A Comprehensive Guide: Pros ,Cons and Tips
Introduction.
Did you know that majority of Kenyans dream of owning a home, but only a fraction know whether to build or buy. So should you build or buy a home in Kenya? With rising property prices and options such as the government’s Affordable Housing Project in Kenya, both options have their own advantages and challenges, and the right choice depends on several factors, such as your budget, preferred location, and long-term goals.
In this article, we’ll break down the pros and cons of building vs buying a home in Kenya, so you can make an informed decision that works best for you and your future.
The Pros vs Cons.
| Description | Building a Home in Kenya | Buying a Home in Kenya |
| Pros and Cons of Building vs. Buying a Home in Kenya: | ||
| Customization | 1. Full control over design and layout. 2. Can accommodate future needs (e.g., extra rooms). 3. Incorporate sustainable features e.g. energy-saving features to lower costs in the long run. | 1. Limited customization. 2. Stuck with existing design. 3. Compromise on Features like the size of the backyard. |
| Financial Aspects of Owning a Home in Kenya | 1. Less upkeep for Quality Materials. 2. Can appreciate its value. 3. Land Value Consideration. 4. Lenders may see this as less risky because you can make adjustments to keep costs down, compared to buying an already-built house where the price is fixed. | 1. Predictable upfront costs. 2. Older houses tend to need more upkeep, such as fixing leaks and repainting. 3. Financing can be difficult. |
| Equity & Value Growth | 1. Directly increase equity as you build. 2. Potential for land appreciation in developing areas. | 1. Property value may increase over time in established neighborhoods. 2. Market risks may affect value. |
| Location Flexibility | 1. Freedom to build your home in a serene, less crowded area. 2. Building Lets you design a home that fits your lifestyle perfectly. 3. Lack of essential infrastructure like access to clean water, electricity, or paved roads. | 1. Less Flexibility in Location. 2. Difficulty in finding a home that meets your needs. 3. Challenge in finding your preferred neighborhood for the right price. 4. Access to already established amenities. |
| Quality Control | 1. You can monitor construction and ensure high-quality materials are used. 2. You avoid inheriting hidden issues like structural issues from a previous owner. 3. Design your house just how you want it. 4. Finding Reliable Contractors can be a challenge. | 1.No control over materials used. 2. Buying Older houses tend to need more upkeep, such as fixing leaks, repainting, or replacing old systems. |
| High Initial Costs | 1. Buying land and building materials can be expensive. 2. Land prices vary greatly depending on location. 3. Unexpected expenses may arise during construction. | 1. Buying a Home Requires large deposits and high mortgage rates. 2. Predictable Costs: The cost of the house is clearly set, so you know exactly how much you need to pay, avoiding unexpected costs. |
| Timelines | 1.Flexible construction phasing. 2. Delays due to weather, permits, or contractor issues are common. 3. Construction Timeline can take several months to even years, depending on the complexity of the build. | 1. Immediate Move-In. 2. Finding a suitable property can take time. |
| Stress & Responsibility | 1. Construction process can be stressful. 2. Requires time and energy to monitor progress. | 1. No stress of planning or hiring contractors. 2. No waiting for permits or construction. |
| Property Market Risks of Owning a Home in Kenya. | 1. Resale may be harder in less-developed areas or if the design doesn’t appeal to buyers. 2. High Demand in Desirable Locations. 3. A well-designed, custom-built home with modern features can be more appealing to buyers in the future. | 1. Easier to resell in established neighborhoods. 2.Market risks may affect value. |
| Land Ownership Challenges in Kenya | 1. Fake or incomplete titles, which can lead to legal disputes. 2. Absolute ownership with full control. 3. You are not obligated to pay regular service charges or levies. 4. You have greater flexibility in how you use your property | 1. Shared ownership in sectional titles. 2. You own your individual unit, but you also share ownership of common areas. 3. You’ll be required to pay service charges or levies to cover maintenance costs, which can fluctuate. 4. Management by-laws can restrict certain activities, such as pet ownership, noise levels, or modifications to your unit’s exterior. |
Expert Tips
Building or buying a home in Kenya is an exciting journey, but it requires careful planning and research.It’s essential to make informed decisions to avoid common pitfalls. By following expert tips and seeking guidance from trusted professionals, you can navigate the process with confidence, ensuring that your home aligns with your goals. Whether it’s your forever home or an investment property, take your time, ask questions, and work with trusted professionals to make your dream a reality.
Here are some of the tips that can equip you to make better decisions.
1. Know your Budget.
- Before you start, figure out how much you can afford.
- If you’re building, get a clear estimate of construction costs.
- If you’re buying, ensure the property price fits your budget.
- Don’t forget to account for extra expenses like legal fees, taxes, stamp duty, and ongoing maintenance.
- For a mortgage, shop around for the best deal. Compare interest rates, repayment terms, and eligibility requirements from banks like KCB, Housing Finance, or Co-operative Bank.
- If you’re building, some banks also offer construction loans, which can be helpful.
