Times are changing.
Mainstream media still leads many of us to believe that all Africans live in poverty, in unsanitary housing or thatched huts. It gets views and clicks.
They’re far less enthusiastic when it comes to showing that many Africans now live… better than Europeans.
Take, for example, these one-bedroom apartments, 25 minutes from downtown Nairobi, Kenya’s thriving capital city.
They cost $25,000 and offer amenities such as a swimming pool, gym, green spaces, shops, and more.
Are they luxurious? Obviously not. But to get a head start in life, it’s still much nicer than living in a shared apartment near the train station in Liverpool, in a place that hasn’t been renovated since 1997.
These $25,000 apartments are aimed at young professionals, young couples, and even students from the capital’s many universities.
With Pratik, our local agent, we visit one of these apartments and calculate the return on investment.
Let’s be clear: this isn’t for everyone.
Only a certain type of investor should invest in this kind of property.
If you’re one of them, feel free to contact Pratik, our real estate agent in Nairobi, Kenya.
To learn more, read our Nairobi, Kenya Real Estate Market Guide. I myself have invested quite a lot in Nairobi, though in other segments.
To a World of Opportunities,
The Wandering Investor.
Services in Kenya:
Articles on Kenya:
- Nairobi Real Estate Market: Investor Guide 2026
- Outlook for investing in African Stock Markets in 2025
- I bought 3 apartments in Nairobi
- High returns on Nairobi real estate – 3 case studies with ROI calculations
- Why are Chinese Real Estate Developers Moving to Africa?
If you want to read more such articles on other real estate markets in the world, go to the bottom of my International Real Estate Services page.
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Transcript of “Brand new apartments that cost less than a car? Affordable housing in Nairobi, Kenya”
LADISLAS MAURICE: Hello everyone. Ladislas Maurice of The Wandering Investor today from beautiful sunny Nairobi in Kenya. Last year I came here and I bought four apartments. So we’re going to go check out on the progress of the construction. And then we’re going to go check out $25,000 apartments in a brand new development with amenities, etc. It’s a pre-construction deal 20 minutes away from, you know, the core center, the nice areas like here, Westlands. And we’re going to look at what it looks like and I’ll explain why I would not invest in such an apartment personally. So I’m not saying it’s a bad investment. I’m just saying, personally, I would not buy these $25,000 apartments and I’ll explain why when we go there. So, I think it’ll be interesting. All right. So, I’m a little late and Uber was a bit slow. So, I’m just going to try to get a guy on a bike.
Hey, Chief, how are you?
MOTORBIKE RIDER: I’m good.
LADISLAS MAURICE: Good. Can we go to Rafta Road?
MOTORBIKE RIDER: Rafta. Okay.
LADISLAS MAURICE: How much?
MOTORBIKE RIDER: Where are you going exactly?
LADISLAS MAURICE: Rafta Road, Rafta Church Road.
MOTORBIKE RIDER: Rafta Church Road. Yeah. 200 is okay.
LADISLAS MAURICE: 200. Let’s go.
Nairobi as a lifestyle destination
LADISLAS MAURICE: I do not typically jump on these motorbikes, they’re called Bodabodas. I’ve just seen way too many accidents, but, you know, when I’m in a rush or if the traffic is just ridiculous, then I do jump on them because they’re just so convenient and it’s just so fast to get around. You know, eventually the odds are going to catch up with you on these things.
And as we’re driving around, you can see how green this city is and how decent the infrastructure is as well, especially compared to other African capital cities. And there’s so much to do here in Nairobi. I mean, one, the airport is just a 25-minute drive away from from the nice neighborhoods of town. There’s a ton of food options, a ton of activities, there’s literally a national park right around the corner. Nairobi is a very dynamic, fun, and generally speaking, fairly pretty city as well.
Using M-Pesa to pay in Kenya
LADISLAS MAURICE: All right. So here in Kenya, people pay with M-Pesa.
MOTORBIKE RIDER: M-Pesa if you have no cash, I don’t care.
LADISLAS MAURICE: You accept M-Pesa and cash.
MOTORBIKE RIDER: Yeah.
LADISLAS MAURICE: Cool. All right. So the way the way it works is, you take your phone, send some money, the gentleman will put his phone.
MOTORBIKE RIDER: [Telephone number]…, let me check.
LADISLAS MAURICE: You’re going to be on YouTube, the women are going to be calling you.
