There is a Demand for Holiday Homes and it is Growing
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While enjoying her vacation in Kenya, Carey Njeri, a resident of Los Angeles, stumbled upon an intriguing billboard advertising a property in Malindi.
Ms Njeri found solace in the tranquil confines of a gated community, making her one of the growing number of Kenyan diaspora investors embracing the allure of property ownership back home. It all began with an enticing billboard in Malindi, capturing Ms Njeri's attention and sparking an exploration that eventually led her to become the proud owner of a property initially advertised at Sh12.98 million. However, she soon realized the true cost would be 10 per cent higher, factoring in legal fees, stamp duty, and other miscellaneous expenses. Despite the additional financial commitment, Ms Njeri confidently asserts that the peace of mind she gains is a priceless return on her investment.
Ms Njeri, now a proud villa owner, reflects on her decision a year and a half later, grateful for the retreat from city life that her Kenyan sanctuary provides. Her story resonates with the approximately four million Kenyan diaspora members, many of whom express a strong desire to invest in their homeland, particularly in the thriving property and real estate market. The Commonwealth Diaspora Investor Survey of 2018 highlighted key obstacles facing diaspora investors, including a lack of awareness about investment opportunities, concerns about corruption and political instability, bureaucratic hurdles, a shortage of investment partners, insecure financial systems, and weak legal frameworks. However, despite these challenges, the allure of investing in Kenya remains strong.
Real estate consultant Hannibal Simba, who handles a significant diaspora clientele, notes that three out of five clients are diaspora investors. A staggering 55 per cent of his work involves catering to the needs of these investors. The demand for holiday homes has been on the rise, driven by the increasing ability of diaspora individuals to visit their home countries regularly. Platforms like Airbnb and Booking.com have further facilitated this trend, allowing diaspora investors to purchase properties for their holidays, furnish them, and lease them out while they are away. Hannibal Simba himself, a returnee from the United States, recognizes the potential in catering to this niche market.
Debbie K, a projects manager in the US with 22 years of residency, had her own quest for a holiday home in Kenya. Despite facing challenges in finding the perfect property, she successfully purchased a two-bedroom villa for Sh14.48 million a year ago. Making a cash payment of 50 per cent, she secured financing for the remaining balance through a bank. A recent survey conducted by Pangea Trust, a Norwegian accelerator company, reveals that a significant portion of private investments from the diaspora flows into the real estate and construction sectors. Nearly 29 per cent of surveyed individuals invest in these sectors, echoing the sentiments of Ms Debbie who views her vacation home as a valuable and secure investment.
Ms Debbie emphasizes the familiarity of property regulations in Kenya compared to the US, alleviating concerns about unexpected challenges like stray animals, uninvited visitors, or neighbouring construction. She appreciates the diverse community in Vipingo, which offers a global experience right in Kenya, and while she is abroad, Superior Homes, the company that built and sold her vacation home, expertly manages the property as an Airbnb on her behalf. The revenue-sharing agreement, with Ms Debbie receiving the larger share, underscores the mutually beneficial relationship between diaspora investors and local property management services.
With the flourishing trend of diaspora investment in Kenyan real estate, the tales of Carey Njeri and Debbie K inspire others to delve into the unexplored possibilities of their motherland.
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