Investing in Kenya: A Complete Due Diligence Checklist
As an aspiring investor venturing specifically into the real estate and construction space in Kenya, the first step is always due diligence. How you conduct this diligence matters; otherwise, you may end up doing the right checks in the wrong way.
Whether you want to buy an existing property or build one, it is very important to be clear about what exactly you want to achieve. The starting point is always, and I repeat, always get a reliable local partner. Not everything is available on the internet, and even where information is available, it still requires good execution intelligence and practical application on the ground.
Firstly, Kenya and the greater East Africa region have relatively good political stability and this may vary depending with the specific region in the country. That being said, we are all developing nations, so it is very important to plan for the long term and pay key attention to risk.
Risk does not necessarily mean political instability. It can also come from inconsistency in the systems that are supposed to protect you. Laws change with governments such as taxation, material prices etc. All these factors can affect your overall ROI.
Secondly, understand the real estate value chain in the host region. It all begins with land and ends with property management. Some areas have different approaches to land ownership while others have different physical planning and land use laws.
Thirdly, is the market as a whole approached from a long term perspective. Whether its on competition, infrastructure expansion, human capital and overall Government policy. Its also important to acknowledge the respective local community as part of the investment.
The best way to settle even anywhere in Africa and shield yourself from most avoidable risks is actually to make the people part of the investment. Are you bringing credible jobs? Are you solving a community problem? Are you using local labour and suppliers? Do not always look at the financial gain because it may not be sustainable in the long term. This is still a growing market, and investments that create value around them are more likely to remain relevant.
Finally, as per common knowledge while operating in any developing economy is to plan for a safe exit strategy. You can easily change your business plan along the way. Market conditions change, consumer preferences change and new opportunities emerge. Flexibility is therefore very important as you adjust accordingly.
In conclusion, property due diligence, the right local partners and professional investment facilitation can help you identify risks early, structure the opportunity properly and protect your capital throughout the development journey.
The best way to settle even anywhere in Africa and shield yourself from most avoidable risks is actually to make the people part of the investment.
For more information, reach out to us via info@rickfes.co.ke
At Rickfes Construction, we offer investment facilitation and real estate development consultancy to investors looking to invest in Kenya. This can involve helping you assess an opportunity, conduct feasibility studies, identify suitable professionals, navigate development requirements and coordinate the project through construction and delivery. We are the local support on the ground, on your behalf.