MOTORBIKE RIDER: Oh, no problem.
LADISLAS MAURICE: Can the women call you?
MOTORBIKE RIDER: Yeah.
LADISLAS MAURICE: All right. Then you put, boom. Put the amount, boom. Confirm that it’s your name. Great. Send. I put my pin and then you get the confirmation. Boom, paid.
MOTORBIKE RIDER: Thank you.
LADISLAS MAURICE: All right. God bless you, eh? Thank you.
Visiting pre-construction development in Nairobi
LADISLAS MAURICE: Gentlemen, how are you?
PRATIK: Hi, Ladislas. Hey, Pratik. How are you?
ALEX: I’m fine.
LADISLAS MAURICE: Great. So, this is the the building where I bought four apartments. Construction is ongoing. Alex, it’s your development and I’m here to ask you, how are things going? Are you on time? Is the project going well? And I’d like to to go inside. Can we do this?
ALEX: Sure, of course. Yeah.
LADISLAS MAURICE: Fantastic. So, safety first. Let’s go.
I bought four apartments in this building last year pre-construction. You barely had a permit, right?
ALEX: Yes.
LADISLAS MAURICE: You even had an injunction on the project.
ALEX: Yeah. But now everything is normal.
LADISLAS MAURICE: So, it’s good to come back a year later, see that the injunction is gone and that the project is uh is being built. Are we on time with the delivery? Where do we stand?
ALEX: Yes, of course. So, as you see, now we have a three blocks. Like Block C, we already reached to seven to eight floor. Then Block A and B also around second floor. Everything is moving on well. Our completion is around June 2027. We will deliver the project on time.
LADISLAS MAURICE: So, it was Q2 2027 and you’re still on time?
ALEX: Yes, of course.
LADISLAS MAURICE: Can you do uh as a reminder, can you tell us about the amenities in this building?
ALEX: In this building, we’re going to have a big uh heated swimming pool. We also have a baby pool. We have a fully equipment gym. We have sauna. We have uh fully backup generator. Each block we have two lifts. Just a few days ago, we also import some equipment for the mini golf club, uh which will be like uh VIP lounge for the members, for the residents here. Then we also going to have a very big uh recreation area on the ground floor with water features.
LADISLAS MAURICE: Yeah, I’m really excited to see the end result. Prices have gone up about 15% since I first bought. So, that’s really exciting. But the project has also been de-risked. So, I mean, people who come in now, it’s not like they’re overpaying or anything. I mean, when I bought, there was literally nothing and an injunction.
So, Pratik, you’ve had a lot of your clients buy in this uh in this development, right?
PRATIK: Uh, yes, we have. And uh it’s been a 50/50. So, 50% local, 50% foreign.
LADISLAS MAURICE: Are people looking to live here or are they mostly investing?
PRATIK: It’s a mix of both. Some people want to live, some people want to invest. Obviously, the type of units they’re selling allow you to do both as well together.
LADISLAS MAURICE: Yeah, so it’s like one bedroom, one and a half, two bedroom plus a studio, three bedroom, four bedroom, there’s a big, big range. The people that are not Kenyan, where are they from typically? Which countries?
PRATIK: So, we get them from all around the world. We’ve had uh Americans from the US, we’ve got Europeans, we’ve got even Australians and from South America as well. So, it’s a pretty big spread.
LADISLAS MAURICE: From South America?
PRATIK: Yes, yes, yes, you’ll be surprised.
LADISLAS MAURICE: From where? Which country?
PRATIK: Uh, it depends. There’s there’ve been some inquiries from Colombia, countries like that. And uh I mean it’s purely real estate investment from their perspective.
LADISLAS MAURICE: So, I’m happy to see this, but now let’s go see the the $25,000 apartments. I mean, this is Alex, when Alex told me about this project a few months ago, I was like, really? $25,000? You even had studios for $17,000?
ALEX: Yes, we have.
LADISLAS MAURICE: How are sales doing?
ALEX: It’s pretty good. Uh now we already reached almost 70%. We are just in the basements, around basement, ground floor, yeah.
LADISLAS MAURICE: All right. So, let’s go check it out. Let’s go see what a $25,000 apartment looks like.
So Alex, how far are we from the project?
ALEX: It’s just around 20 minutes 22 minutes somewhere. Yeah.
LADISLAS MAURICE: Ok. So you were showing me on google maps.
ALEX: Yeah, so you see we are here.
