How Joint Venture Investments work .

Joint venture investments in real estate around Nairobi has now become a common feature. A joint venture is a marriage of convenience between a land owner and a financier. Each one has something that the other lacks eg the land owner has land but no funds and technical know-how to construct, the financier has the funds but no suitable land to build on. They therefore meet at a point of mutual understanding and agree to work together towards a common goal.

Rental income.

The land owner has the option of selling off the raw land but with a joint venture development , he has the ability to earn more money through sale or earn monthly rent from the renting of his share of the total joint venture construction project. Its a basic fact that bare land does not bring in income unless its developed ,leased or sold.In a joint venture development, the land owner gets the advantage of having his cake and eating it, where he can opt to retain his share and rent it out or sell part or all of his share. Most financier usually opt to sell 100% of their share.

Joint venture agreements.

Its important that both parties, ie the land owner and the financier, take their time to deeply understand the nitty gritty of the agreements to enable smooth sailing. Its not uncommon especially for the land owners to realize they need to change a few aspects right in the middle of the construction phase, which if not well arbitrated, can lead to unnecessary litigation and slowing down of the construction process as witnessed in the Four Ways junction project along Kiambu road recently.

A public disagreement usually translates to a loss to both parties, therefore, prior detailed understanding is very crucial to prevent this.

Architect Francis Gichuhi kamau.

Arch. Francis Gichuhi Kamau. (337 Posts)

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


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