The real estate market shift to apartments rather than maisonettes was initially attributed to the rise in demand for houses in Nairobi.
Apartments have become more attractive as developers implement more attractive designs and offer increased facilities.
The shift has not affected prices as the quality of a specific development determines what it will fetch.
Nairobi’s real estate has seen rising prices over the past decade and apartments, previously cheaper options, are some of the hottest properties in the city.
The trend is gaining momentum as the middle-class grows and the diaspora population pours money into real estate back home.
Mr George Wambugu, chairman of County Home Developers, an emerging real estate company developing the Sh600 million Runda View Apartments in Ruaka, Kiambu County, has vast experience in the business and shares insights on current trends in the housing market and what investors and buyers should look out for in these shifting sands.
What should one look out for when investing in real estate to get good returns?
The right location. Do not develop on a plot simply because you own it. The location must be ideal for the project and target market.
Do not buy a property just because you like the building. While the quality of the building is important, the location of the property must be either prime or have potential for transformation into a prime location. Getting the location wrong can take your investment down the drain.
Also, have an eye out for opportunity. The greatest real estate investors see what can be and not what is currently. A site might look scruffy and bare, but it is the ability to build the castle in the air that determines the success of the investor.
A real estate investor must be able to take calculated risks.
With many developments coming up, what should a buyer consider before buying a house?
First, decide whether you are buying a house to live in or to let.
A person buying to live in selects a location most convenient for him or her and family, as well as other positive attributes suitable for their specific lifestyle.
For example, a location with proximity to specific schools, hospitals, and the office may be ideal for one buyer regardless of the price.
An investor, on the other hand, should focus more on the rental return and capital gains potential of the property.
Even if the location is not ideal for the specific buyer, what should drive their decision to buy is if it is ideal for potential tenants.
That is the reason you have slum lords living in mansions but investing in mud or iron sheet structures; they are focused on the returns.
What is your experience selling Runda View? Are Kenyans keen on buying good quality homes?
We decided to provide high quality homes because today’s buyers are very discerning and demanding. They are not ready to buy homes that will not improve the quality of their lives.
At the same time, they do not want to pay an arm and a leg to own quality homes.
Most buyers are attracted by the promise of affordable quality. We will, for instance, provide adequate parking, 24-hour back-up security, equipped gym, swimming pool, entertainment area, and borehole, among many other facilities.
Why did County Developers choose Ruaka?
Ruaka is an ideal location for young families. It is located close to many amenities such as schools, shopping malls, hospitals, churches, and key employment centres.
Moreover, with the development of the Eastern by-pass, employment centres further out such as on Thika and Mombasa roads will be very close.
Ruaka is also quickly transforming from an agricultural area into a modern suburb, housing middle- and high-income residents who know the benefits of the location.
This means that there is a strong demand for residential rental space in Ruaka, making it an ideal location.
How long does it take to realise a return on investment?
Real estate development is a long-term capital-intensive investment and real returns are realised anywhere between three to five years, depending on the project.
However, it has been proved that home buyers who invest in the project off-plan usually make higher returns per unit than the developers.