The Ksh2 Million Mistake That Taught Me Rental Investment Isn’t Always Easy

In 2019, at 34, I felt like I had finally cracked it. I was a senior sales officer at an insurance company. That year, I brought three fast-growing startups onto our health insurance cover.

It was one of those career seasons where everything you touch turns to gold. By December, my commissions had hit Ksh2 million.

For the first time in my life, I wasn’t thinking about how to survive the month. I was thinking about legacy.

I already had Ksh600,000 in savings. My Sacco deposits were healthy. I had no major debt. So when I went home to Vihiga that December, I started dreaming bigger. I didn’t want to blow the money in Nairobi on lifestyle upgrades. I wanted something that would generate income long after the commissions stopped.

Rentals felt obvious. Our family land is quite vast, and I had a portion that could comfortably hold a few units. I didn’t need to buy land, which in my mind meant I was already ahead. That logic alone convinced me this was a “safe” investment.

Also read: He Built a Mansion in Kiserian, Went Back to Renting in Just 2 Months

I approached my cousin, an architect, and for the next three months, we worked on designs and approvals. By the time the paperwork was done, I had spent about Ksh200,000.

In March 2020, I broke ground. Then Covid happened.

Ironically, the lockdown worked in my favour at first. Nairobi shut down, and I was in Vihiga. I had to work remotely. I supervised construction daily. I was on-site almost every afternoon after logging off. 

I built three one-bedroom units. The team was small, and because we were in a rural interior area, the project was not heavily disrupted. By December 2020, the rentals were complete.

I stood there looking at the finished units and did the math in my head. Ksh12,000 per unit. Three units. Ksh36,000 per month. In five to six years, I would have recovered my investment. After that, it would be passive income.

Or so I thought.

The first shock was silence.

No rush of tenants. No phone calls of potential tenants fighting over space. Just a few curious inquiries that never materialised into deposits. The same interior location that had helped me build quietly during Covid was now working against me.

Also Read: Becoming a Landlord in Nairobi Without Owning Land: Leasing to Build Rentals 

The houses were simply too deep in the village.

Most people who could comfortably pay Ksh12,000 preferred to be closer to the main road, shops, and transport. The ones willing to live that far in were negotiating hard.

“Can you do Ksh9,000?”

“Business is down because of Covid.”

“I’ll pay half now, balance later.”

I resisted at first. I had my projections. I had my five-year recovery plan. But an empty house earns zero.

Eventually, I reduced one unit to Ksh9,000 just to get an occupant. Even then, some tenants defaulted. I would get stories about delayed salaries, hospital bills, and struggling businesses. And because we were in a small community, it’s not easy to be ruthless.

Vacancy became my biggest expense.

Months would pass with one or two units empty. Suddenly, my Ksh36,000 expectation looked like a fantasy. Some months, I would collect Ksh18,000. Other months less.

That is when the real lesson started to sink in. I had built based on an assumption, not demand. I had assumed that because housing is a basic need, it would automatically fill up.

Real estate doesn’t forgive poor location decisions.

Even today, I still struggle to consistently attract tenants who can meet the Ksh12,000 target. The structure is solid. The finish is good. But location trumps everything.

If I could redo it, I would have spent more time doing uncomfortable research. I would have talked to local agents. I would have walked around competing rentals to see their occupancy levels. I would have been honest about pricing instead of projecting Nairobi logic onto a rural market.

Today, I still believe rentals can build wealth. But they are not magic. They are businesses. And businesses must be built where customers already exist — not where we hope they will come.