LADISLAS MAURICE: 22 minutes. Alright. And right here we’re in the heart of Westlands, the best neighbourhood essentially where everything is. And so it’s only 22 minutes away from essentially the jobs and the money. So it just gives an idea of the commute and how far away this project is from town.it’s not like an hour away. It’s pretty close.
Alright, let’s go.
Overview of Westlands neighborhood
LADISLAS MAURICE: So, yeah, I really like this neighborhood. This is why I bought here. Here there’s a really nice little food place with like fresh food, uh some paddle court. The area is very green. I just wanted a a premium area. That’s really what I wanted for myself. And then when I bought, uh they had just planned a to open a Carrefour, which is really big for the neighborhood. And the Carrefour right here is literally just a a four-minute walk from the apartment. You get all the good food and there’s some like cafes, there’s like a a bar, there’s, you know, you can get a haircut, a little mall, just a five-minute walk away. And then you can see there’s barely any traffic around here. It’s um really happy I bought here. And then also the church I go to is down there. And they have a huge, it’s a huge Catholic campus. Uh very green. So, you can go jogging there, running, go for a walk. So,
Discussion with Chinese developer Alex on building in Nairobi
LADISLAS MAURICE: So Alex, how many years have you been here in um in Kenya?
ALEX: More than 11. More than 11 years.
LADISLAS MAURICE: More than 11 years.
ALEX: Yeah, almost 12.
LADISLAS MAURICE: How’s your Swahili?
ALEX: My Swahili is not good.
LADISLAS MAURICE: So, you operate purely in English?
ALEX: Yeah.
LADISLAS MAURICE: Okay, cool.
ALEX: Very kidogo Swahili.
LADISLAS MAURICE: Okay. And um you came here with your family?
ALEX: I come alone, but now my family, my wife, my son also moved here.
LADISLAS MAURICE: Okay, good. And does your son go to an international school or is there like a Chinese school? How does it work?
ALEX: Oh, he’s still young. He’s just like uh not yet two years old.
LADISLAS MAURICE: Okay. All right. Premature discussion. Is there a Chinese school though?
ALEX: Yeah, they also Chinese school.
LADISLAS MAURICE: Okay. Interesting.
ALEX: And many of my friends uh their kid uh which is uh older, they also go to the international school. Some are also Chinese school.
LADISLAS MAURICE: And so how many developments have you done here as a group?
ALEX: More than 10.
LADISLAS MAURICE: That’s one of the reasons I I invested with Alex is because there was a a really good track record. I went to see the developments and what you could see was overtime a gradual improvement. So, if you look at the first developments, they were very, I mean, the quality was pretty, you know, mediocre. Sorry to say this, Alex, but from development to development, you can just see the quality just improving, improving, improving. And that’s a feature that you see with a lot of um Chinese products across the world. I mean, I think we all remember made in China 20 years ago, just meant poor quality. And now, I mean, some of the best stuff comes out of China. Just look at, you know, DJI or all these nice uh Chinese car companies. I mean, just quality comes out of China now. And then you can see this in developments, Chinese developments in in all over Africa. They’re getting better and better and better.
But they’re still priced in a way that comes with a slight discount uh because they’re still there’s still a bit the reputation of made in China. So, in many cases, I find that some Chinese developments are are good deals from that point of view. There’s a gap between the perception of quality and the quality that you actually get and overtime that gap will will decrease. Yeah.
And so here we’re looking at a nice highway. Four-lane highway. You can see the uh that’s probably the local headquarters of KPMG right here. A lot of big international brands all over Nairobi. I mean, Nairobi really is the the the capital economic and political capital of East Africa. Whenever people want to start operations in Africa, I mean, not just East Africa, but in Africa in general, Nairobi is usually top of the list after South Africa. And then again, South Africa is different. It’s in many ways a developed market, more than developing market. And there’s a constant flow of expats and also regionals that move here. A lot of people from Tanzania and Uganda and Congo and Sudan. People from all over are moving to Nairobi and and doing business here, studying here, working here. It’s just a place that attracts talent. Look at that huge billboard for KFC. Gosh, that’s a huge billboard.
So, Alex, do you know how many people from China have settled here in Kenya?
ALEX: I heard around the 50,000.
LADISLAS MAURICE: 50,000.
ALEX: Yeah, and uh from last year and this year, this figure increased even more. I think at least 50.
