5 Categories of Real Estate Investments in Kenya
When you talk about real estate investment, the picture that comes to mind to most people is house rentals, apartments and land. But there is more to it than just that. As we are going to see, there are different types of real estate investments.
Knowledge of the different types of investments in this sector will put you in a good position to invest in the various kinds and multiply your profits. You can also decide to specialize in one specific investment that you are comfortable with.
This includes property such as houses, hostels and apartment buildings. It is a lucrative business and there are so many residential property companies that focus on this type of investment. It is the most affordable since one can easily get financing. It is rarely affected by harsh economic conditions, especially if the conditions don’t persist. Even though Covid-19 has affected other investments in the real estate sector, this still fights on.
Popularly abbreviated as CRE, commercial real estate include property features such as office buildings and skyscrapers. Commercial real estate investment mostly has long-term tenants and has higher returns. But one would need more for capital and the maintenance and renovation costs are also high.
It includes features like retail stores and shopping malls. It promises a high return on investment and the retail shops require less capital. The retail property investment is often sensitive to economic changes, and it is highly judged by location. The near the shops and malls are to the customers, the better.
This comprises industries, research and development parks, depots, warehouses, showrooms and manufacturing buildings. It is important for one to identify the market first before getting into this type of property investment. Once you identify it, you will be able to come up with the design specifications.
This investment promises higher returns. The cost of maintenance and repairs is really high. You need to be sure of your tenant’s financial power and payment history first before letting them in. You have to collect at least three months' deposit to cater for any damage that may be caused by the tenant.
Mixed-use incorporates all the above property investments. The urban setup is common with this type of property business.
Before investing in any of these categories of real estate investments, make sure you understand the zoning restrictions of the land. You cannot put up a factory in a land that is considered commercial or residential land.