The demand for affordable housing in the Kenyan urban areas continues to increase as development increases. Due to the increase in the population of young people who are just starting out, bedsitters have become the most common go to housing due to it affordable rents, decency and availability. They are a good investment opportunity and a safe bet for those seeking to venture into the real estate market looking for consistent and reliable cashflow. Here’s a step-by-step guide on how to start a successful bedsitter rental business in Kenya.
1. Understand your Market
Before putting your money in, it’s crucial that you understand what the market needs. By conducting market research you get to understand the demand, the trends and establish what your target market is and its location. Here are some of the common items to look at;
- Best locations – Popular areas include Nairobi, Kisumu, Mombasa, Eldoret, and Nakuru, especially near universities, business hubs, and residential estates. It’s easier to get land on the periphery of these cities and the residents can commute into the towns for work.
- Pricing trends – Analyze rental costs in different locations to ensure profitability. If you can get at least 10,000 per unit for a bedsitter, it is likely that there exists sufficient demand for your units. Check that this math works out before investing by trying to calculate your breakeven period.
- Target tenants – Bedsitters mostly attract students, young professionals, and low-income earners. Make sure that your locations has a good supply of this group of people to ensure demand.
2. Location, Location, Location
Get into the mind of the people you would like to attract to your homes. Is the location you have chosen safe for them to stay in? Does it have reliable transport and infrastructure? Paved roads are always a benefit because most people do not have access to cars at this stage. Is it close to schools, shopping centres and workplaces? And lastly, how affordable is it to live in the area?
3. Let there be land
Acquisition of land or property is the next critical part of this puzzle. If you would like the asy way out, one can always buy already existing property. If interested in buying, let us know and we can help with that. If interested in building, you can either buy land or if the land is unavailable or too expensive, you can lease it for a specific period.
If building, you need to: :
– Work with professionals (architects, contractors) to create cost-efficient designs.
– Get necessary approvals from local authorities and meet building standards.
– Optimize space to accommodate multiple units for maximum returns.
4. It costs money!
Based on the costs established, you need to secure funding for the project. You need the money for land purchase or property acquisition, construction, legal fees, taxes and documentation and finally marketing and property management. There are different sources of funding thet can be used and these include personal savings, bank loans, sacco loans and even partnerships with other investors who share the same dreams as you.
5. Construction
This is where it gets interesting. When building bedsitters, note that at the base of all considerations functionality is key. Always prioritise the efficiency of the space and maximise the use of all spaces. The homes should also have adequate ventilation and lighting at all times.Ensure utilities such as power, water, solar, security, garbage and internet services are top notch to provide the tenants with a good living experience. A key part in ensuring profitability is the reduction of maintenance costs in the long run and therefore ensure you use durable and affordable materials. If you are booking for a contractor to help you achieve this dream, reach out to us at emailjenganami.com or call (+254) 0742 813 160 for guidance.
It is important to ensure that during this process, you have all the legal requirements such as title deeds, lease agreements, construction permits and any safety and environmental compliance certificates required.
6. Market it and they will come!
Once the building is up, you must make sure to promote it so that people know it’s out there and it exists. This can be done by using social media such as posting on TikTok, Facebook Marketplace, jiji etc. Local agents are also very helpful during this period. Ensure that your property has the ability to sell itself by offering competitive pricing and providing quality amenities. The idea is to lure them in and make them stay.
7. Finally! Property Management
This is the last and most important process. It requires patience and can be easy or hard depending on the quality of your structure, the amenities you provide and the type of clientele you are working with. You can either do it yourself or hire a property manager.
The best way to ensure you run a good and profitable place is:
1. Security, Cleanliness, scheduled services such as garbage should run like clockwork.
2. Keep rent collection organized with digital payment options.
3. Address tenant concerns promptly. Having a hands on caretaker can be very helpful in dealing with any cases that may arise
4. Perform regular maintenance to keep the property very clean in good condition.
5. Monitor market changes to adjust rental prices accordingly to ensure you don’t lose out on capital gains.
Final take
Investing in bedsitters in Kenya can be a lucrative venture if planned well. By choosing the right location, ensuring affordability, and managing tenants effectively, you can build a profitable rental business that generates consistent income.
Would you like more details on estimated costs and potential ROI for specific locations? I’d be happy to help. Build wisely!