Geopolitics of Kenya and Chinese Investment
LADISLAS MAURICE: I think this is an interesting topic to to bring up because Kenya from a foreign policy point of view is a very pro-West. It’s a country that is aligned with the West much more so than other African countries. Even though it’s doing this, it’s still extremely open to Chinese investment. And the Chinese just appear, they’re just focused on business. They’re not coming with a mentality of, oh, this country is pro-West politically, so we’re not going to invest here. Um so, you know, Chinese investment is just flooding into into the the country. Really, investment from all over is coming into Kenya.
LADISLAS MAURICE: So, Alex, is your group considering expanding into other African markets or other cities in Kenya?
ALEX: Yes, actually, we also did some survey other countries, such as uh Tanzania, Rwanda, and uh the Congo.
LADISLAS MAURICE: It’s really green around here. Can you tell us, Alex, a little bit about the area we’re going to?
ALEX: Uh we are going to Lower Kabete. Actually, the road we are using called the Red Hill Road. Uh it’s also built by Chinese. Then just behind us, three minutes away it’s the biggest shopping mall in Nairobi, called the Sarit Centre. Now, we are heading to our project. This area you can see it’s like a townhouse area. Uh you can see many of the high-end townhouses.
LADISLAS MAURICE: Yeah. So, there are quite a few nice homes around here. I was talking to Pratik and you’re saying, yeah, some of the homes on this road are like early on this road are about like up to a million dollars each. Obviously, we’re going further down, so it won’t be a million dollars there. It’s $25,000. It just shows the the development in the city. It just shows the dynamics. It’s fascinating.
ALEX: So, this is the Zen Garden, the very famous restaurant.
LADISLAS MAURICE: What kind of food is it?
ALEX: It’s mixed. Asia, Africa. We just passed the Red Cross, the headquarters of uh I think East Africa.
LADISLAS MAURICE: Yeah, the UN is actually not too far from here as well. Um and they’ve been shifting thousands of jobs from New York to Nairobi. Um so, this is going to be a nice source of growth uh for the economy. And also for for real estate, for tenants, quality tenants with uh good salaries.
Yeah, so look, it’s just all these nice homes here around here, really nice. And this is on our way to the $25,000 apartments. And look at how green it is here. It’s so nice. Like Nairobi is such a green city. Like I’ve traveled all over Africa and I can tell you Nairobi is just pleasant. It is such a nice place.
ALEX: This is like the embassy of Iran. Embassy, yeah.
LADISLAS MAURICE: So, yeah, Embassies. Beautiful.
Yeah. So, here we’re passing the university. We passed two universities, actually. The government school and then the University of Nairobi Business Campus. So, Alex, do you think these are potential tenants for the apartments?
ALEX: Yeah, that’s why we designed those kind of small units in the future. I think many of them they will be here because there’s no traffic jump. Just from our project to the center of the city, maybe 20 minutes.
LADISLAS MAURICE: For now.
ALEX: Yeah.
LADISLAS MAURICE: Until more people like you build huge developments. Yeah, so suddenly it just became less nice. Very clearly. No more million dollar homes, but I mean these apartments must be pretty cheap on the secondary market.
Tour of affordable housing development in Nairobi
LADISLAS MAURICE: All right. This is big.
ALEX: Yeah, this is our new project. Uh totally including 786 units. A studio starting from uh $17,000 USD to $54,000 USD two bedroom with a mastering suit.
LADISLAS MAURICE: Like just imagine that $17,000 for a studio, 25 minutes away from the center of a city that is expected to double its population in the next 20 to 30 years. $17,000. Can you tell us about the amenities?
ALEX: Yeah, we have a lot of amenities including the swimming pool. We also have fully equipped gym. We have a social hall. We also going to have a gaming room equipped with a PlayStation for young people. We plan to have a supermarket, which is around uh 1,200 square meters. Then it’s also going to have many shops like uh bakery, salon, and even small restaurants. Yeah.
LADISLAS MAURICE: So, the whole deal.
ALEX: Yeah.
LADISLAS MAURICE: So, Ciara’s the the sales manager for this specific site, right?
CIARA: Yeah.
LADISLAS MAURICE: How are you, Ciara?
CIARA: I’m good. How are you today?
LADISLAS MAURICE: How are sales going for this project?
CIARA: Approximately 30% have already been sold.
LADISLAS MAURICE: In how many months?
CIARA: In six to seven months. And we still have uh around 20 months to go.
