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Three golden tips for first-time land buyers

The big mistakes many people make when buying a plot and how to avoid them

Having been in real estate for four years now, Moses Muriithi, the CEO of Fanaka Real Estate better understands nuts and bolts of land buying in Kenya, especially in Nairobi where finding genuine sellers is about as hard as finding honest lawyers.
Business Today asked Mr Muriithi some of the mistakes that many prospective land buyers, more so first time purchasers, make and he looked at it differently and offered tips on what to consider before purchasing land. It turns out, ignoring these tips often results in these big mistakes.

1. Work with a budget: Gauge your financial muscle and pick what you can afford and whether you can do that on cash or instalments. Many people save up and do a one-off buy while, as it’s done at Fanaka Real Estate, you can put up a deposit and pay up in instalments.

The downside of saving is that by the time you hit your target the value of the property will have risen. What this means is that you should be able to pay for the land without putting too much pressure on your finances. Go for a seller offering competitive prices and flexible payment terms.

2. Identify the area: Location is important as it determines many other things including price, security and distance from key towns and cities. That is transport and communication.

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Source: Business Today

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Why Kenyan Rent Defaulters May Soon Be Blacklisted

Kenyan landlords are pushing for a plan that seeks to have rent defaulters listed with credit reference bureaus (CRBs).

The Urban Landlords and Tenants Association of Kenya (ULTAK) is seeking the Central Bank of Kenya’s authority to implement the proposal.

If CBK approves the request, landlords will liaise with CRBs concerning their tenants’ monthly payments.

ULTAK secretary-general Ephraim Murigo says the plan will ensure tenants who previously defaulted on rent payments find it hard to rent houses in other locations.

Before signing lease agreements, landlords will demand a CRB clearance from those seeking to rent their houses.

“Today, landlords resort to a number of crafty ways like locking up a tenant’s belongings to recover unpaid rent. Once our plan is implemented, it will become difficult for tenants to dodge their responsibilities, and hence landlords will have an easier time,” Says Murigo.

“My association has come up with a formula whereby tenants will stop feeling like defaulting on rent is normal. We have approached credit reference bureaus to partner with them with an aim of listing all tenants who default on rent payment.”

2018 data by Transunion Credit Reference Bureau shows that more than 500,000 Kenyans have been blacklisted and thus cannot access credit facilities.

Source: Mwakilishi

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How to acquire, keep at healthy business lifestyle

Apparently, one of the most talked about the subject today is “a healthy lifestyle.”

It is now in the public domain that lifestyle diseases are killing more people than dreaded diseases like malaria and HIV Aids.

Lifestyle diseases as the name suggests are diseases that are associated with the way people live their lives. They are usually caused by eating habits, smoking, drinking alcohol, lack of physical exercise and stress. They include some types of cancer, diabetes and heart problems.

The good news about lifestyle diseases is that they are non-communicable and can be prevented by choosing a healthy lifestyle.

In business, there also lifestyle problems. Otherwise, how can you explain a business that sells products that are on high demand, has high margins, has many customers, good initial capital but cannot meet its obligations? It is simply the lifestyle of the owners or managers.

If you paid attention you will be disturbed by the high number of business that used to do very well but are struggling or a promising business that suddenly makes an about-turn. Most of these business woes spring from mismanagement or simply a bad lifestyle.

Like a healthy body, if you embraced certain proven healthy business habits, you are sure to succeed in your business.

Let’s look at a few of them.

First, manage your cash flow well. Cash is the most important thing in business. If you mess up cash flow by overcommitting your money, overstocking, overspending, unplanned expansion or taking profits too soon, you will not be able to meet your financial obligations or take advantage of many opportunities that you might often come across.

Second, focus on most important things to avoid spreading yourself too thin or cluttering your mind with unimportant things. Find your niche market, your best customers, your most profitable products and your best strategies that work and focus on them. Prune the rest so that you can be light and productive.

Put up working systems in your office. You need an effective accounting and management software to monitor key things like stock, movement of all resources as well as opportunities. Without a good system that can give you real-time reports, you are exposed to many risks.

Third, keep prospecting to get new customers. Develop your product to suit your prospective customers. You can never rely on your current customers regardless of your level of customer care. Some of them will be grabbed by competitors, some will move or change preferences and others will fade due to natural attrition. The only way to keep growing is to keep prospecting and replacing customers who will nevertheless go away.

