5 Things to know as a foreigner before investing in real estate in Kenya

Yes, foreigners can absolutely invest in Kenyan real estate. In fact, Kenya actively encourages foreign direct investment (FDI) in the sector, offering various incentives to make it attractive.

Here's what you need to know about foreigners investing in Kenyan real estate:

Types of ownership:

• Freehold: This applies only to Kenyan citizens or companies wholly owned by Kenyans.
• Leasehold: Foreigners can own property through leasehold agreements for a maximum of 99 years, renewable upon agreement with the landowner.
• Joint ownership: Foreigners can co-own property with Kenyan citizens, with each party's ownership share clearly defined in the title deed.

Acquisition process:

1. Identify and select the property: Work with a reputable real estate agent to find properties that meet your investment goals and budget.
2. Conduct due diligence: This involves verifying the property's ownership, title deed, land use approvals, and any outstanding debts or encumbrances.
3. Negotiate and agree on the purchase price: Once you've selected a property, negotiate a fair price with the seller.
4. Engage a lawyer: A lawyer will help you draft and review the sale agreement, ensuring it protects your interests and complies with Kenyan law.
5. Pay taxes and registration fees: These include stamp duty, land rent, and registration fees.
6. Transfer of ownership: Once all legal requirements are met, the property will be transferred to your name or company.

Benefits of investing in Kenyan real estate:

• Stable and growing economy: Kenya boasts a relatively stable and growing economy, making it an attractive investment destination.
• Strong real estate market: The Kenyan real estate market is experiencing steady growth, offering good returns on investment.
• Diverse property options: There's a wide range of properties to choose from, including apartments, houses, land, commercial buildings, and tourism properties.
• Favorable government policies: The Kenyan government offers various incentives to foreign investors, including tax breaks, exemptions, and streamlined procedures.
• Beautiful and diverse landscapes: Kenya offers stunning natural beauty, from pristine beaches to lush mountains, making it a desirable location for both investment and leisure.

Things to consider before investing:

• Location: The property's location significantly impacts its value and rental potential.
• Title deed: Ensure the title deed is clean and free from any encumbrances.
• Zoning and land use regulations: Understand the property's zoning and land use restrictions to avoid any legal issues.
• Taxes and fees: Be aware of all applicable taxes and fees associated with property ownership.
• Exit strategy: Consider how you will exit your investment when the time comes.

Additional resources:

• Kenya Investment Authority: https://www.invest.go.ke/
• Ministry of Lands and Physical Planning: https://lands.go.ke/
• Kenya National Bureau of Statistics: https://www.knbs.or.ke/
• Association of Real Estate Agents of Kenya: https://www.kprakenya.co.ke/

By carefully considering these factors and doing your due diligence, you can make a successful and profitable investment in Kenyan real estate.