Real estate is one of the ancient and most widespread sector. Most new investors in real estate have limited idea, nonetheless what they don’t know is the different types of real estate investments that exist in Kenya.
It drives that for each type of real estate in Kenya investment it has its prospective advantages and limitations including irreplaceable flukes in cash flow sequences, loaning conducts, and principles of what is considered suitable or ordinary.
In quest for financial independence and passive income, I’d like to march you through some of the different kinds of real estate investments to get ample knowledge on them. If you’re intent on developing, acquiring, or owning, or flipping real estate, you can better come to an understanding of the peculiarities of what you’re facing by dividing the real estate into several categories.
1. Residential Property
Residential structures are properties such as houses, apartment buildings, townhouses, designated for single family homes and multi-family residential where a person or family pays you to live in the property. Real Estate in Kenya in cities is in leasehold of 99 years, while outside the city land is freehold.
2. Commercial Property
Commercial property in Kenya is used for business activities, or land that is intended to generate a profit, as well as larger residential rental properties. Commercial property consists mostly of things like office buildings and skyscrapers that are leased out to companies and business owners who pay rent to use the property. This leads to better stability in cash flow, and even protect the owner when rental rates decline, but if the market heats up and rental rates increase substantially over a short period of time, it may not be possible to participate.
3. Industrial Property
Industrial property is used for industrial purposes such as factories, commercial establishments, manufacturing plants, public utilities, warehousing and stockpiling of raw materials. They are different types of industrial property in Real Estate :
- Factory-office multiuse property
- Factory-warehouse multiuse property
- Heavy manufacturing buildings
- Industrial parks
- Light manufacturing buildings
- Research and development parks
4. Retail Property
Retail properties consist of shopping malls, strip malls, and other retail storefronts. In some cases, the landlord also receives a percentage of sales generated by the tenant store in addition to a base rent to incentivize them to keep the property in top-notch condition.
5. Mixed-use Property
It is a term used in two related concepts: Mixed-use zoning and Mixed-use complex. It is a type of urban development that blends residential, commercial, cultural, institutional or entertainment uses into one space, where those functions are to some degree physically and functionally integrated and that provides pedestrian connections. Mixed-use complex is a development, a building, complex of buildings that is developed for mixed use by a private developer or those that combine any of the above categories into a single project.
There is no such thing as property psychic and while there are tried and true methods to research, no one can make guarantees. Understanding your tolerance of risks will help you shape how much you,re willing to take on over the shorter and longer term. Its important to seek professional guidance from an established and reliable real estate agent such as Commercial Property Kenya who will offer all the required information on how to invest and the process involved.