Finally, embrace taking good care of employees to attract and retain the best. Companies that have a high turnover always lose.

They lose to their competitors and customer goodwill. Employees are the biggest asset that a business can leverage to grow.

Writer: Mr Kiunga 

Source: Business Daily Africa

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Common Land Investment Myths You Will Be Glad Aren’t True

Most would-be landowners view the process of buying land as a scary venture that is risky to their finances and even life. The horror stories depicting harrowing stories of hapless land buyers duped of their life savings don’t make the situation better. However, with the right information, you can invest in real estate without as much as a scandal or losing sleep. Also, you will discover that most of your unfounded fear is based on misconceptions and myths. We demystify some of the land investment myths you might have heard from others.

Myth 1: Land is land. So, why pay higher for some land?

Land prices differ based on various factors such as the location, size, land rates, land use and other factors. Not all land is the same and you need to have all these considerations in mind as you plan to buy land.

Myth 2: I need a lot of money to invest in land

Your worry as an investor should be on why you need the land and if it will meet your current needs whether you want to build or buy a home. As mentioned above, the price of land is dependent on several factors. So, the size of the land and its location will determine the cost. Also, you can get help financing your land investment in the form of a mortgage.

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Source: BuyRentKenya

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5 Ways to Ease your Home Loan Burden

Many of us have contemplated mortgages. But are you conversant with mortgages? We stumbled on this post and we think it will inform you on how to quite understand mortgages.

Enjoy!

You may have had to take out a home loan to make your home ownership dreams come to fruition. How, though, can you reduce that the financial burden of servicing that loan? What can you do if you wish to help take down the amount that you need to pay at present?

Here are some useful ideas that you should explore to help minimize your home loan burden. They may not all be perfect for you, but each one should provide some much-needed balance.

  1. Balance transfer of loan

Of course, you should first investigate if you can balance transfer what remains of your loan to a different form of payment structure. Consolidation of all of your debt is always a good idea and can be a convenient way to help make a home loan less cumbersome.

Take this into account, as it should go some way to helping you spend less money per month paying off all of your loans. By consolidating it with a balance transfer, you can then make one payment for each of your loans and reduce your admin fees and various other needless extras.

If you wish to make this work to your favor, then you should definitely look to transfer your home loan to a different balance. Now, you can easily keep track of all of your expenditure and know exactly what you are paying on a monthly basis, which is extremely useful.

  1. Pay more than is due

A fine way to help make sure your home loan is less of a kick in the teeth per month is to pay more than the amount that is due. This should help you to make sure that you are repaying more quickly when times are good. It will also help you to vastly reduce the amount of money that you see leaving your account in the first place.

This could help you to increase your home loan without making your life any less affordable. Don’t commit to something that you cannot keep up, though; if your income is flexible, make sure you are paying no more than 35% of your income on debts – including your home loan. When things are going good, though, paying a bit more is something you won’t regret doing.

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Source: Cytonn Blog

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7 Simple Steps to Help You Find a Perfect Rental Property

Before embarking on your search for a new rental home, there are a few steps you need to take for you to find the right home for yourself and or family.

We promise that if you diligently follow these necessary steps, the home you end up with might be even better than what you planned for.

These are the 7 steps to finding your perfect rental home.

  1. What are your needs?

This involves careful consideration of why you are seeking a rental home in the first place. Whether you’re single or have a large family with small children, everyone has different needs and will be looking for something specific to suit their lifestyle.

At this point, you need to consider what the most important aspects are for you when renting. It’s also wise to take note that you might not get exactly what you are looking for. Keeping an open mind is key.

In most cases, you might find a home in a perfect location and size which might just end up being way off your budget. This is why we insist that you need to be flexible and realistic about what you are looking for.

  1. Set a realistic budget

Deciding on a budget goes hand-in-hand with what your needs are.

Consider a family looking for a rental home? The budget will be slightly higher since you would be looking for a 3 or 4 bedroom to cater to your family’s needs. Unlike a single chap looking for a one-bed apartment.

Your needs should inform your budget. Don’t set a budget like that of a single chap if you know you have a family.

  1. Decide on your locations

Although you might have your heart set on a location because are familiar with or you have friends and family living there, it’s always good to keep an open mind and let your budget drive your search. Not the other way around.

