It is much easier for an American to own a home, or to invest in real estate than a Kenyan because of one reason: interest rates. The interest rates here are punitive, making it virtually impossible or borderline hard to use leverage. The fact is, the real estate market is heavily reliant on debt. The interest rate in Kenya is around 14% and that in the USA is around 4%. It makes financial sense for an American investor to make a 20% down payment and finance the remaining 80% at 4% rate p.a. In Kenya, that interest rate is punitive. It doesn’t even make sense to use leverage in Kenya unless you overprice your property significantly to compensate. It is impossible to overprice rent because of market forces. So Kenyan developers who use leverage have only one way to make a return, to sell the overpriced units. This is why anyone who buys those completed units from developers is essentially making a bad investment.
In summary, it is a near impossibility to use leverage when building to rent out in Kenya because you can’t transfer the high cost of capital (14%) to tenants. You can only use leverage if you intend to sell the property, because you can overprice it to compensate for the 14%. The person you sell to is guaranteed to get a bad return on his investment. The renters market in Kenya is more efficient than the buyers market, which is why developers take expensive loans and build for sale to the middle class, not for rent. Until interest rates come down sub-5%, it will never make business sense to take a loan and build for renting out. You will have to buy/build rental property in cash, otherwise you will essentially be working for the bank.
Very true
Another main issue is land prices are way over inflated.
I’ll tell you for free, unless you’re buying property in places like NYC, San Francisco, Seattle, DC/Northern Virginia, such places……property values in the US hardly go up. I find the smart thing is to access the cheap credit here and use that money to buy land in Kenya, where prices go up by 20% per year on average.
You have to understand that America’s population is very low compared to the land mass. The net effect puts a damper on the cost of land.
My concern is cash flow, not building equity hence the focus on building or buying “for rent” not “for sale”. As I said earlier, unless you are taking a loan in Kenya to build for sale, it is unwise to borrow at such prohibitive rates and build/buy for rent.
It’s interesting that you bring up population density. I just looked it up and America has a higher population density than Kenya.
The US has a population density of 33 people per square km versus 69 in Kenya.
https://simple.m.wikipedia.org/wiki/List_of_countries_by_population_density
Hapo I slightly disagree with you. Property values go up, the only challenge is you have to do your homework before you buy. If you buy the biggest and newly updated house on the block, you may never add value. Most people who invest in real estate normally buy distressed property and refinish (it really doesn’t cost that much if you do some of the work yourself or find a trusted contractor). You’ll be surprised at how much difference it makes by just painting a house. There’s money to be made in real estate in all states.
My bad. I used miles in US vs km in Kenya.
Usijaribu to borrow money majuu and investment hia in kenia na property property burst ishaanza office building ziko empty na household prefer to jenga own houses .hizi flats mnaona are mostly corruption money not borrowed fund Kama muzito kama mureithi a former mp amechomeka sembuse sisi
There’s no property bust in Kenya, fact remains you can never, ever go wrong with prime mburotis. Notice I didn’t say you buy apartments or plots in “konza city.”
Therefore my future tenant, shinda hapo ukiimba “bust.” 
Interesting. Here in Kenya I have always thought the cost of credit to be absurdly high. Even with the new law on interest rate caps, bado iko 14% which is still way too high. Before the cap. Banks were operating almost like loansharks.
You seem to be in a perfect position to take advantage of what both countries can offer you given your situation.
I’ve noticed something. People who keep saying there’s a “property bust” coming are the ones who didn’t buy mashamba early on. It’s actually an expression of hope with a few anecdotes of ‘empty malls’ thrown in to buoy their hopeless frustrations. 
An 18 year old KCSE graduate of 2018, who expects to start working at a regular 70k jobo in a few years will never, ever afford property within a 50km radius of CBD. All over the world, the gap between the rich and poor is accelerating at a rate never seen before. Welcome to a brave new universe of “renters for life” and 1% landlords.
This mentality is what drives speculative purchases not real fundamental when thing fall inawachoma proper tembea kileleshwa kilimani na other mtaas your bubble will burst.renting is not bad Bora I have other investment to give me returns higher than my rent am good,hii owning my house mentality is messing people finances proper by taking predatory loans and mortgage
What’s driving property prices out of the middle class grip isn’t speculation but something very real: population. Kenya adds a net of 1.3 million adults every year. Power purchasing may be low but housing demand in the middle-low income category iko …tena sana.
Unasahau kenyan mostly inherit land na kabla uinherit unarent actual land purchaser ni kidogo vis a viz usa hata wewe najua muthee amejenga nyumba kwao before investing elsewhere
Fact,CBD is even a big match,better how many guys can comfortably buy and develop a plot in Ruaka or Kabete? If you have prime property and apartments you will live a comfortable life in your old age.
Ja
Jaribu farming ya ngano or rice flat income ni peanuts to us
That is illegal by law.
Land owners in Westlands will beg to differ.
Virtually all the apartments on General Mathenge, Brookside Drive, Part of Raphta Road, the upper part of Westlands Road and Mogitio Road have a For Sale or a For Rent Sign.
For the Asians who opted to convert their half acre /1 acre plots to residential apartments, they are the only beneficiaries as they bought that land just after independence when it was cheap.That is not the case in most of Westlands where it is people who bought land for 100 million plus to build apartments being rented starting at 30k for a 1 bedroomed apartment(the crappiest part of Westi) to 250 k for akina One West.
Some of those apartments are so empty, they are about to be haunted. On Brookside Drive, where some of the best apartments are, they almost never have full occupancy at any time.
And this was after rents were slashed in parts of the estate, especially in the areas towards Chiromo.
This applies to Commercial buildings too. On Muthithi Road, do you know how many empty commercial buildings are there and they are still building frigging more??
The rents are so high that some people are preferring to rent the old Indian buildings and turning them to offices without building a new building. I saw that on Tausi Road and parts of Raphta Road too.
And guess what, if the CBD gets ANY improvements like improved transportation links, the offices in Westlands, except for corporate headquarters instantly lose value, because most employees are complaining about the long commute to Westlands if they do not have a car and especially if they are from Thika Road or Eastlands and they come by public means. Many small firms are reconsidering relocating outside the CBD unless it is absolutely necessary or the firm pays all of its workers well enough for all of them to afford vehicles.