Real Estate Investment opportunities in Kenya. Hostels.

Real Estate Investment opportunities in Kenya. Hostels.

Real Estate investment opportunities in Kenya can be found in residential for sale, residential for rent, hotels, hostels, learning institutions, homes for the aged, hospitals, offices for sale, offices for rent among others.

Hostels are bedsitter like type of rooms built near Universities and colleges for student accommodation. The students share a 3.5 m by 4m room . In most cases in Kenya, the sharing per room is done by 2 people.

Most hostels tend to separate men from women . Food is served in a common dining area near the Kitchen.

The average rent per student per month is between kes 2,000 and kes 3,000 sharing 2 students of the same sex per room. As society becomes more liberalized, decisions regarding same sex sharing will most probably be reconsidered.

In most hostels serving Kenyatta University in Juja, the rooms are self contained, with a toilet and shower. A few hostels have communal showers but the rent is quite low compared to self contained hostels.

There is an administration office that is manned 24 hrs within the hostel so as to address the various issues facing the students.

Return on Investment.

Cost Item

Kshs

%

Land

1,000,000.00

3.926033528

Preliminary

120,000.00

0.471124023

Construction

19,200,000.00

75.37984374

External Works

441,600.00

1.733736406

Contingency

288,000.00

1.130697656

Professional fees

768,000.00

3.01519375

Project Management fees

192,000.00

0.753798437

Marketing

5,400.00

0.021200581

Financial Charges

3,456,000.00

13.56837187

Total

25,471,000.00

100

Financing Plan

Kshs

%

Developer

6,271,000.00

24.62015626

0.00

0

Debt Finance

19,200,000.00

75.37984374

Presales

0.00

0

Total

25,471,000.00

100

PROFIT
TOTAL RENT FOR 48 UNITS

3,456,000.00

TOTAL EXPENDITURE

25,471,000.00

REPAYMENT PERIOD

7.37

In an area where a 1/8th acre costs kes 1m, this can have 48 rooms each rented at kes 6,000 per month or kes 3,000 sharing . The return on investment for this type of investment is 7.3 years which is impressive considering most investments return within 10 to 15 years.

Francis Gichuhi Kamau, Architect.

info@a4architect.com

0721410684

Francis Gichuhi (692 Posts)

Architect Francis Gichuhi . B.Arch. University of Nairobi. Registered Architect, Kenya. Member, Architectural Association of Kenya. Contacts. email info@a4architect.com. Telephone +254721410684


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  1 comment for “Real Estate Investment opportunities in Kenya. Hostels.

  1. Cherette Hanson
    May 9, 2014 at 9:36 am

    Kenya is a country in African great lakes. Opportunities are found in real states such as residential for sale, institutions and others . It is nice to know that they were able to meet with the return on investments in a 7 yrs and a half only. More power to Kenya ‘s estate investment opportunity

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