Factors to be put into consideration before a purchase
Real-Estate in Kenya is a complex sector where each investor is required to carry out Due diligence on the property. It is an enquiry on property investment before making an assurance to approve all evidences and retain an investor’s resources in the midst of making a contract. It is a well-thought-out realistic act of anyone thinking of investing.
In real estate in Kenya, due diligence is well-defined as a buyer’s responsibility to do a research on the property in Kenya to govern whether he/she is contented. During this passé, the buyer presides a detailed investigation on the state of the property and the economic feasibility of obtaining the property in Kenya. If the buyer finds faults in the property in the middle of the process, he/she is permitted to call off the acquisition of the property in Kenya due to sub-standard results.
Key things to consider during the due diligence process
- Establish the Market Equilibrium
The Real Estate market in Kenya affects the pricing strategy in Kenya. High demand for property with less supply of quality property in Kenya, makes prices of the property to rise and vice versa. Nevertheless, large supply of property with high demand deciphers to higher pricing. This attracts an equilibrium in the real estate market in Kenya hence standardized prices to acquire the property.
Understanding the market ascertains you are not overpriced on the property. Example having ample information of over-supply of bungalows in a certain location, will contribute to good bargain on a bigger property than anticipated.
- Conduct a review on the Property
Being upfront on what you want, when it comes to real estate in Kenya means acquiring nice cozy home.; “do not make pay for a property that you have not seen”. Swindlers and Fraudsters are ubiquitously aiming for who to rip-off, and assuming the effort you made to save enough to buy your own property, be on the look-out on who you engage with when making a purchase.
After approving that a property is real, scrutinize for any faulty from top to bottom. Renovating a property is a huge engagement; get evaluations and estimates for work before purchase if you decide to purchase a property with faultiness. Hire a home inspector for professional consultancy and also acquire a second/ third opinion.
3. Assess & Valuate the Property
Estimate the value of the property as well as the market value for the property. Evaluation, on the other hand, is done to establish “exactly how much a property is worth”. Property appraisal and valuation are necessities for successful real estate purchase. A valuation report includes; location, legal description, value, improvements, land and information on comparative sales in the area. The information will aid in reviewing the future performance of your property in Kenya.
4. Examine Sales Agreement and the Title Deed
Find the legal ownership of property. An already existing property in Kenya must have a public record to show ownership. To enable this, do a title deed search at the Lands Registry, Ardhi House if in Kenya to avoid future conflicts. Hire a conveyance lawyer to help with the Purchasing process.
5. Check for Government Regulations/Zoning Issues
Be on the look-out for things that can affect the property in the near future. Issues such as the impact of natural disasters on the property; floods, lightning, volcanos or earthquakes. Be well conversant with National Construction Authority Act (NCA) to avoid purchasing property that will eventually get the big ‘X’ sign for demolition after investing all your savings into it.
Investing in real estate in Kenya, ensure you acquire an asset that is worth your pay, given risk-inherent features associated within real estate. A good practice is to have due diligence to guide you through the purchase process.