  1. Start property viewings

Book site visits with real estate agents. Don’t take their word for the truth. Or what you see on their websites. Make a physical property visit.

Don’t worry if the first property you see isn’t right. Keep making viewing appointments. This whole time we keep insists that you keep an open mind, be alive to the fact that what you’re searching for might not exist.

Go on viewings for a few properties to gauge what’s available and if you find something you really like, don’t waste time, for you might not be the only one keen on that home. The rental market in Nairobi is competitive and chances are it’s already being eyed up by someone else.

  1. Make your best offer

By the time you get to this point, the ball is in your court. When you’ve found a property you like, it’s time to make an offer with the agent. Instantly, if you are sure it is what you want.

We recommend offering as close to the asking price as possible to increase your chances of being able to rent the property. However, this is your decision and you shouldn’t necessarily rule out properties if they’re over your budget.

  1. Pay your deposit and sign the agreement

The process of sorting out your paperwork is simultaneous to paying the deposit and first month’s rent and signing your tenancy agreement. Your real estate agent will guide you on this. That is why we also encourage that you deal with professional real estate companies.

  1. Move into your home

After all these processes are complete, it’s finally time to move in! Congratulations!

The keys for your new rental home will be available on the day your tenancy starts, so make sure you organize any removal companies and transport around when you’re able to collect the keys from your estate agent.

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The Due Diligence Checklist for Home Buyers

Due diligence is an investigation of potential investment prior to making a commitment in order to confirm all facts and keep an investor and his/her resources safe before entering into a transaction. It is considered a reasonable act expected of anyone who is thinking of investing.

In real estate, due diligence is defined as a  buyer’s obligation to do an investigation of the property to determine whether he/she is satisfied.  During this period, the buyer conducts an in-depth analysis of the condition of the property and the feasibility of purchasing the property.

If the buyer finds defects in the property mid-process, he/she is allowed to cancel the purchase of the property due to unsatisfactory results. Below are some key things to consider during the due diligence process;

Find out What the Market Offers

The state of the market usually affects the pricing of property. When there is a high demand for property with a lack of supply of good quality property, then prices of houses tend to rise and vice versa. However, a large supply of housing that is in high demand translates to higher pricing as there might be buyers in the market who are willing to pay whatever it takes to acquire the property.

Knowing what the market offers will ensure that you do not end up paying more than you should. For example, having information like over-supply of office space in certain areas will help someone who wants to buy commercial space get a good bargain on office space.

Inspect the Property

If you want to end up with a nice home, you need to be strategic. The rule of thumb is; “do not make payment for a property that you have not seen”. Fraudsters are everywhere looking for who to con next, and given the sacrifices you have made to save enough to buy your own home, be very careful who you give your money to.

After confirming that a property exists, ensure that you scrutinize it top to bottom looking for issues that would cost you extra money to fix. Renovating property is a huge expense; therefore ensure you get estimates for work before you decide to move forward with the purchase if at all you decide to buy property that has issues to be fixed.

If you are in a position to hire a home inspector to do this the better, if not make sure you do it thoroughly. Having a second or third opinion is highly recommended for this.

Appraise & Valuate Property

An appraisal is an estimate of the value of a property, also defined as the opinion of the market value of a property. A valuation, 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 usually includes details like its location, legal description, value, improvements, land use as well as information on comparative sales in the area. This information will help you review the future performance of your property, therefore lets you know if the particular property is a good investment opportunity or not.

Investigate Title/Transaction Documents

You need to establish legal ownership of property you are buying from someone. For a home that already exists, there has to be a public record showing that the seller of this property has legal ownership. To facilitate this, ensure you do a title search at the Lands Registry, Ardhi House to avoid issues like a long lost aunt claiming ownership of property that you have already paid for.

Such issues are costly to address, and you need to sort them out with the previous owner before you inherit a problem you don’t want to have.

Ensure you hire a conveyance lawyer to facilitate the Purchasing process and draw Agreements based on terms acceptable to both you and the seller.

Check for Government Regulations/Zoning Issues

Check for issues that could have an impact on the property you want to acquire or a building you want to put up. Find out things like whether your home will lie in a flood zone are or if the renovations you plan to do, if any, will cause some environmental hazard to your future neighbours.

