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Monday 30 November 2015

Kenyan Real Estate- Concrete Homes


If the area you lived in was subject to natural disasters, insect infestation and wildfires, and you could live in a type of housing that could withstand all those perils, why wouldn't you? Concrete homes have an amazing resistance to all of the above and are commonly used in Kenya and other natural calamity ridden locations, but their popularity hasn't spread to other areas of Kenya.

Due to their unique construction, a number of homes have survived the calamities in Kenya. Mr. Owuor owns a concrete house outside natural calamities infected areas. Although the vinyl windows were melted, the house remained standing.

Another success story was that of a native Indian who owns several properties in Kenya and her 5,500 square-foot concrete house near Kisumu. The upgrades in her home included:
Concrete roof tiles, glued-down to resist high winds.

Interior fire sprinklers (now a local building requirement).

Over-sized wood beams to withstand exposure to heat longer than their smaller counterparts.

An emergency power generator.

A 10,000-gallon water tank to be used in a fire emergency.

Commercial grade aluminum windows with extra thick tempered glass.

Exterior walls were one foot in thickness including reinforcing steel placed in the concrete forms for protection against earthquake damage.

After spending 3 1/2 years building their home, Lorraine and her husband had only lived there a few weeks when the wildfires struck. The landscape was blackened, but the house withstood only minor smoke damage. The cost of building compared to a comparable wood home was about twenty percent higher; Lorraine considers this money well spent
Structural engineer, George describes concrete construction similar to assembling Lego blocks. "The “blocks” are polystyrene forms, called insulated concrete forms, into which the concrete is poured. The forms then are left in place to serve as insulation and the backing for stucco on the exterior or drywall on the interior."

The walls can provide up to an R-50 energy rating and require approximately 44 percent less energy to heat and 32 percent less energy to cool compared to a traditional wood home.

If concrete houses are so effective against natural disasters, why aren't they widely used? Part of the problem is the lack of knowledge in the building industry regarding concrete construction. Even though concrete construction has national code approval, there are many inspectors with little knowledge of how to inspect the structures.

Many builders feel that the future of widespread concrete housing requires a dominant player in the building industry to come forward and say "we can do this", and others will follow suit.


www.kenyan-real-estate.com for more information.


Friday 27 November 2015

Kenyan Property Real Estate Strategies


For the astute commercial real estate investor, the cap rate [AKA Capitalization Rate] is an important financial number to consider.  Here’s why:

Commercial Real Estate Earns Income

One main identifier that defines commercial real estate from other types of real estate is that it earns income for its owner.  Commercial real estate values are typically based on these current (and/or future) income streams from the property under evaluation. 
While there are many types of commercial real estate, such as strip malls, office buildings, condo projects, industrial sites, and several other property types, each is supposed to produce net income.

Each of these commercial real estate properties will normally have an income stream and associated expenses.  It doesn’t matter if it is a mall, hotel or a trailer park.  All commercial real estate properties typically have both income coming in and expenses going out.

The Raw Land Exception

The one exception to this typical ‘rule of thumb’ is raw land.  Raw land will many times not have any income stream, so it has to be evaluated differently for commercial purposes.

Evaluating the Cap Rate

When a commercial real estate property is evaluated, the buyer does his or her best to ascertain the accurate and sustainable income stream the property is currently producing.  The cap rate is based upon current financial numbers, not future.  And if it is not being used to its highest and best use at the moment, an adjustment will also be made as to its income stream once any problems are corrected.

Income Streams

Income streams can come from a variety of places, so I won’t make any attempt to list all the various forms here.  There are some common ones and some unique to a given property.  Just remember that the income stream is made up of all money received through the property.
Expenses Paid Out
The other side of the cap rate equation is the expenses that must be paid on the prospective property.  There can be literally scores of different expenses, which can be found in any reasonable accounting course, so we won’t go into them here.

The Cap Rate Configuration

Now that we understand that the cap rate is determined by comparing income and expenses, the final part we need to factor in is the selling price of the commercial real estate.  We’ll use an example below:


Income                       Kshs.9, 000,000.00

- Expenses                 Kshs.4, 500,000.00

= Remaining               Kshs.4, 500,000.00

 Selling Price             45,000,000.00


Cap Rate = Remaining / Selling Price = Kshs.4, 500,000 / Kshs.45, 000,000 = 10%


Conclusion

Now you understand all the pieces of the cap rate formula and how to determine it.  Again, the cap rate is very important in commercial real estate transactions because it puts a number or “grade” on the value of the deal in simple and consistent terms for the investor.