Who is buying cheap apartments in Nairobi?
LADISLAS MAURICE: So, can you tell us about who has been buying this?
CIARA: Our main sources are actually investors, because you see this is going to be the biggest and the highest building in this district. So, basically it’s a landmark, and a lot of investors are looking good on this project right now.
LADISLAS MAURICE: Are there people that are buying for themselves as well?
CIARA: Yeah, because we also provide two bedroom. For example, if you are a family unit, or with a your parents or children, two bedroom is a very good choice. However, if you actually live alone, actually we also provide a loft. For investors, they would choose pure studios and studios for renting, because we have a university three kilometers away. And uh that is…
LADISLAS MAURICE: Two universities I saw, the government one and the the other one.
CIARA: Yeah. Exactly. So they are all our potential clients. We have other type of units that is let’s say a loft. So, loft is actually duplex. You have your bedroom on the second floor, and first floor is basically for lounge area and your kitchen and toilet. So, I think bachelor would choose the loft for most of the time. And for two bedroom and one bedroom, that is with the family unit.
LADISLAS MAURICE: Okay, so give me an concretely like recent clients of yours that bought an apartment for themselves, what jobs do they do, who are they I’m just trying to understand who are these people?
CIARA: So, I have a client, his uh job is a lawyer, and uh he bought uh like uh two two bedroom and five one bedroom for the staff dormitory. So, basically it’s like a benefits for the lawyer, because you see our price here is very affordable.
LADISLAS MAURICE: So, Pratik, you’ve sold some apartments here as well to clients of yours?
PRATIK: Yes, just recently we have sold, I think about five or six apartments to some of our clients. And uh they are from overseas, they’re investors.
LADISLAS MAURICE: Why would they invest here?
PRATIK: I think mainly the price point appeals. Uh and it’s not too far outside the city.
LADISLAS MAURICE: Have you sold to locals as well?
PRATIK: Yes, definitely, we have sold to locals. Mostly young professionals, not people who are straight out of university, but people who are more down the career path. And they do work for most of the multinational corporations within Nairobi. Um so, mostly in the Westlands, CBD area. And those are the the people that tend to buy. They were crossing 22 years old, 23 years old, just a bit older than that. So they have been in their career for a couple of years.
LADISLAS MAURICE: Compare this to Europe where can a 25-year-old in Europe uh be buying a studio apartment in the capital city, in the outskirts of the capital city, in a building with a gym, with a swimming pool, with a running track, with a bunch of amenities. Can Europeans afford this? No. The the world is changing fast. We’re reaching a point where, yeah, young professionals in African cities can afford to buy apartments like this. I think the payment plan is what? two two, three years?
CIARA: Yeah, actually, you only need to pay 20% deposit, and the rest of the 80% could be monthly, quarterly, or as you free to pay before 2027 June.
LADISLAS MAURICE: So, essentially a two-year payment plan and people people can afford this. They’ll get a bit of help from from family, from friends, but then they actually own their apartment by the age of 30 with all these amenities. That’s one of the reasons I wanted to make this video, not not to sell this, but just to show people that the world is changing, Africa is moving forward, Africa is growing, and people just don’t understand. They still think everyone lives in mud huts or something, but no, absolutely not. In many cases, people live better here than wherever you’re from.
Touring $17k studio apartment and full ROI calculation
LADISLAS MAURICE: So, now we’re going to have a look at the model apartments. We’re going to do all of the numbers in terms of ROI to get to net ROI number and then I’ll explain why I personally would not buy here. Let’s go. Construction is ongoing.
ALEX: Uh yes. Uh we are we started this project uh in June. Now we have finished like uh around the two basement. It’s going on very well.
LADISLAS MAURICE: You’re a busy man. You have three ongoing projects, right?
ALEX: Yes, currently.
LADISLAS MAURICE: You managed to get any sleep?
ALEX: Most of the time I can manage. This is our studio apartment show house.
LADISLAS MAURICE: And this is how much?
ALEX: Uh this is average around the 2.2 million in dollars around $17,000.
CIARA: It’s selling very fast actually.
LADISLAS MAURICE: I can imagine. So, we did the numbers for all of the different models. This one was not the one with the highest net rental yields. Pratik, you had some thoughts on capital appreciation.
PRATIK: Yes, so this will mostly be a purchase for capital appreciation because of the proximity to the city and how the city is now going to expand with the population expanding.
