What Yield Returns can I expect to see from various Rental Investment Properties in Kenya?

Posted on  |  Author Njoroge

QUESTION:

What Yield Returns can I expect to see from various Rental Investment Properties in Kenya?

ANSWER:

Rental yield is defined as the rate or the percentage of returns from the rental income of an investment property.

There are two ways to look at rental yield: gross rental yield and net rental yield.

Gross rental yield is the annual rental income from the property value, which does not include the charges you pay towards the maintenance of this property or the amount that you pay in taxes. It simply is the money you earn as rent yearly.

For calculating the net rental yield, first of all, research about all type of cost which is associated with the property. This can be transaction costs, taxes, ongoing fees, expenses, maintenance cost etc. You arrive at the net rental yield after deducting the annual expenses from the annual rental income.

Rental Yield is important for home buyers to understand how good the property can be if they want to earn a healthy income from their investment. Rental yield is often compared with interest rate offered by other investment channels such as stocks, mutual funds, fixed deposits and gold. Below is an analysis of rental yield for various property types in Nairobi for the year 2020, for investment decision analysis:

  • Apartment –6.0 to 7.0% in Nairobi.
  • Serviced Apartment – 7.0 to 8.0%
  • Detached Houses – 4.0 to 5.0%
  • Commercial Offices – 7.5 to 9.5%
  • Commercial Retail – 9.0 to 11.0%

WRITER OF THE ARTICLE:

This Article is written by Buildafrique Consulting Group, Kenya multi-disciplinary consultancy, that offers END-TO-END DEVELOPMENT CONSULTANCY, REAL ESTATE, and PROJECT FINANCE solutions through specialized subsidiaries. Among our solutions includes:

  1. Feasibility Studies and Market Research.
  2. Project Finance and Capital Raising.
  3. Project Management.
  4. Investment Design Appraisal.
  5. Quantity Surveying.
  6. Construction Cost Consultancy.
  7. Physical Planning and Planning Permissions.
  8. Environmental Management and Impact Assessment
  9. Real Estate Development and Structured Investment Solutions
  10. Property Valuation
  11. Marketing and Property Sales Agency
  12. Property Management and Facility Management

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