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The 9 Routes to Owning a Home In Kenya
Family Finance

The 9 Routes to Owning a Home In Kenya

Buying a home is a big financial step. The benefits of this type of investment are unmatched. As the housing market keeps exploding, homeownership has become the fastest way to build equity, save for the long term, build your credit and take advantage of government tax reliefs. 

As the real estate market keeps modernising in Kenya, owning a home has gotten easier. There are many options to choose from depending on your needs and goals. Understanding and selecting the best route will help you save money and time and ultimately avoid debt or losing your property.

So, when the time comes to own a house, what options are available? This article discusses nine top ways to own a home in Kenya, how to do it and what factors to consider when choosing your path. 

Read Also: Renting or Homeownership: How Do You Decide?

1. Buy a Built Home

This is the fastest and easiest way to own a home as it involves direct transactions. Once you notice a house on the market that you can afford and suits your needs, all you do is pay for it and complete the transfer of property paperwork. 

Buying a built home will require you to invest a lot of money into the property upfront. While you will save a lot more in the long term than if you had opted for other options like a mortgage, much of your money will be tied in the house initially. 

You can, however, borrow money against it if you need to get liquid later. You can afford to negotiate for lower rates with solid collateral like a house. 

Read Also: Should I Buy A House? 5 Signs That You Are Ready

2. Rent to Own

Also known as rent to buy, this method involves leasing a property for a specified period (months or years) with an option to buy the house when the lease is up. You will pay more in rent with the extra amount going towards the house's down payment. 

There are two types of agreements involved in rent to buy 

Lease purchase - You will be legally obligated to purchase the house when your lease expires. 

Lease option purchasing - You will have the option to buy the property or not when the lease expires. You can renew the lease or move to a different house if you don't buy the house. You will, however, relinquish the money you paid toward the home's down payment. 

This option is suitable for someone who doesn't want to purchase a house outright or pay hefty down payments since it is spread out and you don't pay interest. 

However, you should be careful as it can expose you to losses and legal disputes if you or the seller cancel the contract. 

3. Build from Scratch

In this option, you will be required to buy land and contract a consortium of construction experts from architects, engineers, plumbers, electricians, etc., to design and build a home from scratch. 

This method will ensure you construct the exact house you want. You get to decide the timeframe of the construction, and you can oversee the entire project from start to finish. If done carefully and correctly, it can help you save money. 

The option can be time-consuming as it will require you to take breaks from work to buy materials, supervise laborers, and ensure everything is going to plan. 

4. Cooperative Housing Societies 

This option involves buying a home through housing societies that partner with investment groups and SACCOs to offer home loans to their members. 

The cooperative housing society will offer different types of house ownership from loans, rent to buy, affordable housing, group loans, and mortgage refinancing. 

The option is suitable for people in registered SACCOs or other joint investments group. You can access properties and pay less in interest and monthly payments. When choosing a cooperative, ensure they are NACHU registered. 

5. Off-Plan Properties 

This method involves buying a house before or during the construction, mostly from real estate agencies and housing cooperatives. You will most likely be required to pay a deposit and spread the rest of the payment as the construction is ongoing. 

Buying off-plan homes allows you to purchase the property below its market value. The houses bought through this method are mostly in gated communities or apartments. 

Before buying your home through this method, conduct proper research on the developer to ensure their trustworthiness, check their track record, and study the project's viability. It is easy to lose money or end up with low-quality houses when buying off-plan properties. 

6. Inheritance/Endowment 

This method involves passing down property ownership from one person to another as a gift when the owner is alive or as an estate when the owner has demised. 

The method is straightforward and will only cost you the charges associated with property transfer. 

If you are receiving the property from someone who isn't an immediate family member, you will be required to pay capital tax gains when transferring the house to your name. 

Read Also: Family Finance: How to Make the Most of Your Inheritance, Avoidable Mistakes

7. Boma Yangu Housing Programme 

This is a government-sponsored initiative that offers off-plan property purchasing options. Participants are chosen on a first-come, first-serve basis on the Boma Yangu portal

To get started, you will pay contributions towards your 12.5% down payment and after which you will be enrolled in a tenant purchase scheme when you receive a house. You will pay the remaining amount as rent over 25 years typically. 

8. Joint Venture 

This process involves partnering with a real estate developer to construct your home and then pay them rent over a specified number of years. It can also involve a developer building several housing units on your land and offering you some of the houses or profit generated from the properties. 

This process is suitable for a person with prime land who lacks the financial muscles to undertake massive projects. It can also help them save money and time as the developer will oversee the project. 

When using this option, ensure you partner with reputable developers. 

9. Mortgage 

This method involved borrowing money from banks or other lenders like SACCOs to buy or construct a house. The house you purchase will act as collateral as you repay the loan and interest accumulated. The interest can be fixed or variable per your agreement with the lender. 

You will be required to pay a down payment of the house, which is usually above 5% of the property value, with a promise to repay the rest in monthly installments for a specified number of years. 

The option is suitable for homeowners who don't want to tie a lot of money in one investment, don't want to pay rent, or don't have enough to buy their dream house in cash. 

Even though the house will appreciate, an increasing interest rate will have you pay above market value and there is a risk of losing the home if you default on the loan.

Factors to Consider Before Buying or Building a Home

With so many options available on the path to homeownership in Kenya, you must take one that completely aligns with your goals. Here are four things to factor into your decision-making process. 

Budget: The amount you want to spend on a house will determine your path. Using the Boma Yangu initiative will likely be cheaper than buying a home directly from the market. 

Time frame: How quickly do you want to own a house? Buying an already built home will take a few weeks for the entire process to be completed, while a Housing Cooperatives Society or off-plan options will take longer. 

Intentions: Are you building the house to generate income or to live in it? For example, Boma Yangu is not available to buy for commercial reasons, and you can only sell it after you've completed the payments. In contrast, Joint Ventures will favour investors looking to rent out their properties. 

Location: Where you choose to build your home will influence how you do it. For example, joint venture developers are primarily interested in prime areas, and if you decide to develop in the countryside, you will have to build from Scratch. 

Read Also: Where Should You Own a Home? Upcountry vs. Urban Living


Buying a house can be a tedious process. You have to be wary of con artists and brokers who are always lurking for opportunities to steal from you. For a first-time homebuyer, you should consider retaining the services of reputable real estate agents to guide you.

With many options available, you should take time to study each, weigh the cons, and settle on the option you can afford, one that makes the most sense financially.

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Farah Nurow is an experienced Content Writer who enjoys writing creative and educative articles meant to provoke readers' thoughts. He loves sunny weather and thick books. You can connect with him on LinkedIn.

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