How long will it it to get back your money from your rental property -ROI

Rental yields are moderate to good in Nairobi, expect around 6.5% from an apartment. How much will you earn? Gross rental yields on Nairobi apartments are moderately good, at around 6.0% to 7%. Townhouses yield around 5.0% to 6.0%. Yields on detached houses are lower, at 4% to 5.5%.

Nairobi property is attractive, with significant capital gains potential. The best combination of rental yield and capital gains seems likely to be offered by townhouses.

Landlord’s rights are strong in Kenya

Kenyan rental market practice is pro-landlord.

Rent: There is no rent control at the upper end of the market. Prior to occupancy, the upper market tenant normally pays a quarter’s rent in advance and an additional one month’s rent as security deposit.

Tenant Evictions: Landlords carry out evictions themselves, even if the law mandates that only the courts can order an eviction. Landlords can also seize the tenant’s possessions for compensation of unpaid rents.

Rents: Can landlord and tenant freely agree rents in Kenya?

There is no rent control, except for units with a monthly rent below KES 2,500 (US$35) as of January 1, 1981.

Deposits

Prior to occupancy, the tenant normally pays a quarter’s rent in advance and an additional one month’s rent as security deposit (rental payments are usually made quarterly). The deposit is refunded if the property is returned in its original condition at the end of the contract.

What rights do landlords and tenants have in Kenya, especially as to duration of contract, and eviction?

Long-term rentals usually last for one to two years. If the landlord or the tenant decides to terminate before the contract’s expiration, a notice must be served three months prior to vacancy.

The landlord can seize the tenant’s possessions if the tenant is unable to pay rent, under the Distress for Rent Act (Cap 293). The tenant must pay within 14 days or else the things will be auctioned to compensate the landlord.

How effective is the Kenyan legal system?

Under the law, only the courts can order an eviction of tenants. But in practice, landlords carry out evictions themselves, due to lack of any other forum for hearing disputes.

Landlord and tenant disputes can be heard by Rent Restriction Tribunals, though in theory, their authority is limited only to rent-controlled units. But most the cost of bringing cases to the tribunal discourages their use. Another problem is the backlog of cases in the tribunals. The lack of a proper forum for hearing disputes works in favour of landlords.

Some landlord and tenant disputes are mediated in community based organizations or the office of the Provincial Administration; but agreements here are not binding.

Source: Global Property Guide