Constructing Prosperity: Navigating the Costs of Building Rental Properties in Kenya

Rental properties are a lucrative investment in the Kenyan Market, and a majority of investors don't want to miss out on building a new financial stream in their portfolio.

Embarking on the journey of building a rental property in Kenya involves a careful consideration of various costs. This topic, delves into the detailed breakdown of expenses, from land acquisition to construction and beyond, providing invaluable insights for prospective property developers/investors.

For this blog we will use our very own prime projects Legacy Ridges, Riverline Ridges and Thika Grove Chania, as the location where the projects will be built on.

Explained below are factors and expenses to consider when building rental houses in Kenya.



When undertaking such a project you should ensure you have adequate capital for the expenses associated with it, such as : labour costs,  building materials, and legal fees. It is also important to ensure there is enough money set aside for regular maintenance and upkeep of the property. Additionally, you should ensure that you have enough capital to cover any unexpected costs that may arise.

2.Target Market

Your prospects will determine the type of property options that you will go for to be able to have a return on investment on your capital, as they should have the financial capability to rent the houses with ease.

As you will be able to understand if they are campus students, young families or single people who are starting out in their career.
Their financial  capabilities will also help you in determining the size and type of housing to build. Without undergoing unwanted expenses, will expose you to financial ruin.

It is important to educate yourself on what your potential customers are looking for and ensure your houses meet these needs.

  3. Economic Stability

In a location with  high unemployment and lower income, the rental market is likely to be saturated and the demand for rental housing low. On the other hand, a location with a high employment rate and higher income is likely to experience high demand for rental properties.

It is important to consider the cost of renting in the area where you will be able to get the potential return on investment. Additionally, it is important to research the local market conditions, such as the availability of rental properties and the demand for rental properties.

4. Demand for Rental Houses

You should ensure that the demand for rental houses is high as it will enable you to invest into the type of building you want to build and still be able to generate maximum profit, once tenants move in.

Having done prior research in an area enables you to make sound financial decisions that in turn grow your wealth.

All these features are interconnected, emphasising the importance of considering them together rather than in isolation.
For example, your financial capacity will dictate the choice of location for your housing project, subsequently influencing the type and size of rentals you plan to construct.

Ultimately, keeping your prospective tenants at the forefront of your investment decisions ensures a higher likelihood of financial success and profitability in the long run.

We provide flexible financing solutions for clients looking to embark on rental property development and ownership.

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