such as ensuring the apartments are supplied with water and maintaining cleanliness.
To be a property manager you must understand the real estate law involving the property owner and the tenants. Additionally, you should be a registered member of the Kenya Professional Realtors Association.
Advantages
- It’s easy to penetrate this area since it’s not capital-intensive.
- You can enjoy substantial income depending on your agreement with the landlord and the type of apartment.
- Your integrity and good management skills can fetch you massive clients increasing your income.
Disadvantages
- You must be ready to deal with difficult tenants.
- Apartments can stay unoccupied for a long period, losing income.
- Evicting tenants without following the law might lead you to court.
4. Real Estate Consultancy Business
You don’t have to be a landowner to open a real estate consultancy business!
Reason?
Your work is to advise clients about real estate transactions, your clients will comprise real estate developers, lenders, and property developers.
To become a real estate consultant you must register and get certified for a seamless operation.
Advantages
- You have full control of your business.
- As you become established you’ll attract a massive client base.
Disadvantages
- It takes several years to build a good reputation.
- It is a capital-intensive business.
5. Property Developer
This is one of the most profitable real estate businesses in Kenya presently. As a property developer, you purchase land and implement value-addition strategies before reselling it.
Additionally, you create a construction design and market the property. To become a property developer you have to obtain government permits and licenses.
Advantages
- Property development is highly profitable.
- Value-added properties attract massive prospects.
- If you like traveling this business is ideal for you.
- Value-added properties sell fast.
Disadvantages
- Obtaining legal documents can be time-consuming and cumbersome.
- It’s a capital-intensive investment.
- The industry faces quacks with some selling disputed land.
6. Real Estate Producer
Land and housing are a favorite to almost all Kenyans with some purchasing it for investment while others want ownership. Fortunately, the selling process involves taking epic videos and images to ensure great marketing.
You can take this opportunity and become a real estate commercial or TV program producer. The good news is that it pays premium rates that will help you achieve your financial goals.
Advantages
- It is a high-paying career.
- You network with other wealthy businesspeople.
- You become knowledgeable in the real estate industry.
- If you love architectural buildings, you’ll explore a lot of them.
Disadvantages
- Acquiring equipment is expensive.
- Some high-end areas require that you get permits before shooting.
- It’s a competitive career.
7. Real Estate Blogger
Are you a freelance writer with an eye for the real estate industry?
If yes, then you can explore the real estate blogging business. All you need to do is have ample industry knowledge and acquire the necessary tools to produce outstanding content that meets the target audience’s needs.
Advantages
- You are your boss so you get to control your schedule.
- You can work for multiple clients (website owners) at a time.
- You determine your payment.
Disadvantages
- Conducting research can be expensive.
- Finding high-paying clients within the country is challenging.
7 Steps To Start a Real Estate Business In Kenya
To start a real estate business you’ll need to fulfill some requirements, including:
Step 1. Conduct Market Research
Opening a business without adequate information about the market can lead to poor performance or closing down. That’s why it’s essential to conduct thorough market research that shows you where the demand is and how you can meet it to maximize your income.
Although magazines and newspapers are great sources during research, you should delve deeper. Fortunately, the established real estate websites help you get real data about the industry enabling you to strategize better before penetrating the market.
Step 2. Prepare an Exhaustive Business Plan
Most of the real estate business options we’ve covered are capital-intensive. As a result, you should create an in-depth business plan that proves to investors and financiers that your business idea is worth investing in.
So, ensure you include all the necessary elements in your documents including growth strategies, risk mitigation plans, and business goals.
Step 3. Find The Right Business Name
The right business name should be captivating, memorable, and informative. Hence, you should choose a name such that people link it to real estate when it appears on television or social media.
Think of Optiven and Hauzisha, no matter where they appear all prospective clients think is land and building dealers. Remember you’ll be competing with such established real estate companies so come up with a good name.
Once, you have a unique name for your business, register your company on eCitizen. The government provides easy-to-follow steps on this website.
Step 4. Raise The Capital
When doing your market research and writing the business plan, you discover the exact figure to work with. Savings are a great source of startup capital, however, they are usually less most times due to the nature of the business.
To raise enough funds for your real estate business you might need to approach like-minded investors and partner with them. This will help you pool resources together, empowering you.
Alternatively, you can request help from close relatives or friends to contribute to your new startup.
Step 5. Obtain Legal Requirements
Operating a business without legal approval and documents in Kenya is a serious offense. So ensure you fulfill these two requirements:
- Secure KRA PIN
Once you register your company you should apply for a KRA PIN on eCitizen. This document plays a vital role as it helps you open a bank account and separate company transactions from personal ones which is a great deal in taxation.
- Register with EARB
As a real estate businessperson, you must register with the Estate Agents Registration Board. This will confirm to other parties that you’re competent and meet the industry’s standard requirements.
Step 6. Create an Excellent Website and Establish an Online Presence
Now that you have the name and all the business documents, you can develop a good website. This will help you accomplish a wider reach to fetch more clients.
Additionally, you should create relevant content and publish it here to foster your online presence. Remember, today’s businesses exist online as one in two Kenyans own a smartphone.
Step 7. Plan For Logistics
Depending on the type of real estate business you start, you might need to hire an assistant and get an office. If this is the case, recruit an experienced professional to avoid taxation issues and to have a physical location clients can visit.
Once everything is set, start selling your services and properties to prospective clients.
Also Read:
- How To Establish a Lucrative Furniture Business In Kenya In 2024
- How to Invest Money Wisely in Kenya 2024 (12 Smart Ideas!)
Ready To Start a Real Estate Business?
Now that you’ve seen real estate business is lucrative will you give it a shot?
To simplify your entry into this industry, start with a business opportunity that aligns with your financial capacity and skillset. Once, you become knowledgeable and gather enough finances, you can invest in the demanding areas.
Need personal financial guidance like budgeting? Don’t hesitate to visit our shop today!