The larger the cap rate, the better the deal is for the investor, so you can draw the conclusion that investors prefer high cap rates, and the higher the cap rate is, the more the investor likes the deal.

In fact, some investors set minimum cap rates before they’re interested in a commercial real estate deal.  So you understand why ‘Cap Rate is King’ in commercial real estate transactions. 


Get more tips on www.kenyan-real-estate.com




Wednesday 25 November 2015

Kenyan Property Real Estate - A Primer

When speaking with a group of real estate investors recently in Nairobi, the question arose as to how many of them have completed a commercial real estate deal in the last year, and surprisingly, the answer was none. It seems that many of them were either happy with the currently market conditions or they didn’t really have the aptitude to go about buying a commercial property.

Market specialization? No. It seems that the majority of real estate transactions go something like this: 

1. Residential real estate is the sweet spot of the small real estate investor.

2. Commercial real estate is typically left for the small business owner, who has decided to stop renting.

3. Both of these sectors of the real estate industry do have some crossover, but the previous two statements are typically the norm. So how exactly are commercial properties being bought, sold, being rented?  What’s the best way to acquire commercial real estate, and who you need to help you in doing an acquisition?

Here are five key points to consider:

1.    By far the most popular business entity for owning commercial real estate is now the limited liability company (LLC).

2.     Commercial real estate is a much less popular subject, in part, because it isn't as personal and doesn't tug at our own financial purse strings.

3.    Commercial real estate is a term to describe a property with 5 or more units. Commercial Real Estate is a critical component of any well-run business.

4.    Investing in commercial real estate is riskier and more costly than investing in residential property - but ultimately it can be far more profitable.

5.    Commercial real estate is a business investment driven by economic factors, not so much the property itself. 

Investing in commercial real estate can be a good way to invest but you should make sure you are well represented by an attorney and accountant before moving forward since buying commercial real estate can have significant tax consequences and if you're buying or developing commercial real estate, it's important to protect your financial interests with legal support. It may sound redundant, but the axiom location, location, location, is an important factor in buying commercial real estate too. Here is the key to buying commercial real estate: the one with the most information wins.

The winners are the people that recognize that the world of commercial real estate is constantly changing and understanding the nature of commercial real estate is a precondition to the timing question.  They also understand the data and realize that information is the most critical aspect of any transaction. In other words, the most valuable commodity you can have in the commercial real estate market is information. 


To find more on this go to www.kenyan-real-estate.com




Monday 23 November 2015

Kenya Property Investment: The big profits


Real estate is often termed as the safest investment avenue. In fact, real estate investments done with proper evaluation of the property (and its true value), can lead to good profits. This is one reason why some people pursue real estate investment as their full time job. The talks of real estate are generally focused towards residential real estate; commercial real estate seems to take a back seat. However, commercial real estate too is a good option for investing in Kenyan Real Estate.

Commercial real estate includes a lot of different kinds of properties. Most people relate commercial real estate with only office complexes or factories/ industrial units. However, that is not all of commercial real estate. There is more to commercial real estate. Health care centers, retail structures and warehouse are all good examples of commercial real estate. Even residential properties like apartments (or any property that consists of more than four residential units) are considered Kenya property investment. In fact, such commercial real estate is much in demand.

So, is commercial real estate really profitable? Well, if it were not profitable I would not have been writing about commercial real estate at all. So, commercial real estate is profitable for sure. The only thing with commercial real estate is that recognizing the opportunity is a bit difficult as compared to residential real estate. But commercial real estate profits can be real big (in fact, much bigger than you would expect from residential real estate of the same proportion). You could take up commercial real estate for either reselling after appreciation or for renting out to, say, retailers.

The commercial real estate development is in fact treated as the first sign for growth of residential real estate. Once you know of the possibility of significant commercial growth in the region (either due to tax breaks or whatever), you should start evaluating the potential for appreciation in the prices of commercial real estate and then go for it quickly (as soon as you find a good deal). And you must really work towards getting a good deal. If you find that commercial real estate, e.g. land, is available in big chunks which are too expensive for you to buy, you could look at forming a small investor group (with your friends) and buy it together (and split the profits later). In some cases e.g. when a retail boom is expected in a region, you might find it profitable to buy a property that you can convert into a warehouse for the purpose of renting to small businesses.

