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.

Top 5 Reasons To Sell Your House To A Real Estate Investor

You are probably wondering why you would want to sell your house to a real estate investor instead of listing your house with a realtor or selling it yourself. There are many very good reasons that you should consider selling to a real estate investor. I will share with you some different options that you probably have never even thought of before, or knew that you could do. I am going to give you the top 5 reasons why you should consider selling your house to a real estate investor.

1) A real estate investor will buy your house from you no matter what condition your houses are in. What this means to you is that you will not have to make any costly repairs to your house. Now if you listed your house with a realtor they are going to want you to make all the necessary repairs to your house before they will list it. The other reason is that most lenders in today’s market will not lend money to buyers that are buying a house that needs major repairs. Now second of all, if you try to sell your house yourself you will still need to possibly change your flooring and repaint your walls. Most buyers in today’s market will not want to move into a home and start making repairs. Therefore you will have a limited number of buyers that might show interest in your house but, they will want to get your house at a large discount.

2) Real estate investors will buy your house for all cash “as-is”, or they can give you up to full market value for your house if you are a little flexible on your terms. A real estate investor will work with you to find out all of your goals for selling your house. Then they will do their best to meet or exceed all of your goals for selling your home. They are professional home buyers helping people solve their real estate problems. They have a lot of experience buying houses from people just like you in all different types of situations. Just to name some of the situations they can help you with are: if your house is just not selling in today’s market, inherited homes, distressed property, vacant homes, probate houses, behind on payments, divorce, house liens and judgments, rental property, expired realtor listing, bankruptcy or if you are just facing foreclosure. No matter what the condition, area, or situation you have with your house a real estate investor can give you many viable options to sell your house fast.

3) If you sell your house to a real estate investor they can close on your house fast usually in 10 days or less. You will be able to get cash in your hand quickly without any of the hassles of selling your house the traditional way. Real estate investors are professionals with lots of experience in helping homeowners walk through the process of selling their house fast. The reason they are able to close quickly on your home is that they work with a large network of buyers that have cash and are ready to buy houses in your area fast. This is not like a traditional buyer that you will get from selling your house yourself or from a realtor. These types of buyers will take at least 30-60 days to close and that would be only if they make it through the loan process.

4) Real estate investors don’t want to list your house they want to buy your house fast. When you sell your house to a real estate investor they will market your house to their buyers at hyper speed. By this I mean if you sold your house yourself you would probably put a sign in front of your house, put an ad in the newspaper or you might even list your house on the MLS for a flat fee. These things are good but at best you will probably only get a small amount of people coming to look at your house but, most of them will be tire kickers. In today’s market there are more houses for sale then there are people to buy them all. The same goes if you were to list your house with a realtor; they will put a sign in your yard, list it on the MLS and wait for people to call. Most realtors don’t continually market your property through other avenues past that. A real estate investor will market your property immediately after you agree on price and terms. They will market your house with all available advertising to get your house sold fast Plus they have a huge list of buyers who are currently buying houses and have the cash to do it fast. Therefore selling to a real estate investor is your best option if you want to sell your house fast in today’s market.

5) When you sell your house to a real estate investor you will not have to pay anything out of your pocket. In fact they work hard for you and with you to get your house sold with no cost to you and very fast. The reason they can do this is that they actually get a fee from the buyer they sell the property to therefore eliminating any costs at all to you the seller. Not to mention real estate investors will give you a net offer on your house. What this means to you is that you will receive that net offer at closing. Now if you sold your house the traditional way buy yourself or through realtor you will only net at closing on average of 80-85% of the listing price of your home. The reason this is true is that you realtor will take their 6% commissions, then you will have to pay losing costs of 2-3%, then the buyer will want a discount of at least 5% in today’s market. After all of those discounts the buyer will have a property inspection of your house done and the inspector will come back with a big list of possible problems which the buyer will want a discount on. This is usually another 3-5% off. most sellers do not realize that this is actually the amount of money that they will net at closing, after they have waited 4-8 months through this whole process to sell their home the traditional way.

As you have probably realized by now there’s a lot more benefits to selling your house to a real estate investor verses selling your house the traditional way of for sale by owner or with realtor. Is your time and money really worth all the hassles and aggravation of selling your house the traditional way? If you sell your house to a real estate investor you will have a fast, friendly, hassle free sale of your house

3 Of The Top 9 Reasons That The Real Estate Bubble Is Bursting

If you own real estate or are thinking of buying real estate then you better pay attention, because this could be the most important message you receive this year regarding real estate and your financial future.

The last five years have seen explosive growth in the real estate market and as a result many people believe that real estate is the safest investment you can make. Well, that is no longer true. Rapidly increasing real estate prices have caused the real estate market to be at price levels never before seen in history when adjusted for inflation! The growing number of people concerned about the real estate bubble means there are less available real estate buyers. Fewer buyers mean that prices are coming down.

