A 3-bedroomed master ensuite bungalow 150m from magadi road in ongata rongai. A walking distance from Tuskys. Has a perimeter wall, cabro-paved driveway and parking, a barbeque garden with mature trees, in-built wardrobes and kitchen cabinets.

Asking price kes.7.5m negotiable.

The owner loves the place and would wish to continue living there as a tenant. He is preferring to sell to an investor from whom he can lease it back. However, he can still move out if he gets a good deal.

To sweeten the deal, the new buyer can deduct one year's rent from the purchase price. Rent in the neighbourhood is kes.35k per month.

Can share more details on e-mail with anyone who might be interested.

Owner sounds very attached. Will he and mama watoto agree to be evicted if they default ama it will be drama.

@sparkly, he is a very organised chap. He has been building another house elsewhere and I suspect the chums have ran out.

Show me any real estate worth 7.5m that can fetch a rent of 35k.

At the risk of hijacking this thread, please comment on a one bedroomed apartment within Kasarani area going for 3.2M and has an income of 15000.

Do you think this is a good investment.

@Pablo, that's Kenyan real estate for you. Consider this;

1. South B cost-16m rent 50k roi-3.7%
2. Lavington cost-20m rent 100k roi - 6%
3. Mombasa road cost-10m rent 40k roi- 4.8%
4. Ngummo cost-14m rent-45k roi 3.8%.

Agreed 5% yield on rent is very good. However, you seem to forget that there is also capital growth. Property price appreciation in Kenya has been stellar since year 2000.

If you did get a mortgage at 12% add miscellaneous 2% for repairs, letting fees etc giving us a total of 14% expenses.

Rental yield of 5% and add a conservative 20% increase yoy of price escalation of your property which give us a total of 25% (very conservatively) and you get a net effect of +11% net.

This 11% net of all costs is very conservative and from what I have seen, it's usually much higher. Granted, the effect of the mortgage, just like any other loan can take a toll.

That's what's wrong with the Kenya real estate industry. Buyers being shafted right left and center. And this is for cash buyers. Factor in mortgage and you have negative ROI. Like for the south B house above, your ROI will be approximately -8%. Yes, NEGATIVE EIGHT PERCENT. You have to be high on wet bhang soaked in petrol to even consider some things!!!

For me, real estate investment is a no brainer. NO MORTGAGE, NO BUYING!!! Raise money and build! Then you can make money.

At the very least, developers sell houses at double the total cost put in. Then mortgage will at least triple that value! 6 times a slave. 30 years a slave.

Why buy a house and make 5% ROI???

If you dream is to eventually own a house in that area, simply buy a plot in the same neighbourhood and put the rest of the money in a better yielding investment. For crying out loud, even a bank will give you double that ROI on fixed deposit account!!! And there are much more lucrative investments than fixed deposit any how!

Or worse, you find out the house is still his. You were played big time!!! Or he sells it again. And again. And again. And again....

This is Kenya!!! Remember???