So commercial real estate presents a whole plethora of investing opportunities, you just need to grab it.



Kindly visit www.kenyan-real-estate.com for more exciting tips…

Friday 20 November 2015

Kenyan Property Investment Misconceptions

Commercial Kenyan Real Estate is a wonderful, exciting business that can offer a wealth of opportunity for those who look for it! Many people are often hesitant to enter such a market as commercial real estate for many different reasons. In fact, there are some major misconceptions about commercial real estate which I am going to address here.

Many people who hear about commercial Kenyan Real Estate, but aren't necessarily in the business, often use the expression “Location, location, location!” Many people associate this expression as the truth, that the three most important attributes about a Kenya property investment are “Location, location, location!”

I am here to tell you- this is absolutely not the case! Now, I am not going to say location is not important, but what if you have a beautiful location for a mountain resort, complete with snowy hills, a perfect location for a lodge, and beautiful mountain views? What you want to do to the property is improve it for a weekend getaway for romantic couples with a beautiful lodge, resort, luxury type housing, and perhaps some individual cottages overlooking the green forest. Sounds great, right?

The perfect location- you can't beat it! But, you learn that the zoning for this property is residential, R1, to be exact. The use is only one single family residence per acre, and no commercial property allowed. What happened to your “Location, location, location?” It flew out the window!

The most important aspect of a property is the use. What is it intended for by designation of the city or county? It does not matter where the property is, if you cannot get the zoning that is in the realm of your intended use.

It is possible to get properties rezoned, especially as cities change and grow. Be sure to consult with the city or county to determine if these changes are even possible, because you do not want to buy a property that you cannot rezone, and be left with an unprofitable property on your hands.

Most people believe that commercial real estate is complicated and you need a special education or know how to succeed in the business. Many think that commercial Kenya real estate is filled with international finance, heavy and complicated math, complicated tax rules, and forms and applications that are just too complicated to understand correctly.

I am happy to tell you this misconception is the worst, because it puts a road block in front of many people's aspirations to become a commercial real estate insider. Let me put this misconception to rest. There is math involved, and most of it is not at all complicated: simple ratios, adding, subtracting and multiplying. What is even better is you don't have to do the math. There are others who can do that for you. The same is true with property management, inspecting the property, and doing the year-end tax report. In fact, commercial real estate is less complicated than residential real estate because you can focus your energies on a single deal that will be worth perhaps 10, 20, even 50 residential deals and more!

Let me put it into perspective for you. If you owned a business (many of you may), would you create strategies, keep the books, manage the many locations, sell on the front floor, and take out the trash after the day was over? I think not! Commercial real estate is made up of many people whom are there to help you with whatever you need. You must position yourself as a real estate insider, which is a leader in the business.

Another misconception is commercial real estate is management intensive, that you must manage every property you own. Let me tell you when you end up owning 10 or more properties, this is almost impossible to do! You do not have to actually manage your properties yourself, so you can concentrate on creating more deals. Hire a company or set a team in place to take care of this “day-to-day” business.

As you can see, what is passed around in dialogue about commercial real estate is not always true. Before you take everything to heart, be sure to get your facts straight. In fact, many people in this profession speak about commercial real estate as a business in which only the savvy and sophisticated can succeed. They often act this way because they want to keep people out of the market by differentiating themselves. If you were in this position, you would too! 


Please visit www.kenyan-real-estate.com for more exciting stories on real estates.



Wednesday 18 November 2015

Kenyan Commercial Property: Commercial Real Estate Is Not for Ordinary People

People are naturally inclined not to trust what they don’t understand.  The same is applicable to commercial real estate investing.  It’s a natural phenomenon when confronted with something new, different or seemingly over your head.

But when it comes to commercial real estate investing, that belief can cost you a small or large fortune.

For instance, when I first got started in real estate, one of the biggest challenges I had to get past was the idea that commercial real estate was too complex for me.  That it was for the “big boys”.

Even residential real estate agents suffer from this same mindset.  They too believe that in order to break into commercial real estate they have to be promoted.