On May 4, 2006, Federal Reserve Board Governor Susan Blies stated that “Housing has really sort of peaked”. This follows on the heels of the new Fed Chairman Ben Bernanke saying that he was concerned that the “softening” of the real estate market would hurt the economy. And former Fed Chairman Alan Greenspan previously described the real estate market as frothy. All of these top financial experts agree that there is already a viable downturn in the market, so clearly there is a need to know the reasons behind this change.

3 of the top 9 reasons that the real estate bubble will burst include:

1. Interest rates are rising – foreclosures are up 72%!

2. First time homebuyers are priced out of the market – the real estate market is a pyramid and the base is crumbling

3. The psychology of the market has changed so that now people are afraid of the bubble bursting – the mania over real estate is over!

The first reason that the real estate bubble is bursting is rising interest rates. Under Alan Greenspan, interest rates were at historic lows from June 2003 to June 2004. These low interest rates allowed people to buy homes that were more expensive then what they could normally afford but at the same monthly cost, essentially creating “free money”. However, the time of low interest rates has ended as interest rates have been rising and will continue to rise further. Interest rates must rise to combat inflation, partly due to high gasoline and food costs. Higher interest rates make owning a home more expensive, thus driving existing home values down.

Higher interest rates are also affecting people who bought adjustable mortgages (ARMs). Adjustable mortgages have very low interest rates and low monthly payments for the first two to three years but afterwards the low interest rate disappears and the monthly mortgage payment jumps dramatically. As a result of adjustable mortgage rate resets, home foreclosures for the 1st quarter of 2006 are up 72% over the 1st quarter of 2005.

The foreclosure situation will only worsen as interest rates continue to rise and more adjustable mortgage payments are adjusted to a higher interest rate and higher mortgage payment. Moody’s stated that 25% of all outstanding mortgages are coming up for interest rate resets during 2006 and 2007. That is $2 trillion of U.S. mortgage debt! When the payments increase, it will be quite a hit to the pocketbook. A study done by one of the country’s largest title insurers concluded that 1.4 million households will face a payment jump of 50% or more once the introductory payment period is over.

The second reason that the real estate bubble is bursting is that new homebuyers are no longer able to buy homes due to high prices and higher interest rates. The real estate market is basically a pyramid scheme and as long as the number of buyers is growing everything is fine. As homes are bought by first time home buyers at the bottom of the pyramid, the new money for that $100,000.00 home goes all the way up the pyramid to the seller and buyer of a $1,000,000.00 home as people sell one home and buy a more expensive home. This double-edged sword of high real estate prices and higher interest rates has priced many new buyers out of the market, and now we are starting to feel the effects on the overall real estate market. Sales are slowing and inventories of homes available for sale are rising quickly. The latest report on the housing market showed new home sales fell 10.5% for February 2006. This is the largest one-month drop in nine years.

The third reason that the real estate bubble is bursting is that the psychology of the real estate market has changed. For the last five years the real estate market has risen dramatically and if you bought real estate you more than likely made money. This positive return for so many investors fueled the market higher as more people saw this and decided to also invest in real estate before they ‘missed out’.

The psychology of any bubble market, whether we are talking about the stock market or the real estate market is known as ‘herd mentality’, where everyone follows the herd. This herd mentality is at the heart of any bubble and it has happened numerous times in the past including during the US stock market bubble of the late 1990’s, the Japanese real estate bubble of the 1980’s, and even as far back as the US railroad bubble of the 1870’s. The herd mentality had completely taken over the real estate market until recently.

The bubble continues to rise as long as there is a “greater fool” to buy at a higher price. As there are less and less “greater fools” available or willing to buy homes, the mania disappears. When the hysteria passes, the excessive inventory that was built during the boom time causes prices to plummet. This is true for all three of the historical bubbles mentioned above and many other historical examples. Also of importance to note is that when all three of these historical bubbles burst the US was thrown into recession.

With the changing in mindset related to the real estate market, investors and speculators are getting scared that they will be left holding real estate that will lose money. As a result, not only are they buying less real estate, but they are simultaneously selling their investment properties as well. This is producing huge numbers of homes available for sale on the market at the same time that record new home construction floods the market. These two increasing supply forces, the increasing supply of existing homes for sale coupled with the increasing supply of new homes for sale will further exacerbate the problem and drive all real estate values down.

A recent survey showed that 7 out of 10 people think the real estate bubble will burst before April 2007. This change in the market psychology from ‘must own real estate at any cost’ to a healthy concern that real estate is overpriced is causing the end of the real estate market boom.

The aftershock of the bubble bursting will be enormous and it will affect the global economy tremendously. Billionaire investor George Soros has said that in 2007 the US will be in recession and I agree with him. I think we will be in a recession because as the real estate bubble bursts, jobs will be lost, Americans will no longer be able to cash out money from their homes, and the entire economy will slow down dramatically thus leading to recession.

In conclusion, the three reasons the real estate bubble is bursting are higher interest rates; first-time buyers being priced out of the market; and the psychology about the real estate market is changing. The recently published eBook “How To Prosper In The Changing Real Estate Market. Protect Yourself From The Bubble Now!” discusses these items in more detail.