Start Buying and Selling Land in Kenya, Good Business Idea

Buy land in Kenya

In almost every community in Kenya, owning a piece of land has been a coveted investment and with increasing population, this has become even more urgent. The desire (or is it lust) by every Kenyan to own land or a home has reached alarming proportions. Every Kenyan now wants to own a home and stop paying rent.

Starting a land buying business can be a very lucrative venture. Demand for land for farming, building a home or just for speculation is very high all over the country. You can make a kill buy buying land and selling off after some time. Land prices will always appreciate due to this unsustainable demand.

What you need

Land buying and selling business is very easy to start. You will not need any equipment. In fact you can even start without an office. What you will need is enough cash to buy the land. Your profit margins will be much higher if you buy in big acreage and sell in smaller plots. You may choose to register a company or just do it as an individual, any can do.

You will also need a good lawyer. Please don‘t just engage a lawyer because he is a ―lawyer. Look for a lawyer who is experienced and conversant with conveyance matters. These are matters relating to land laws, transfers, succession, land boards etc.

Operation

Before I proceed further, may I add that you will be safer dealing with land that has a title deed, one that is duly registered by Ministry of Lands. This is the most recognized form of ownership of land in Kenya. Try and avoid land that has no original title deed. Do not entertain documents such as allotment letters, share certificates or such like documents. You may regret later.

This land buying and selling business is very simple. What you have to watch out for is fraud and inflated prices. Land has no standard price, the prices will mostly depend on demand, location, developments, rumour, fear, seller circumstances and many other factors which you should acquit yourself with.

This business has many con-men and con-women, so be on the lookout always. Always verify every information and documents that you come across or you are presented with. Never trust any seller, do all background checks and searches yourself.

As I said earlier, buy large portions and sell smaller portions. Scout for land in counties such as Kajiado, Machakos, Kiambu and others and buy large portions such as 1 acre, 5 acres, 10 acres, 50 acres or even 100 acres, depending on your budget. Engage a reliable land surveyor to confirm the size, locate the beacons and identify the piece of land in the larger map of the area. This will be to ensure that you are buying land that exists.

Having confirmed the actual existence of the land on the ground and on the map, it may be safer to confirm with the neighbours and the local administration or county officials that the land is not earmarked for any public utility or is under any dispute. Make sure the number on the map corresponds with the number on the title deed. Confirm also that the names and ID number of the seller is exactly the same as it appears on his or her ID, otherwise, you may regret later.

You must then do a search of records at the local lands office to confirm ownership and details that are on the title deed such as names of seller and identification number and also if there is any charge on the title, such as a bank loan. Please make sure you are satisfied with all the details as recorded at the land registry and on the title. Ensure that the original title deed is available, NOT just a copy.

Next step will be to discuss the offer price, negotiate and agree on a fair price with the original true owner of the land. This is where your lawyer will come in to draw a legal agreement between you and the seller. This agreement will detail the identities of the seller and buyer, the sell price, mode and date of payment, size and location of the land and any other information necessary to complete the transaction. You may need to appear before the land board to get consent for transfer, depending on the land and location. You may send a representative such as the lawyer to represent you.

After taking possession of the land, engage your surveyor to sub-divide the big portion into smaller sizes, preferably 1/8 (50 x 100). You will then aggressively advertise these portions for sale. It will be more profitable to sell them in these smaller sizes. For example, a 5 acre block of land in Lukenya area just off Mombasa Road behind Dayster University goes for between Sh4.5M and Sh.5M as at March 2015. This is in Machakos County. A 5 acre block should produce more than 30 plots of 1/8 acre after taking care of feeder roads since each plot must have a road access. Now, a plot of 1/8 in the same area goes for between Sh.300,000 and Sh.350,000 depending on the accessibility and seller. Combined lawyer and surveyor fees should not exceed Sh.50,000. You can do the math and decide for yourself whether it will be profitable or not.

You may also opt to go for 1 acre and divide into smaller plots. Other areas such as Kamulu, Isinya, Kiserian, Namanga or Machakos Junction are also good areas where you can get big chunks of land at fair prices.

Advertising the plots for sale will be very important. You may need to print out brochures and distribute to potential buyers, you may engage brokers at a small fee, you can also advertise in the classified sections of daily newspapers. The faster you sell off the plots and get back your money the better for your business therefore put serious effort in ensuring that you sell off all the plots quickly. Location will determine the level of interest potential buyers will show. Most buyers want developed areas and with good accessibility, come rain or shine. Be prepared to take potential buyers to your land to view for themselves and confirm whatever they want. You will transfer the title of each plot to the buyer after payment. You can offer installment payments to attract more buyers. Installment payments should attract a higher price though.

Pros

  1. Profit margins can be very high.
  2. The price of land will always appreciate even if you don‘t get buyers immediately.
  3. Demand of land is at its highest in Kenya.
  4. Easy to start, you may not need an office

Cons

  1. Many con-men and con-women have infiltrated land business.
  2. Sometimes it may take long to get buyers for all the plots.

There is no doubt that land business all over Kenya is lucrative. Many simple businessmen and women have become millionaires in a very short time by buying and selling land. You too can make it to become a millionaire, although it is not a get rich quick scheme. You can‘t be a millionaire overnight. What you need most is to carry out independent due diligence, involve professionals such as lawyers, surveyors etc. and your will increase your chances of succeeding. It is now your turn to share with me your experiences, fears or joy regarding this land buying business.

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