LADISLAS MAURICE: Yeah. So, we’re looking at a net rental yield of about 5.5%, though there are other units where you can get more than 7% after all expenses, we’ll show the numbers. But yeah, I mean, $17,000. Imagine that, $17,000 for a studio like this, all the amenities, close to town. It’s very hard to lose money on this. Like if Alex actually built it, which he seems to have a good track record of doing, of completing construction, it’s very hard to lose money on this. This is for people that are worried about their savings and, you know, the direction of whatever country they live in or they don’t trust banks or they think gold has become too expensive. I mean, you just put $17,000 here. It’s a pretty safe bet.
Cool. So, this is the one bedroom.
ALEX: Yes, this is our one bedroom, uh which is around $34,000 USD.
LADISLAS MAURICE: $34,000. Okay. This is this is really nice. Yeah, so we did all the numbers in detail for this apartment, and we would end up with a net rental yield of about 6% after all expenses and the rent is about $270 per month. But there’s another apartment that you have. There isn’t a model that’s been done. When we were running the numbers, it was higher. And then this is the one Pratik that you’ve been recommending to your clients that mostly they should be buying.
PRATIK: Yes, because I mean, uh in these kind of areas, this is a very unique product. Uh this one bedroom with the loft.
LADISLAS MAURICE: Cool, so it’s a one bedroom with a loft. So, how much does it cost?
PRATIK: The price is about $25,000 USD.
Overview of closing costs and maintenance costs
LADISLAS MAURICE: What are the closing costs approximately?
PRATIK: Um, so you’ve got a stamp duty of 4%. You’ve got legal fees of 1% paid by the buyer and legal fees of 1.5% paid by the seller. And incidental costs. So, I mean, about 300,000 shillings, which works out to about $2,300, something like that.
LADISLAS MAURICE: What about the rental income?
PRATIK: So, rental income is about $240, $250 uh per month, which works out to about 32,000 shillings per month.
LADISLAS MAURICE: And what would be the occupancy rate? Because you do a lot of property management as well. You don’t just help people invest.
PRATIK: Yeah, I mean, in this area, this price point 95% is is what we can get as occupancy.
LADISLAS MAURICE: What other expenses are there?
PRATIK: There will be a fee for finding tenants, which is uh usual in most countries. And this is, I mean, you get a tenant here staying for roughly 18 months. So once every 18 months, and that’s usually one month’s rent. There’s property management fees, which would work out to be about 6.5% plus VAT. Uh further to that, you have HOAs and those kind of services, which is 3,500 shillings per month.
LADISLAS MAURICE: Which is about $30 of, yeah, HOA’s monthly service charges.
PRATIK: Yes, and then uh maintenance budget and incidentals, which we would say 20,000 shillings a month. I think that works out to be about 150.
LADISLAS MAURICE: And how much would be the net net rental yield before income tax?
PRATIK: So, 7.2% around there you can look for for that uh kind of yield. Um in addition to whatever capital appreciation you experience through the project.
LADISLAS MAURICE: Combined with a two-year payment plan. So, look, now the question is why would I not buy this? I’m taking the perspective of someone living far away. I don’t necessarily want to be dealing with apartments in outskirts.
Property management in Nairobi, Kenya
LADISLAS MAURICE: Also it’s harder to find talent in terms of property management when you start venturing out. But Alex, you offer property management services as well, right?
ALEX: Yes, we have.
LADISLAS MAURICE: Okay. And that’s what Patrick, right? Patrick?
PATRICK: Yeah, yeah, sure, sure.
LADISLAS MAURICE: All right. So Patrick, you’re the you’re the property manager.
PATRICK: Yeah, yeah, sure, sure.
LADISLAS MAURICE: So, you manage the properties for all the other buildings?
PATRICK: Yeah, yeah. We do for apartments that developments that we’ve done. Since this is property management, that is related with the developer. We found it fit like it will be like an after sales service to our investors. The benefit that comes with the our property management is that we relieve the investor from a stress of day-to-day running of the property in terms of managing the tenants communication, also handling the repair needs from day-to-day. Also, we do collect rent on behalf. Chase people, actually, we have automated system that helps us to do it is a timely way.
LADISLAS MAURICE: You see the project I bought in, and you see this project. Where do you expect to be chasing tenants more to get paid? In this building or in the previous building?
PATRICK: I anticipate my probably here. We might encounter that kind of a problem. Since the development it’s quite unique in this area, it’s for the first time it’s coming up on this area.
