Sunpark Residence
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Where buyers can find money to do more deals in Kenya.

ByComplete Circle Properties

Featured Image: Sunpark Residence in Syokimau. 2 and 3 bedroom apartments available for sale and renting.

In Kenya, real estate buyers and investors have several options for accessing funds to finance multiple deals. Here are the main avenues where buyers can find money to do more real estate transactions:

1. Banks and Mortgage Providers

  • Commercial Banks: Many Kenyan banks, such as KCB, Equity Bank, Co-operative Bank, and Standard Chartered, offer mortgage financing. They provide loans for both residential and commercial properties, and the interest rates may vary depending on market conditions. Some banks also offer specialized mortgage products for developers and investors.
  • Kenya Mortgage Refinance Company (KMRC): KMRC offers long-term loans to commercial banks and SACCOs, which are then passed on to individuals at lower interest rates. This initiative aims to increase home ownership in Kenya.

2. SACCOs (Savings and Credit Co-operative Organizations)

  • SACCOs are popular among Kenyans for providing affordable loans. Many SACCOs offer real estate financing options to their members, allowing them to purchase land, homes, or even develop properties.

3. Private Lenders

  • Hard Money Lenders: Some private individuals and companies in Kenya offer short-term, high-interest loans for real estate projects. These loans are typically asset-based and are a good option for investors who need quick funding to flip properties or complete developments.

4. Microfinance Institutions

  • Microfinance institutions like Faulu Kenya, KWFT (Kenya Women Microfinance Bank), and SMEP provide loans to individuals and small businesses, including real estate investors. These loans can be used for land purchase, home construction, or renovations. While they may have smaller loan limits, they tend to be more flexible than traditional banks.

5. Real Estate Investment Trusts (REITs)

  • Investors can pool funds into Real Estate Investment Trusts, such as Stanlib Fahari I-REIT, which invests in real estate projects. This allows smaller investors to access larger property deals without needing to own the entire property. REITs are traded on the Nairobi Securities Exchange (NSE), making them a liquid investment option.

6. Equity Release

  • Home Equity Loans: Homeowners who have built up significant equity in their properties can apply for an equity release loan. This allows them to borrow against the value of their home and use the funds to invest in other real estate deals.

7. Chamas (Investment Groups)

  • Chamas (informal savings groups) are a traditional and popular way for Kenyans to pool money for various investments, including real estate. Some chamas focus specifically on real estate, allowing members to jointly buy land, develop property, or invest in housing projects.

8. Real Estate Partnerships

  • Joint Ventures: Investors in Kenya often form partnerships or joint ventures to pool resources for larger real estate projects. This allows them to combine financial resources and share the risk, making it easier to finance larger developments or multiple deals.

9. Government-Backed Housing Finance Programs

  • The Kenyan government has introduced several housing finance initiatives under the Affordable Housing Program. These include programs for developers and homebuyers, offering incentives such as tax breaks and access to low-interest loans to promote affordable housing.

10. Crowdfunding

  • Some Kenyan investors have turned to crowdfunding platforms to raise capital for real estate projects. While not as widespread as in other markets, real estate crowdfunding is an emerging option that allows multiple investors to pool funds for property purchases or developments.

11. Angel Investors and Venture Capital

  • High-net-worth individuals and venture capital firms may invest in real estate projects, especially if the investment has a high return potential, such as a commercial real estate development or a unique property venture.

12. Asset Leasing or Rent-to-Own Arrangements

  • Rent-to-Own: This creative financing option allows a buyer to rent a property with the option to purchase it later, with part of the rent being applied toward the purchase price. This is particularly useful for buyers who do not have enough capital for an outright purchase but plan to buy in the future.

13. Bridge Loans

  • Bridge loans are short-term loans that can be used to fund real estate purchases while waiting for long-term financing. Some Kenyan financial institutions offer these loans to help buyers quickly close deals and then refinance later.

14. Self-Directed Retirement Accounts (Umbrella Pension Funds)

  • Some investors use their pension funds to invest in real estate through self-directed accounts. These funds can be directed toward property investments while still benefiting from tax advantages.

By leveraging one or more of these financing options, buyers in Kenya can access the capital needed to grow their real estate portfolio.

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