2. Pick the Right Location
- Look for areas with potential for growth,places where property values are likely to increase over time.
- Research the safety and security of the neighborhood.
- Think about your daily needs too. Is the area close to schools, hospitals, markets, and public transport?
3. Understand the Legal Side
- If you’re buying land, make sure it has a clear title deed (freehold or leasehold) from the Lands Registry.
- Visit the Ministry of Lands, use the eCitizen portal or Arthisasa platform to verify ownership and ensure the land is genuine.
- For construction, you’ll need approvals from the county government, the National Construction Authority (NCA), and the National Environment Management Authority (NEMA).
- Your design must also meet Kenya’s building codes and zoning regulations.
- Always have written contracts with sellers, contractors, or suppliers to protect yourself.
4. Do Your Homework
- If you’re buying an existing home, inspect it thoroughly.
- Check the quality of construction, plumbing, electrical systems, and roofing.
- Compare prices of similar properties in the area to ensure you’re getting a fair deal.
- Don’t be afraid to negotiate the price with the seller or contractor. A little bargaining can save you a lot of money.
5. Work with Professionals
- Hiring qualified professionals to guide you,building or buying a home in Kenya is a team effort.
- An architect to design your home.
- A quantity surveyor to help with cost estimates and budgeting.
- An engineer to ensure the structure is sound and meets building codes.
- A lawyer to handle legal documents and contracts.
- A reputable contractor who is licensed and has a good track record.
6. Explore Financing Options
If you don’t have all the cash upfront, there are several ways to finance your home. Mortgages are a popular option, but you can also look into construction loans from reputable banks or SACCO loans, which often have lower interest rates.
7. Think About the Future
Consider the resale value of the property. Is it in an area where prices are likely to rise? Even if you don’t plan to sell, it’s good to know your investment will grow over time.
8. Stay Involved
- Whether you’re building or buying, stay hands-on.
- If you’re constructing a house, monitor the quality of materials and workmanship.
- Keep communication open with your contractor and other professionals.
- Take your time to make decisions, rushing can lead to costly mistakes.
- Always do thorough research to avoid scams or substandard work.
9. Protect Your Investment
- Once you’ve bought or built your home, protect it.
- Get home insurance to cover risks like fire, theft, or natural disasters.
- Keep all your legal and financial documents in a safe place—you’ll need them if you ever decide to sell or make changes to the property.
By considering these factors, you can make informed decisions whether to buy or build your home in Kenya.
Case studies
- Cytonn high-yield money fund, in Kenya, in 2021 had legal disputes over apartment ownership and issues with a high-yield money fund. They faced financial problems due to their real estate projects and unregulated investments.
- In the case of Greatwall apartments, the developer borrowed 2 billion shillings in 2015 from KCB bank to build 100 apartments; they couldn’t pay back the loan. The bank decided to auction them in 2021 to get their money back. The building company tried to stop the sale in court, but failed.
- In 2023 Machakos High Court ruled that declared their occupation illegal, over fifty residences, along with churches and mosques, were demolished in Athi River, Machakos County. The demolitions, which began on Friday, took place on land belonging to East Africa Portland Cement.
Conclusion
The decision to build or buy a home in Kenya ultimately depends on your priorities, financial situation, and long-term goals.
Choose to Build a home in Kenya if:
- Customization is a priority.
- You’re ready to invest time, energy, and resources into the construction process.
- Maximizing equity growth and benefiting from land appreciation in developing areas appeals to you.
- You want a serene or private location.
- You can handle potential challenges like delays or higher upfront costs
Choose to Buy a home in Kenya if:
- You want to move in immediately without the hassle of construction.
- Predictable costs and a ready-made design suit your needs.
- Living in an established neighborhood with amenities is important.
- You want to avoid the responsibility of managing construction and handling contractors.
Final Recommendation on Building Vs Buying a Home in Kenya
When it comes to securing your dream home in Kenya, one of the most important decisions you’ll face is whether to build from scratch or purchase an existing property. Both options come with their own set of advantages and costs. This is a huge decision that impacts your budget, timeline, and long-term plans.
Building a home in Kenya is often the better option for those seeking complete customization and control over their living space. It allows you to design a home that perfectly fits your needs, whether it’s adding extra rooms or incorporating energy-saving features. Additionally, building a home in Kenya gives you the potential for long-term financial growth through land appreciation and equity, especially in developing areas. As highlighted in our previous blog on the cost of building in Kenya, while the initial investment may be higher, it provides a unique opportunity to manage costs more effectively and make smart, long-term decisions that contribute to the overall value of your property. While it may require more time and upfront investment, building ensures your home is exactly as you envision, and you can avoid hidden issues often found in older properties.
Consider the pros and cons, evaluate your budget and timeline, and make a decision that aligns with your long-term goals for homeownership in Kenya.
Have you built or bought a home in Kenya? What challenges did you face? Contact us for personalized advice or share your thoughts in the comments below!
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