How to invest in real estate in Kenya
Are you thinking of entering the real estate field and starting a career as an investor? are you looking on how to invest in real estate in Kenya? That’s great, real estate investing requires determination and focus. Real estate can be a tremendous investment opportunity. If you are new to real estate, you are probably eager to jump into the business and earn from it as you progress. Investing in real estate is a huge step if done right real estate investing can be lucrative. It is one of the best ways to become wealthy, however it has its pros and cons as it can be a challenging business.
Real estate investing can help diversify your existing investment portfolio and can be an additional income stream. Most new investors do not know where exactly to invest in real estate. However, the encouraging fact about investing in real estate is once you get started you can easily overcome the challenges and become successful.
If you are thinking about investing in real estate, here are 7 ways to help you get off a great start:
1. Do your research
The first step as a real estate investor is learning the ins and outs of the business. Having sufficient knowledge can result in success in the long term as you progress. Before you invest it is important to know the reason you are investing and figure out the goal of your investment. Develop a strategy and establish criteria that will assist you determine if the investment property satisfies your needs. You will want to learn as much as you can about real estate investing and rental property management. Before you purchase your first investment you need to understand your finance options, available properties for investors, housing market and risks involved in investing. There are different strategies for beginners that can prove to be successful.
As a new or first-time investor one of the first things you will learn is the importance of location in the real estate business. However, be careful that you are not limiting yourself as your location will basically determine the level of your investment’s success. You will be able to take advantage of up-and-coming markets when you open yourself to the possibility of investing outside your local area, as the investment property may have better opportunities. The current market trends, real estate appreciation rate, property prices, rental rates, mortgage rates, population growth, tenant occupancy, construction and opportunity for development are some of the features to look for when deciding to invest in real estate.
3. Get your finance in order
Before taking any further action you need to ensure that you are in a capacity to invest. Evaluate your current financial situation and make sure that you put yourself in a stronger position to invest. It is important to improve your credit score and also make sure that you pay all your debts with high-interest rates. A lot of investors decide to invest in the real estate sector in order to gain profits and create a passive stream of income. Make sure your business is insured to prevent future risks and avoid huge losses.
4. Conduct a market analysis
Conducting a rental market analysis is important if you are investing in rental properties. Before you commit to a property it is important to know exactly what type of return you are looking for. You need to do a rental market analysis (RMA) in order to find out whether your rental property is profitable. This will help you assess if the entire area is favourable for rental property investment. It also ensures that the property investment earns you a high rental income to cover the rental expenses and increase your profit margin. If the rental market analysis is positive then the investment should yield positive cash flow.
5. Hire professionals
Securing a mentor is one of the best things that you can do if you are new or first-timer in the world of investing. It is important to consider partnering with someone who may be able to give professional advice in real estate investing if you are not sure of where to start. As a property investor you need the services of a lawyer and accountant. This will help you understand legal requirements and keep track of your finances. You will also be required to hire a reliable working crew to handle maintenance and fix any problems.
You can also start your own network of contacts.
6. Finding the right investment property
Your investment strategy and planned budget determine the type of property you are looking for. You need to put in mind that not every property you find qualifies for a profitable investment. An investment property analysis will help you choose wisely and purchase the right property. This will assist you to calculate and evaluate the return on investment of the property you decide to acquire. You can also do research that will show you property listings that match with the type of investment property you are looking for.
7. Investment strategy
There are different ways you can increase your profit in real estate. You can purchase property and rent it out traditionally or as a vacation home rental to short-term guests. You can implement the buy-and-hold strategy or you could go for a fix-and-flip. There are also strategies you can use without having to purchase properties such as real estate investment trusts (REITs), wholesaling and renovating your own home residence. You need to focus on the strategy you choose in order to profit from real estate.
Understanding a specific investment strategy is essential to long-term success and growth in your real estate portfolio.
Like all investment decisions, the best real estate investments are the ones that best serve you. Being informed can help you ensure that you are getting off to the best start possible. Take action and do your due diligence. Use your options wisely and you will find that you can succeed as a first-time real estate investor.