As the process and costs of buying real estate in Kenya can vary by location and property type, this scenario helps explain one of the most popular real-estate investment options: a 3 bedroom apartment in the CBD of Nairobi.

Buying any real estate in Kenya is an easy process guided by Kenyan property laws and regulations. Be it as it may, the process will often differ slightly based on the type of property you want to buy and how you are going to finance the property investment. Location is always a factor that can change the process of buying property in Kenya with those located in urban settings requiring additional authorizations and documentations than those in rural areas.

Being a minefield of inefficiencies and bureaucracy, buying property in Nairobi should be approached with caution and it is important for you to be aware of the numerous loopholes that you need to jump to obtain your desired property.

Steps guiding the purchase of a 3BR apartment in Nairobi’s CBD

1. Contract a real estate agent (commission of 5.51%)

• An agent will not only help you search and compare the various 3br apartments available, but they also have critical information about where it’s best to invest and the rates charged in various locations within the CBD.
• There is upper Nairobi CBD that has upscale 3br apartments that are more sophisticated and costly than those located in lower parts of the CBD.
• You will need to pay the agent for searching and viewing fees of approximately Ksh2,000 and Ksh1,000 respectively.

2. Hire a lawyer (rate of 1.5%).

• After the agent helps you to find the right property, a lawyer will guide you through the buying process.
• The lawyer will conduct a title search of the 3br apartment to ensure it is registered at the Lands Registry and Registration of Persons Bureau (cost of Ksh500).
• Upon confirmation of the ownership, you can go ahead and begin the negotiation process

3. Pay deposit (10-30%)

• After terms of sale have been agreed, you will be required to pay refundable deposit with the rest due at the end of the transaction.
• If a lender is to finance part of the property, you must pay the seller’s lawyer the part that is not financed while the lender’s lawyer or your lawyer must furnish the seller’s lawyer with enough professional responsibility to secure sum of the financed part.
• Stamp duty worth Ksh20 is obtained for the duly signed sale agreements.

4. Lawyer prepares for property transfer.

Your lawyer will obtain:

• From the Nairobi City Council the rates clearance certificate
• From Commissioner of Lands the land rent clearance certificate
• Consent of transfer (approximately Ksh7,500).
• From the Lands Office a stamp duty, paid for using a banker’s check worth Ksh600

Your lawyer will also arrange a property inspection, property valuation and finally, the registration of property transfer.

5. Settle the balance with the apartment seller.

• Legal fees and taxes are paid 30 days after ending the transaction.
• From this stage, you are a proud owner of a 3br apartment in Nairobi’s CBD!
• Remember that foreign investors have to pay 30% of gross rental income and 1% annual property tax.
• Additional fees may be incurred such as survey fees, valuation charges and utility fees (electricity and water), etc.