Things to Consider When Investing in Property During an Election Year
Even though the economy has faced myriad challenges in the months leading to the polls, real estate investment should never be “left as an option of investment” for the future only.
In Kenya where the democratic space is strong and vibrant, elections are a big deal. With less than a month before the long-awaited general elections taking place, the stakes are high.
Even though the economy has faced myriad challenges in the months leading to the polls, real estate investment should never be “left as an option of investment” for the future only. In regards to real estate property investment, the election cycle offers optimism and a cautious approach towards investment in the “same bowl”.
Kenya looks at past electoral violence as a mirror of where it should never find itself no matter the electoral results. Investment in the property during an election era can be done in the following ways:
Investors and potential investors of property, real estate, and business should be smart in their research of the life post-election. Additionally, research should focus more on property investment in areas not considered “electoral violence hotspots”. This however does not mean investors should not be done in all areas with potential growth in real estate.
It's only in risking property investment that you find whether the “gold” in real estate is worth the pursuit or not. It is important to mention that the research done should be consistent and accurate and should reflect the real estate objectives, goals, targets, needs, and future aspirations. Furthermore, research shouldn’t be tied to an election era only; it should be carried out every other time.
In as much as every investment opportunity in property seems to be “ticking all the right boxes”, caution should never be thrown to the wind. These are some of the questions that developers in real estate can ask themselves in an election era in matters of property investment.
Will the price of materials shoot further or decrease post-election? What are people’s attitudes toward purchasing property in the days leading to the elections? In the event of less business in property purchase, what can be a substitute to diversify income?
Will the property valuation decrease or increase post-election? Is investment in property development abroad a wise idea during an electioneering period? In answering these questions well, the property developer will be well prepared to walk towards “property success” no matter which “route” takes them there. Obviously, the route should be within the laws of the land.
The property to Purchase
Property valuation decrease or increase means fluctuation of the price of property changes from time to time especially in an election year. In consideration of the fact that the economy might be “unfriendly to investors”, it would make sense to wait for a more predictable economy so as to purchase the property that one looks forward to acquiring at a reasonable price.
Already the election era has caused some construction works to stall. To still invest in property and buy that “dream home” one can either purchase a complete house or a near-complete house. In the run-up to the elections, property purchase should be viewed more as an investment priority rather than an investment option. In doing this the property developer will reap the benefits of property investment and the investment decision will be justified once the economy stabilizes.
Preparation for Unforeseen Circumstances
While at times during the electioneering period the future is not certain, preparation is the perfect antidote in dealing with unforeseen circumstances post-election. Risk assessment and management are important to developers of property in the months leading to the election.
For example, if the seller of the property sells the house expensively, one can purchase the property in installments.
Furthermore, one can look at a different market for the same property at a lower price. If all options in purchasing property hit a dead end, property developers are advised to engage in the real estate business when the prices in real estate properties are depressed and the economy is stable.
The Government should offer incentives to foreign investors so as to boost confidence that the property development would reap maximum profits. These incentives include the following: land registration be free of corruption, access to cheaper and efficient raw materials for construction, lower land rates, investors should incorporate the locals in the construction of the property, leasing of property with lower interest rates, and improved security pre, during and after the much-awaited General Elections. Everyone desires to invest in a country where their property is safe, secure, and valued even in the days to come.
Elections happen and as new leaders are sworn into office, “life continuing as normally” means investment in real estate and all businesses shouldn’t necessarily have the “wait and see” approach as this wastes time and resources.
Invest as much as you can in property development and prepare as much as you can for “any eventuality”. Besides, Kenya remains our country no matter who takes the reins of power.
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