LADISLAS MAURICE: It’s fine. It’s entirely manageable, but you just need to understand that when you venture into an area like this and you’re buying $17,000 studios, renting it for $140, you’re going into a social class that’s typically a bit tighter on money. It’s great that you guys offer this service here on site, which makes everything a lot easier. From a risk management point of view, if it weren’t to work out, and I wasn’t happy with the property management, it would be harder to get a property manager to be willing to come here and and deal with issues for a rent of $140. So, it’s just from that point of view.
And then also you need to be comfortable with delays in terms of payments, tenants kind of struggling a bit more. It doesn’t mean they won’t pay, it just means they’ll they’ll be a bit more drama. I mean, that’s mostly your job to sort out.
You know, I’ll put it this way, if you’re European, if you’re American and you’re not very familiar with Africa, I wouldn’t start investing in this. You’ll just have a hard time understanding the dynamics. You’ll be disappointed, you’ll be dealing with ambiguity that you’re not used to. I think this is a much better fit for people who understand Africa. So, diaspora or even Europeans, Americans that have spent a lot of time in Africa, or people who live here. If you’re diaspora and you have like family members around, they can come help you. So, I I think this is an appropriate product for such people.
Personally, I prefer to buy the more premium apartments in in the center. There’s less drama, I find. But I completely understand why people would invest in this. Um, you know, we’re looking at this one-bedroom loft. Nnet rental yields of 7.2 and the apartment’s $25,000. I mean, it’s not going to get cheaper. You’re going to get capital appreciation. You might even get more capital appreciation than than the buildings I bought.
So, ultimately, you just need to be honest with yourself as an investor. Do you want to deal with this? Do you have the tools to deal with this? Are you comfortable and what’s your style of investing, right? This is just not my particular style, but it is the style of many people and I understand why. I don’t think this is a bad investment at all.
Buying a whole apartment block in Nairobi
LADISLAS MAURICE: It’s just not for me. However, what could be interesting, Alex, is if I were to come to you and said, Alex, I want to buy 50 apartments. Give me a deal for 50 apartments or 30 apartments. Could you do this?
ALEX: Yeah, of course. Yes.
LADISLAS MAURICE: You’re open to negotiation.
ALEX: Yes.
LADISLAS MAURICE: Right? Because right now you’re not really negotiating on these prices. But if you buy a whole bunch
ALEX: Of course, we are open for negotiation.
LADISLAS MAURICE: That starts to make more sense where you buy a whole block, 20, 30, 40 apartments, where you can then afford to have your own property manager full-time on site. Can people negotiate that with you as well to say, I’ll buy 40 apartments, but then I want a desk or a chair allocated to my property manager?
ALEX: Yeah, of course.
LADISLAS MAURICE: Cool. So, then you don’t have that issue anymore, right? You you have your own property management, you can run it the way you want, you can do mid-term rentals, you can do a little bit of Airbnb, it might work here. How much would it cost, Pratik, um if I wanted a full-time, just very junior property manager just to manage like simple in one building a few, you know, 30 apartments.
PRATIK: I mean, uh you’re just looking at if it’s a junior person, uh a salary of about 20 to 30,000 shillings per month, which would suffice. And uh that can get you over the line because they’ll be based on site. They’ll be able to handle any issues and obviously, there’ll be a connection with the developer to make things smoother.
LADISLAS MAURICE: So, we’re talking about $250 a month to get someone, right? So, you have 25 apartments, that’s $10 a month of property management per apartment. And you have one person dedicated to you, right? This, I like. This is interesting. If you’re European, if you’re American and you want to start entering this sort of market, this is how I would approach it personally. Any parting words?
PRATIK: So maybe we can mention that uh the payment plan is very good. Over the construction period of two years, it would be only $650 per month that you’re putting into buying a studio and within two years you can be a homeowner effectively.
How to contact Pratik to buy apartments in Nairobi
LADISLAS MAURICE: Look, I mean, I understand why people are buying this. Um, make your deposit and then $650 a month. If you’re interested in this project or the previous project, there is a link below and you can get in touch directly with Pratik or Alex.
All right, gentlemen, thank you very much. Patrick, thank you. Alex, thank you.
Make sure to download my free ebook, 12 mistakes to avoid when investing in international real estate, which you can find on my website link below, and feel free to follow me on Instagram @thewanderinginvestor. I look forward to hearing from you.