Ensure that you are well conversant with National Construction Authority Act (NCA) to avoid buying property that will letter get the big ‘X’ sign for demolition after pouring all your savings into it.

Bottom line, when purchasing real estate, it is up to you to ensure that you get the asset that you are paying for, given the risks involved in real estate purchase could be as high as the perceived benefits. A good practice would then be to have a due diligence checklist to guide you through the process.

Source | Buy Rent Kenya

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Kajiado Governor Lenku Bans Subdivision of Rural Land into ‘Uneconomic’ Units

Hundreds of people may find themselves with worthless titles to pieces of land in Kajiado over the advertisement of “fake” plots for sale in the county, Governor Joseph Ole Lenku has warned.

Mr Lenku, who made the statement over the weekend, also indicated that the county will not be approving the subdivision of any rural land into “uneconomical” pieces.

“Any hawking of quarter-acre pieces of land in the heart of Kajiado is fake and will not be tolerated and that is the official position of the Kajiado County Government,” said Mr Lenku.

By this edict, Mr Ole Lenku will find himself on a collision course with land-buying companies that buy large pieces of land and subdivide it into small portions of up to an eighth and later sell it unsuspecting persons.

Most affected is land in Kajiado West, some parts of Kajiado East and Central.

The County Executive in charge of land, Mr Hamilton Parseina, gave the example of a group ranch in Kajiado West, which was subdivided and members acquired title deeds.

“Other areas in Kajiado West include, Oltinga, Ilnaroj and Saikeri,” he explained.

“In Kajiado East, we have land in Kisaju, Isinya, Mashuru and Kenyawa, while in Kajiado Central we have Matapatato and Ildamat.”

He warned people who are planning to buy land in these areas to do due diligence before forking out their hard-earned money.

“We are not going to do any approvals for whatever kind of development in these areas as it is illegal,” added Mr Parseina.

Welcomes investors

Mr Ole Lenku, however, maintained that the county welcomes investors but that land demarcation plans should be respected.

“We want to make it clear that Kajiado is an investment-friendly county,” he explained.

“We have land for industries, housing, ranching and wildlife. It should strictly be used for what it was intended for. If you find yourself in an area designated for wildlife, do not attempt to make it a human settlement.”

He said that unscrupulous businessmen have colluded with crooked land officials to short-circuit the system.

“Stand warned that if you are trying to split land beyond what the county has zoned for, know that it is an exercise in futility. If you bribed your way to get, we shall right it,” said the governor.

Mr Ole Lenku vowed to preserve the Maasai pastoral way of life.

“We want to also recognise that Kajiado is largely a pastoralist county other than for the designated areas.

“Uneconomic” units

Mr Parseina told the Nation that subdivision of land into “uneconomical units” is unlawful and that the county government has not been involved.

“Most of the land being subdivided is listed as agricultural land. What they are doing is illegal,” he said on phone.

The National Land Commission has expressed support over the move. NLC vice-chair Abigael Mbagaya said the Commission had received hundreds of complaints about plots that are 200 kilometres away from their advertised locations.

“The adverts are misleading. We urge investors to do due diligence with the county government.

Most of the small plots being hawked are unsustainable,” said Mrs Mbagaya

Source | Business Daily

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Ideal areas to live in Nairobi; For different incomes

Housing is one of the most basic human needs besides food, clothing, and education. Ideally, the recommended budgetary allocation for rent is 30% of a household’s income as per the United Nations.

In spite of this, Kenyans spend up to 40% of their household income on rent, according to a research by a local daily. This is attributable to a number of factors such as:

  • Lack of knowledge on the entire market
  • Search for a posh address and
  • A blatant lack of healthy financial skills

To spare ourselves of future financial doom, we should all aim to live within our budgets.

Herein, we look at the average rents and average prices for various areas in Nairobi and its periphery and matching this against the various levels of income groups we have locally.

According to the Economic survey 2017 by the Kenya National Bureau of Statistics, the lower income group comprises households with a monthly income of Kshs 23,670 and below; while middle-income group comprises households with incomes ranging between Kshs 23,671 and Kshs 119,999 and finally the Upper-income group enjoys remunerations of above Kshs 120,000.

The table below shows the modal rents and prices for the high end, middle end and lower middle areas.

Read more here