Investment on land

Looking at the long queue of investors who recently turned out at the Kasarani Sports complex for the Ekeza Sacco general meeting, one could easily spot several young citizens. And when interviewed, their diverse vibes revolved around one common issue. That they invested to be able to buy some land on which to put up residences. The quest for land and property by young Kenyans, particularly those in urban areas, therefore needs good attention. In some cases, this has been seized by some of the unscrupulous vendors offering plots and houses for sale rather unfeelingly.

By the time most young Kenyans scour the market for land or houses to buy, they will have gone into great lengths to make a saving. Sacrifices will have been made on leisure, food and holidays. They will have kept away from extravagant company, carefully navigated around many demands from relatives and friends, and have had to tolerate binding monthly payments to landlords. It’s therefore cold and callous of anyone who entices them into deals that later sink their savings or aren’t good value for their money. Young Kenyans need a hand as they invest their initial earnings in land or houses, else they live to rue these early sacrifices and decisions. So what are some of the obvious pitfalls and challenges to beware?

Savings and Credit Cooperatives (Saccos): Low interest rates

First, Saccos are very good vehicles around which young Kenyans can save and accumulate money. They offer rather familiar and friendly institutional faces and also provide loans at comparatively lower interest rates. They were the vehicles of choice for most working Kenyans in the past. They remain good options. That they are ready to offer members loans based on their deposits, membership and guarantees by their fellow colleagues makes them premium options. So those keen on buying land and property as a first bet mustn’t ignore this option. This is why there mustn’t be any let up by the State in policing and regulating the thousands of Saccos countrywide. Lately, chamas, which are organised informal groups of people who try to emulate the Sacco model by collecting regular deposits as they socialize, have joined in. But until they enjoy some legal framework, such groups remain social and informal vehicles without guaranteed mechanisms of securing the collected deposits. But both of these groups have taken great interest in buying land and subdividing it for their members. This is fine. But young investors must watch out for the following.

Limiting distances

A good bottom line is the location of the property. If the subject properties are far away from their places of work, good judgment will be required. Because this comes with challenges of travel! So whereas senior citizens can easily go live out there without worries of routine travel, not so the young ones. Moreover, such senior Kenyans may not even be keen on living in such places, but only holding their surplus money therein or pumping it in for speculation. Where young investors buy plots intending to build and occupy, it’s important to interrogate whether other neighbouring buyers have similar plans. They wouldn’t want to find themselves all alone in some vast zone out of town. This could become a security nightmare; yet waiting till enough people move in could see one lose the value of their money at a critical moment of personal growth.

Mind security and service infrastructure

Where properties are within friendly commuter distances, young Kenyans must interrogate aspects like security, availability and quality of infrastructure such as access roads, water, power, internet, medical outlets and schools. Because these are absolutely critical to young families in today’s world! I have witnessed people having to leave their cars far away when it rains and walk home through difficult and thick clay or loam soil in gumboots. And without nearby quality schools, driving young ones to nursery and primary schools elsewhere could turn out difficult, expensive and limiting.

Ensure free head title and due process for subdivisions

Where the above check out well, then the following become moot. If the property has had to be subdivided, one must ensure that due process had been followed. This includes planning and respecting zonal plot sizes, surveying and amendment of the necessary maps in government offices and registration of the resultant subplots in the applicable government land registry. Quick due diligence and searches in the respective government offices will affirm the above. Many young investors have avoided this and found themselves with plots to which they won’t get any titles soon or ever. Reasons could range from impermissible plot sizes, charged head titles to default in the payment of land rent premiums and rates and hence restrictions on any dealings on the head title or lease. But where due process is followed, planners will advise on applicable plot sizes and the pursuit for subdivision approvals will have revealed the status of any statutory payments.

Use of registered professionals

Some Saccos and chamas have been known for using unregistered professionals, ending up with plots which haven’t undergone the above due process. This practice overexposes members and young Kenyans mustn’t allow themselves to get entangled in such situations.

Dated: 26th February, 2019