Kenya Real Estate – Top 6 Things to Consider Before You Buy a Piece of Land

Kenya real estate investment offers you numerous options. Buying land is one of the, Here are some factors that you need to look into before you buy Land in Kenya.

Developmental Outlook:

Are you buying land for residential or commercial purposes? Do you want to build your home, flats to rent or shops to let? Your answer to these questions may determine the location of the land you should buy. For instance, if you want to build flats to let, consider areas with close local facilities such as supermarkets, schools and health care facilities. Many families prefer to live only a couple of miles from their children’s school. This will therefore affect where they rent a house.

Location:

You have heard it before – location, location, location. It affects price considerable. Half an acre of land may cost 10 times more in Runda compared to Embakasi area. However, Embakasi is closer to the airport compared to Runda. The location of the land you wish to purchase should indeed conform to your Kenya real estate development objectives.

Distance from the Main Road:

The further out you go from the main road, the cheaper the parcel of land. However, security may also be compromised. If you are buying land with the objective of building rental property, you may have to contend with lesser amount of rental income if you build far out from the main road. I was looking for a house to rent recently and I settled for a smaller property that was closer to the main road rather than a bigger one further out.

Access to Water, Electricity and Telephone Lines:

Some Kenya real estate areas such as Kitengela are not very developed and may lack electricity and telephone lines as well as piped water. Lack of these facilities makes the land cheaper though, but at what cost. My mum bought a couple of acres in Kitengela and had to sink her own borehole and pump water into the house. She also had to apply for electricity from Kenya Power and Lighting Company. Luckily for her, it turned out to be a hassle free process. It is cheaper to buy land in such areas but you must be prepared to bear the extra costs and delays. Sometimes, like in my mum’s case, it proved worthwhile.

Soil Texture:

Well, believe it or not, soil texture does affect Kenya real estate value. Areas with black cotton soil tend to be cheaper as compared to red soil regions. For instance, parts of Mombasa road have black cotton soil and can not be compared to red soil areas such as Karen, Muthaiga or Runda. Soil texture also affects building costs.

Sewer Location:

Some areas have sewer restrictions and thus not suitable for certain types of Kenya real estate development. Developments along the famous Ngong Road have been restricted dues to the overloaded sewer. If you intend to build an apartment complex for sale or to let, you have to check the sewer restrictions as well as other planning restrictions issued by the local council.

With this factors are all put in consideration, purchasing land in Kenya should be smooth sailing.

Real Estate Courses Are Great But Mentoring Is Better

I’ve bought lots of real estate courses in my time some good, some not so good but I always learned a little something from each one. The thing that I notice when talking too many of my students for the first time is that they all say the same thing to me. It goes a little something like this, ” I’ve got a boat load of real estate courses on my shelf that cost me a kazillion dollars and I still haven’t closed a deal” or ” They said that they would help me after I bought the course but the person I talked to at the company seems to know less than I do about lease options”

Here’s the main problem with the real estate course buying student as I see it and it ain’t pretty. It’s called the magic bullet addiction. This lease purchase course will make you rich in 8 hours and the next one will do it 4 hours but wait, this one will do it in 2 hours. It’s an addiction and like all addictions it usually ends in disaster. Now don’t get me wrong I’ve learned a lot from real estate courses I’ve bought over the years but the difference between people like me and those with the addiction is that we’re looking for a little something that might help not the magic bullet to take us to the promise land. News flash, there ain’t no such thing as a magic bullet!

Having said all of the above I’m going to contradict myself and tell you that there is something very close to a magic bullet. It’s called a mentor or if you prefer a coach. Do you know of any big time athlete who doesn’t have a coach? How about great chess players, I bet they have a coach. What about people that join weight loss programs and succeed I’ll bet they had a coach. The thing of it is if you have someone coaching you that know what they are doing you’ll cut your learning curve down drastically and if you listen and learn you’ll succeed.

Now here’s the next problem we have to deal with and this ain’t pretty either. I have no problem with mentors that charge enough to buy a car and some of them are probably worth it. However, I see it another way.

Imagine if you will a mentor that had a financial interest in seeing his student succeed. What if a mentor didn’t get paid until his charge actually completed a rent to own deal and made money. In my world it’s called Earn While You Learn Mentoring and it takes the sticker shock out of mentoring and levels the playing field for students that don’t have enough money to finance a Guru’s next vacation.

Can You Attain Wealth in Real Estate – Those Who Tried Died, What About Now?

Due to the real estate bust and mortgage crisis melt-down the global economic climate was changed forever. Folks lost 40% or more of their equity and those who walked-away or were foreclosed on accelerated the damage to the real estate market. With so many people losing so much money and in this economic meltdown, many do not wish to talk about real estate right now.

