REVEALED: Types of Rental Houses With the Biggest Profit Margins for Investors

Hello Moneymakers, Kubasu here. In this newsletter, we are covering the types of rental houses with the highest profit margins, and the Kenyan Government’s Ksh6 billion payment to a French firm despite cancelling the contract.

Big Rental Profits

If you are looking to invest, real estate is probably among the top choices you should consider. A report by the Kenya National Bureau of Statistics (KNBS) titled Economic Survey 2025 indicated that 88.8 percent of residential properties on offer in the 2023/24 financial year were rented out during the year.

Why This Matters: The survey showed that the real estate sector is a fundamental driver of economic growth. Its indicators play a pivotal role in informing housing sector planning, financial stability, and economic policy formulation.

Breakdown: According to the survey, two-bedroom townhouses (median monthly rent of Ksh 120,000) had the highest gross rental yield at 8.3 percent, followed by three-bedroom maisonettes (Ksh 140,000 median monthly rent) at 8.0 percent. Three-bedroom townhouses (rent of Ksh 130,000) and three-bedroom apartments (rent of Ksh 75,000) tied with a gross rental yield of 6.7 percent.

Student hostels, on the other hand, had a return of 6.2 percent, followed by four-bedroom townhouses (5.9%), two-bedroom maisonettes (5.8%), three-bedroom bungalows (4.5%), and four-bedroom apartments (4.4%).

Bedsitters and studio apartments had the lowest return at 2.2 percent, followed by two-bedroom bungalows at 2.5%, and four-bedroom maisonettes at 3.8%.

"The monthly rent for a two-bedroom and a three-bedroom townhouse was Ksh 120,000.0 and Ksh 130,000.0, respectively, which were the highest compared to other types of property of similar size," the survey indicated. "A bedsitter/studio was rented for an average of Ksh 8,500.0 per month. Further, the monthly rent for one-bedroom and two-bedroom apartments was Ksh 15,000.0 and Ksh 28,000.0 per month, respectively."

Occupancy Rate

All rental house categories performed above average in terms of occupancy rate. All two-bedroom maisonettes and three-bedroom townhouses that were advertised ended up being leased out (100 percent) during that period.

Overall, 13 of the 15 house categories were over 70 percent occupied during the period. Only student hostel single rooms and two-bedroom townhouses performed abysmally, at 50 percent each.

Here are the top stories in business this morning;

Kenya Will Pay French Firm Ksh6 Billion Despite Cancelling Contract

As reported by Business Daily Africa, the Kenyan government is set to pay a consortium of French contractors Sh6.2 billion due to the termination of the Nairobi-Nakuru-Mau Summit Toll Road project. This payment will contribute to the increasing financial obligations on Kenyan taxpayers resulting from cancelled infrastructure projects.

According to disclosures from the Treasury, these termination costs are scheduled to be settled before the conclusion of the current financial year, which ends in June. Sources familiar with the matter informed Business Daily that the payment is anticipated to be processed before the end of the current month.

Kenya Seeks Sh3.4 Billion Israeli Loan for Missile Defence System

The Kenyan Government is gearing up to Ksh3.4 billion loan from Israel to partly fund a high-tech missile defense system. This is Kenya's effort to shore up its security apparatus. A report by Business Daily indicated that the agreement was part of the 2025/26 budget estimates currently before the National Assembly.

Businessman Asked to Surrender Over MP’s Fatal Shooting

The Directorate of Criminal Investigations (DCI) asks businessman Philip Nahashon Aroko to surrender immediately to the nearest police station, naming him a person of interest in the ongoing investigation into the brutal murder of Hon. Charles Ong’ondo Were.

In response, the businessman, through his lawyer Danstan Omari, promised to present himself at Gigiri Police Station and surrendered on Wednesday evening, according to The Standard. Were was shot dead in Nairobi.

Kenya Bans 50 Harmful Pesticides

According to Agriculture and Livestock Development Cabinet Secretary Mutahi Kagwe, the Kenyan government has banned over 50 harmful pesticide brands, especially those already prohibited in their originating countries. Speaking in Molo, Nakuru, he stated that this action is part of a broader effort to encourage the use of safer, locally produced alternatives.  

To support this initiative, the CS announced plans to significantly expand pyrethrum farming across the country, from the current 10,000 acres to over 70,000 acres. As reported by The Standard, this expansion is expected to boost domestic pesticide production and generate substantial employment opportunities for Kenyans. Kagwe's announcement was made during the launch of the distribution of one million clean pyrethrum planting materials.