Diaspora Investing in Kenya – Real Estate Investments

If you’re Kenyan but living abroad, you might have thought about investing in property back home. Kenya’s real estate market is changing fast and holds opportunities for you to make money and stay connected to your roots.

In this blog, we’ll explore how you, as part of the Kenyan diaspora, can invest in real estate. Whether you’re looking to secure your future, grow your savings, or strengthen your ties with Kenya, this guide will help you understand how to get started in the world of property investment.

Diaspora remittances to Kenya

There are about four million Kenyans living and working abroad who are important to Kenya’s economic growth. They are living in countries like the United States, the United Kingdom, Canada, Uganda, Australia, and Europe.

Despite the vast distances, divergent time zones, and cultural variations, the Kenyan diaspora maintains a strong connection to their homeland. Notably, the financial support they send back home, often referred to as remittances, has shown consistent growth over the past decade and a half.

As per a recent report from the Central Bank of Kenya, diaspora remittances surged by 8.34 percent in 2022, reaching a remarkable $4.027 billion. This places remittances close to the earnings from key economic sectors such as tourism, tea, and horticulture, which collectively contributed $5.77 billion in foreign currency.

The Central Bank also reported that more than half of these remittances are used for three things; real estate (buying land and buildings for the recipients), mortgages, and buying food and things for the house.

Reasons Why Kenyans Move to the Diaspora

Kenyans, like people from many other countries, relocate abroad for a variety of reasons. Some of the common reasons Kenyans choose to move abroad include:

• Economic Opportunities: Many Kenyans seek better job opportunities and higher earning potential abroad. They may move to countries with stronger economies and job markets to improve their financial prospects.
  
• Education: Pursuing higher education is a significant motivator for Kenyan students and their families. Studying abroad can provide access to prestigious institutions and a wider range of academic programs.
  
• Family Reunification: Family reunification is a common reason for migration. Kenyans who have family members already living abroad may relocate to be with them.
  
• Entrepreneurship and Business Opportunities: Kenyan entrepreneurs and businesspeople often seek international markets and opportunities to expand their businesses. They may relocate to countries with more favorable business environments.
  
• Retirement: Kenyan diaspora members who have spent a significant portion of their working lives abroad may choose to retire in a country where they have established roots or where they believe they can enjoy a higher quality of life.
  
• Family and Marriage: Marriage to a foreign national or having family members who are citizens of other countries can be a reason for relocating abroad.

It’s important to note that individuals may have multiple reasons for their decision to move abroad, and these motivations can evolve over time. Additionally, the specific reasons for migration can vary widely among individuals and may be influenced by personal circumstances and opportunities available in destination countries. 

How Kenyan Diaspora Can Invest in Real Estate

• Set Clear Investment Goals: Begin by defining your investment objectives. Determine whether you’re seeking residential or commercial property, your investment horizon and whether you prefer vacant or developed land. Clear goals lay the foundation for your investment strategy.
  
• Choose the Right Location: Location is key in real estate. Assess growth potential, accessibility, amenities, and nearby developments. While abroad, use tools like Google Maps or rely on trusted individuals to scout potential locations. Reputable real estate companies like Username Investment Limited can provide valuable insights.
  
• Engage Real Estate Professionals: Collaborate with licensed experts throughout the process. A lawyer can handle legal agreements and document signings, while a valuer estimates property value and a surveyor confirms boundaries.
  
• Seek Answers and Assurance: Don’t rush into a deal if you have concerns. Living abroad may lead to worries about property authenticity or suitability. Ask questions, request virtual tours or videos, and seek expert guidance to address any uncertainties.

Kenya Diaspora Investment Fund

Kenya introduced its very first officially licensed investment fund for its citizens living abroad. This move is aimed at encouraging Kenyans living abroad, part of the Kenyan diaspora, to invest their money back in their home country.

Kenyans overseas already invest in various sectors such as real estate, retail, agriculture, and technology, among others. That’s why it’s crucial to establish a solid system to ensure these investments are successful.