If you are someone who does not want to hear about real estate investing right now, that is fine, but maybe you should read up on it a bit. The best time to buy real estate is at the bottom of the market, not the top. So, let me tell you about an interesting book you should own about real estate:

“Absolute Wealth; A Financial Strategy to Last a Lifetime” by Robert Leonetti; edited by Kleine Editorial Services; Published by Big Horn Investments, 2004

This book has advice from a gentleman who had made a fortune in real estate and he explains how he did just that. This is not one of those “get rich quick” books on how to buy up properties by paying off the delinquent property taxes or anything like that, this gentleman is not one of those late-night infomercial kinds that does real estate seminars and sells books, and thus, I am going to recommend this book to you.

I have no connection with this guy, do not know him, do not endorse him, but the information in this book is definitely good common sense with some very smart techniques and strategies that any can use who is interested in getting into real estate. So, please consider it for your personal library and put it on the financial shelf with your other investment books.

Real Estate Appraisal – When and Why You Need It?

A real estate appraisal is an evaluation of a property for assessing its market value, thus helping a person estimate the amount he can pay while buying a property. Moreover, real estate appraisal is important to determine the property tax for which the owner is liable to pay and also for potential sales price, when owner wishes to sell the property.

A report from an appraiser is more detailed when compared to comparative market analysis (CMA) that determines the market value of the property by comparing it with similar properties in the same area. An appraiser is an independent third party who has knowledge about the real estate market. He generally is licensed by the state.

When and why you need real estate appraisal?

Following is the list of reasons for obtaining real estate appraisal:

Selling property

An appraisal of the property is essential to get the correct price when selling your property. This service is performed by your real estate agent/appraiser. The agent first compares your property with other properties in the same area that were sold in past one or two years and that are similar to your property in terms of features, size and condition. The agent then adds or subtracts the value to your property based on the features found in comparables.

Buying property

When planning to buy a home, a property appraisal is very important for getting the real and fair sense of what it actually is worth. In short, an appraisal of the property that you are willing to buy helps in verifying the amount you are agreeing to pay for the property is reasonable or not. Thus, appraisal is an essential condition in the purchase agreement which can either make or break the deal. Yet, property appraisal done once, you are on the way to close the deal successfully.

Refinancing

A lending institution requires a property appraisal when you are planning to refinance your home. If your home does not have enough appraisal value, then the chances of refinancing could scuttle. It is important to prepare your home before refinancing it so that the collateral value offered by the property is justifying the refinanced loan amount you seek.

Home equity Loan

When planning to get a home equity loan, appraisal of your property is again important; especially if the values of the properties in your area have increased. Equity on your home for which you will borrow money is determined based on the current property value. If your property’s value has decreased, then possibly your equity on home has also decreased in value.

Cash or business loan

If you are trying to seek other type of loan for which your property will be your primary source, then you necessarily need to have current valuation of the property to be done by a professional real estate agent/appraiser and put in writing. This written appraisal should be brought when discussing with lenders on the loan.

Tax reassessment

An appraisal is important for determining the property tax. If the value of your property has decreased, then you can get reappraisal for the same. This might lower your annual tax payment.

Thus with real estate appraisal, you will be able to assess the real value of your property and it is an important step in buying, selling or refinancing your property.

6 Commercial Real Estate Myths

There are a number of misconceptions floating around in the market when it comes to commercial real estate and it becomes important to identify them. These misconceptions can deter investment and risk-taking behavior that is required in this market to be a successful investor.

You need considerable funds to start

This is one of the most common misconceptions in the real estate industry, you don’t need to be swimming in funds to invest in your first property. Banks don’t only look at your balance to approve your funding, they look at the potential profits of your deal as well. The more appealing the deal is the more likely you will be to get your funding, however, you don’t need to rely on just your banks there are always private money lenders who’d be willing to help out if you check out.

The numbers are too hard

These days there are plenty of software options in the market to do the legwork for you, you just need to know your figures and the software will compute the rest for you. The rest just boils down to you being able to interpret the figures to make informed decisions when it comes to your real estate needs.

Most commercial properties are advertised

Contrary to popular belief most of the available commercial properties aren’t listed in newspapers nor will you find any bandit signs advertising the properties of your desire. You will need to consult a real estate broker who has considerable contacts among investors and property owners alike to get a comprehensive list of all the available properties in the area of your interest.

Managing commercial property is much more of a hassle than residential property

Managing a property is no joke, but the hitch is that the proceeds with commercial properties is much more than that of residential properties. So one can afford to hire a management service that operates in your stead and takes care of all the management aspects of your property, including using their comprehensive list of vendors.

Good deals are difficult to find

No matter the market situation it will always be possible to find a good deal in the real estate market, there are always certain types of properties and other factors that make this reality a possibility. All this is dependent on you making a reasonable effort to make the deal happen though.

A single agent can fairly represent both sides

An agent will invariably have the interests of the landlord at heart and not the investor or the buyer, the agent will always have vested interests and therefore act as a dual agent in a way. So it’s always better to hire your own agent to represent your interests.

These are some of the common myths surrounding the commercial real estate industry.