Nothing could be further from the truth.

For those with a determined mind to get involved in commercial real estate, the challenges are easily overcome able. 

But like all, myths the idea that commercial real estate investing is too complicated for mere mortals is grounded in a bit of fact.  Commercial real estate does seem complex.  

So let’s dispel this myth right now.

Would you file your own lawsuit?

How about fly your own jet?

What about do your surgery?

Or how about even filing your own tax return.

Would you do surgery on yourself?

I think you’ll agree these things are complex if you tried to do them on your own.  But ordinary people get them done every day.

So what’s the truth?

The truth is that the most successful investors, whether novice or experienced, use professionals and experts when some “heavy lifting” is required.  The details of tax, law and finance are better off left to them. 

If there’s one area where you should spend your time and become an expert in is the market where you have your real estate.  This is one area where you should spend your time.

Knowing your market, knowing the mindset and behavior patterns of your prospects will pay handsome rewards for your long term.

Leave the complex topics to the people who know how to deal with the complicated stuff.  That’s the best strategy for success for the up and coming commercial real estate investor.
So as you can see, there’s no reason to be intimidated by commercial real estate.  The benefits and advantages of investing in commercial real estate far outweigh the disadvantages or unforeseen complications you may occasionally come across.  And even then, there are experts who can support you in your efforts.  They are rather inexpensive when you look at it in this light. 

The only time they get expensive is when you try to do it on your own and then unintentionally make a mess.

Put these professionals on retainer and use them.  That’s what they are there for. 





Monday 16 November 2015

Kenyan Commercial Property Guide

Commercial Real Estate refers to the property that has potential to generate extra income for the owner of real estate. Commercial real estate generally includes office buildings, retail properties, apartment units, condos and raw land. Every property that can produce revenue for the owner is known as commercial real estate. It doesn’t include habitable real estate like houses or apartment buildings.

In 21st century, large number of people is generating income with commercial real estate. Commercial real estate business is based on certain principles. These principles are generally same for property owner, developer as well as for commercial real estate agent. Commercial real estate agent helps you to identify the best features of commercial real estate agent. Real estate agent enables you to make a finest deal of commercial real estate. Commercial estate agent is helpful to both buyers as well as tenants.

 You should choose best commercial real estate as per your requirements. Choose your property at best location that has great future. Commercial real estate at good location will offer more benefits in the coming days. You’ve to choose finest piece of land that you can use efficiently. You may select commercial real estate nearby high traffic areas that can be easily used for full-service restaurants, hotels, stores or other shopping malls.

 Investment in commercial real estate business is the best way to get more revenues. Always keep in mind that a right time investment is the best opportunity to earn more profits. You should consult financial advisors that will provide help to find the best commercial real estate. Investment in commercial real estate is good for large as well as small-scale businessmen.

 Buyers should check the reputation of commercial real estate provider. Before any type of agreement or purchase, they should check rate, terms & conditions, and other essential aspects of commercial real estate for the best deal. 


Don’t hesitate to visit www.kenyan-real-estate.com for more tips.



5 Bedroom House Lavington, Nairobi, Kenya

3 Bedroom Apartment in Hatheru Rd - Lavington, Nairobi, Kenya

3 Bedroom Executive Hempstead Villa in Lavington, Nairobi, Kenya

Friday 13 November 2015

Kenyan Commercial Property Definitions

Commercial real estate is distinctly different from residential real estate. The terminology is very different and here is a list of new terms from A to M.

Commercial Terms

According to Value: The value of the property when computing property taxes.

Build to Suit: A customized design and build approach for a single tenant space usually resulting in a single occupant building which is then leased or sold to the tenant.

Certificate of Occupancy: Issued by a city building department and is a necessary requirement prior to moving into the space.

Common Area Maintenance: Typically an annual charge assessed to tenants based on their percentage of occupancy to pay for maintenance of parking lots, bathrooms and open areas.

Demising Wall: A wall between two separate suites in a building with multiple tenants. In many states, the demising wall must meet specific fire safety standards.

Flex Space: A building providing mixed-use space such as an area combining an office and warehouse.

Gross Square Feet: Usually refers to gross footage of a building. GSF is typically arrived at by calculating the footage from the outside of exterior walls multiplied by the vertical footage.

