- Buying vacant land is indeed more affordable than buying land in Kenya that has already been developed, some which has buildings, or structures on it. In this case you buy structures, which sometimes you do not need, or worse still some developers inflate prices making homes on sale in Kenya pricey.
Over years in Kenya land have been used as a store of value. Many Kenyans have been buying different parcels of land in Kenya at different strategic places, some to develop and others to sell at a higher price at a later date.
The business has attracted many players; some genuine and others scandalous where unsuspecting Kenyans have been conned millions of hard-earned money. (Property for sale in Kenya)
Many cases have escalated to courts, but if the processes of acquisition were fraudulent the courts have no option, but to rule in favor of the rightful owners and conned Kenyans have nothing else to do, but to lose properties worth Millions of Kenya Shillings.
The con-artists and land cartels have even been selling vacant government land to unsuspecting Kenyans and have even in some cases been collaborating with officials in the Ministry of Land to con fellow citizens.
In the recent past, despite the preference of Corona-virus pandemic government had to evict land owners in Ruai and Kariobangi. Civil societies in collaboration with the evicted Kenyans protested the move but the government could hear none.
The government insisted that the property was public, and the government had to do all it can to protect land encroachment in the interest of all Kenyans.
This made us seek clarification from one investor who has been selling land over years to find out why many Kenyans opt to buy vacant land and to establish the legal procedures that Kenyans should follow when acquiring this precious commodity.
We spoke to Kennedy Murimi CEO of the much coveted Denver Group Limited that has operated for years.
Mr. Murimi started by highlighting some of the advantages of investing in vacant land as well as property development in Kenya.
According to Mr. Murimi some of the benefits of investing in vacant land and why it’s one of the most worthwhile investments right now are:
It’s a Tangible Asset
The term “tangible asset” meaning that it is material and physically existence (one can touch, see, feel it, and even use it). There is a sense of comfort in knowing that you are investing in something that physically exists.
Buying vacant land is indeed more affordable than buying land that already been developed, some which has buildings, or structures on it. In this case you buy structures which sometimes you do not need or worse still some developers inflate prices.
These high property prices, especially in major cities, can be a real financial struggle for property buyers.
Also, the insurance rates and property taxes when buying vacant land are much lower than when you purchase property.
Little to No Maintenance
Investing in vacant land is a hands-off, long-term investment as it doesn’t take up much of your time and effort. It is an excellent investment for those people who want less stress in life.
A Significant Income Opportunity with Seller Financing
Banks are not game when it comes to lending money on vacant land. You can turn this scarcity of financing when it comes to land purchase to your advantage.
For instance, you can add seller financing when selling your vacant land for a more income opportunity. The seller financing will help you attract more buyers that will pay your interest rate charge, even if your rates are higher than the market.
When it comes to vacant land, you can more, or less expect that it will not stay in the same condition as you purchased it. In most cases it rises in prices even with little to no development. Many speculative investors in opt to buy land in less developed areas at a low price and sell it at a triple or more when development in adjacent lands or area set in.
For instance, those who bought land along Kangundo road, Southern and Northern by-pass before they were constructed bought an acre at prices ranging from 30,000 to 100,000 Kenya Shillings and when the roads were constructed in less than a decade they sub-divided the lands into 50 x 100 plots, which they sold at 100,000 Kenya Shillings each.
“Currently owning the same piece of land (50 x 100) plot in the aforementioned places cost you between 2-4 Millions. This was occasioned by the development made by investors where the road infrastructure was constructed, Mr. Murimi said.
Much Less Competition
Real estate investors overlook the smaller amount of competition in vacant land investing. They often go putting their money in commercial properties, houses, and apartments, where they may find themselves overpaying for properties due to the competition to acquire properties.
The case is different for vacant land, and Mr. Murimi advises investors to be strategic and go for the less competitive vacant lands as they offer better deals and significant returns on investments.
Mr. Murimi advises Kenyans not to overlook the benefits offered by investing in vacant land as many see it as undesirable asset class. He confers that enormous advantage that cannot be found in other real estate investments lies in vacant land investment.
We requested Mr. Murimi to briefly highlight the legal steps that one need to follow when acquiring land in Kenya, which he gracious did.
- Searches and inspection of the title
- Preparation of offers and price negotiation
- Sale agreement and deposit payment
- Payment of land rates
- Transfer documents and consent to the transfer
- Payment of Stamp Duty
- Registration of transfer
Source: Mount Kenya Times