Increasing your land’s resale value
With coming of water and power connection and grading of roads, the place assumed a new face with the value of land shot up. GRAPHIC | NATION
What you need to know:
- Mr Sisa says it is important to know learn as much as possible about a parcel of land before buying it.
- He says some investors miss out because they buy land and just hold on to it. “There are ways such land can generate income like leasing out,” he says.
The craze for land in Kenya is amazing, with even tiny pieces selling like hot cakes, if the flood of adverts in both the traditional and social media are anything to go by.
Speculators are cashing in hoping to make a killing as the value of land continues shooting up. Mr Francis Karanja, who lives in Nakuru, is one speculator who is smiling all the way to the bank.
Mr Karanja, who is in his mid-forties bought an eighth of an acre at Umoja Estate in Nakuru in the mid ’90s for a few tens of thousands but recently sold it for Sh1.5 million.
At the time, the place was underdeveloped, and when it was subdivided and put up for sale, not many people were interested in buying the plots. When Mr Karanja acquired his, an eighth of an acre was selling for as little as Sh50,000.
The place was dotted with eucalyptus tree stumps, making it unappealing to potential buyers. It took long to develop his piece and put up a semi-permanent structure. With coming of water and power connection and grading of roads, the place assumed a new face with the value of land shot up.
RESALE VALUE
Similarly, Phyllis Nyokabi, a dealer in vehicles and automobile spare parts, bought a plot at Pipeline on the outskirts of Nakuru town, not far from the Nakuru-Nairobi Highway, which was then valued at a modest Sh300,000 five years back. She developed it and put up a big house, and its resale value is not Sh10 million.
Gaston Sisa, a real estate dealer, notes that if you buy and develop land, you increase its resale value. He says investors who buy blocks of land before subdividing them for sale could make even more if they took the trouble to develop them, first.
“Some are in business of making a quick shilling,” he says. “If, for example, the investor endeavoured to bring piped water to the place, connected it to the main electricity grid and develop good access roads, the value of the land would certainly appreciate.
“Because of the cost of developing land, a buyer is most likely to look for a place with say, electricity, water, and roads, and it is upon the investor to make the place attractive,” he says.
If you take the case of Mr Karanja’s undeveloped land, for instance, it can present the buyer with a number of challenges. Besides, you might find that such a plot has huge boulders under the surface, which mean developing it would be costly .
Mr Sisa says it is important to know learn as much as possible about a parcel of land before buying it.
He says some investors miss out because they buy land and just hold on to it. “There are ways such land can generate income like leasing out,” he says.
He, however, notes that there are valid reasons for not developing land. For instance, if the development is not going to earn the owner what he or she anticipates, then there would be no use developing the land.
“As an investment, it must have returns. and for an investor, the timing must be right. If it is not the right time you will have to wait,
And it pays to get land in a good location and also engage professionals like real estate agents who can advise you on what is best.