HVAC: Refers to the climate control systems for a building including heating and air conditioning.


Mechanic's Lien: A legal claim typically filed by a subcontractor to obtain payment for services rendered. The claim arises under state law and is dependent on each states particular law.


Unlike residential real estate, commercial real estate is primarily considered a business transaction. Learn the terms and you're well on your way to moving smoothly through the process. 

Wednesday 11 November 2015

Kenyan Commercial Property Definitions

Commercial real estate is distinctly different from residential real estate. The terminology is very different and here is a list of new terms from O to Z.

Commercial Terms

Operating Expenses: Just as it sounds, operating expenses are those costs associated with operating a commercial property. Contract and state law typically govern the exact nature of the operating expenses.

Partition Wall: A wall built in the internal area of a suite to divide the general space. For instance, offices built during a tenant improvement project with have partition walls separating them.

Punch List: A punch list runs part and parcel with a walk through of completed construction work. The construction company and client will walk through the area and complete a punch list of items that need to be fixed or modified. 

Shell Space: The interior of a commercial building that has been completed, but does not yet have any tenant build outs. The shell space generally refers to this gross square footage regardless of whether tenant improvements have occurred or not.

Substantial Completion: Notice given by a contractor to the client indicating the property has been completed to the point where a walk through and punch list review are appropriate.

Usable Square Feet: The square feet in a building, suite, warehouse and so on that can actually be used by tenants. Due to building regulations and design issues, certain amounts of a space in a tenant suite may not be usable and such footage is excluded from this calculation.


Unlike residential real estate, commercial real estate is primarily considered a business transaction. Learn the terms and you're well on your way to moving smoothly through the process. 


Feel free to visit www.Kenyan-real-estate.com for more hints on Kenyan real estate sector.

Monday 9 November 2015

Curb Appeal Matters When Selling Kenya Real Estate



First impressions matter most. This is one concept that many homeowners trying to sell their homes and first time property investors trying to sell or rent property fail to understand. Curb appeal is the first impression when it comes to a house. This is the place that you as an investor or seller want those driving buy to think of as home. For this reason you should pay careful attention and spend some degree of time and effort making the outside of the home inviting and appealing to potential buyers or renters.

One of the first things that people will notice is crumbling paint and bland or tired and faded colors on the exterior. Vinyl siding is often inviting because it is easily cleaned and reinvigorated. It also happens to be fairly low maintenance, which often appeals to buyers and renters alike. There are those however who will argue that siding detracts from the potential personality of a home. To each his or her own in this as it is a personal decision on behalf of the buyer and the seller. Regardless a clean and crisp paint job or siding makes a much better impression than an apparent state of disrepair. 

Remember those first impressions are important. If the outside of the home is rather unimpressive potential buyers are quite likely to discover the diamond that is the inside of your home. Another thing you can do to add curb appeal is to plant low maintenance flowers and plants around the exterior of your home. You do not want to invest in plants that require constant care nor do you want to seriously invest in plants that are going to grow out of control and look unwieldy. At least you do not want to plant these around the exterior of your home that is facing the road. Bushes and climbing vines do well in many cases along fences that surround the property however or as a dividing privacy line between your property and neighboring properties.

If you live in an area that isn't conducive to green grass you may want to consider some sort of hybrid that can thrive with less water or choose some form of landscaping that doesn't rely on large open patches of grass in order to be beautiful such as xeriscaping then that is quite probably a wise idea. The point is to make the house as attractive on the outside as you hope those viewing the property will find the inside. 

Another thing to keep in mind when making the upgrades is to clean the sidewalks and driveway if it is concrete. It is amazing what a high power pressure washer can do to your sidewalks, driveway, and/or front porch. Don't stop there however; take the time to make sure your doors and windows are clean as well. These little things often make the biggest impression. If you care properly for the exterior of your home and keep it nice and shiny chances are (in the buyer's mind) that you will have taken the same care of the inside of the home that they are quite possibly now considering.

Taking the extra time to insure that the outside of your home is attractive to buyers can translate into higher and quicker offers than neglecting the essential real estate between the front door and the curb. Do not overlook this powerful piece of advice and you should enjoy a little more success in your efforts to sell your home or investment property. 

Visit www.kenyan-real-estate.com for more stories like this.

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