This investment fund provides Kenyans abroad with the necessary information to identify and assess investment opportunities, even when they are far away. It allows them to invest through a trusted and regulated organization.

African Diaspora Asset Managers (ADAM), is the investment firm that has been granted the first license of its kind for a diaspora fund by the Capital Markets Authority.

However, it’s important to remember that while investing in property can be very valuable, it’s vital to understand the details of the real estate industry to avoid making poor decisions that could lead to financial losses.

Real estate investment opportunities for Kenyans in the diaspora 

Kenya is marked by rapid urbanization, economic growth, and infrastructural development, and because of that, real estate stands as an ever-enticing avenue for investment. 

The opportunities are as diverse as the diaspora itself, catering to a spectrum of investment objectives and financial goals.

Whether it’s the aspiration to own a piece of Kenya for personal use, generate rental income, or participate in the growth of the nation’s urban centers, the Kenyan diaspora finds itself at the crossroads of real estate investment possibilities. Some of the potential investment opportunities in Kenya include:

• Residential Properties: Purchasing residential properties, such as houses or apartments, can serve two primary purposes. It can be for personal use as a home for you or your family when you visit Kenya. Secondly, these properties can generate rental income. Kenya’s urban areas are experiencing population growth and urbanization, leading to a thriving rental market. This option can provide both a place to stay during visits and a source of passive income. Here are some of the real estate projects you can invest in.

• Commercial Properties: Investing in commercial properties offers a different avenue for rental income. This includes office spaces, retail outlets, and warehouses. Busy urban areas, such as Nairobi, often have a strong demand for commercial properties. They can provide stable rental income and, in some cases, longer-term lease agreements with businesses.
  
• Vacation Homes: Some members of the Kenyan diaspora choose to invest in vacation homes. These properties can serve as personal retreats for you and your family when you visit Kenya. During periods when you’re not using them, you have the option to rent them out to tourists, generating additional income.
• READ ALSO: How to Start an Airbnb Business in Kenya and Make Money
  
• Land Acquisition: Buying land in Kenya, especially in areas with growth potential, is a long-term investment strategy. As Kenya continues to develop, land value tends to appreciate. This can be a way to secure an asset that may increase in value over time. You can hold onto it as an investment or eventually develop it.
  READ ALSO: A Beginner’s Guide and Legal Process to Buying Land In Kenya
  
• Real Estate Development:  For those looking for potentially higher returns and willing to take on more significant projects, real estate development is an option. This involves investing in the construction of residential or commercial properties. It can be done independently or through real estate investment groups. Returns often come from selling the developed properties or earning rental income.
  
• Student Housing: Kenya has a growing student population, leading to a consistent demand for student housing near universities and colleges. Investing in properties in these areas can be lucrative, especially when managed efficiently. Student housing often provides a steady stream of rental income.
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• Affordable Housing Initiatives: The Kenyan government has initiated programs to promote affordable housing. These initiatives may create investment opportunities for those in the diaspora. Investing in affordable housing projects can not only yield returns but also contribute to addressing housing needs in Kenya.
  READ ALSO: Boma Yangu Project – Affordable Housing Program in Kenya
  
• Shopping Malls: Kenya’s expanding middle class has increased the demand for modern shopping facilities. Investing in shopping malls in urban centers can be attractive due to the potential for rental income and the consistent flow of tenants, including retail businesses.
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• Agricultural Land: For those interested in agriculture or agribusiness, investing in agricultural land is an alternative option. It can provide opportunities to engage in farming activities or lease the land to agricultural ventures. This can diversify your investment portfolio and contribute to food production.

Each of these real estate investment opportunities has its own set of advantages and considerations. The choice should align with your financial goals, risk tolerance, and investment strategy. It’s advisable to conduct thorough due diligence and seek professional advice when pursuing any of these options.

READ ALSO: What Foreigners Need to Know to Buy Land