Of course this is a no-brainer, I was in fact very tempted to go this route because
1. Returns are higher
2. Need for parking and other costly amenities is next to zero
3. Cost of building is cheaper because you can go for the cheapest of the cheap finishings and may not even need to plaster your machine cut walls
4. Economies of scale given low fixed costs compared to returns.
5. Extra income from running businesses at the ground floor

But the reasons why I rejected this route

1. Slummification of entire neighbourhoods (and cities) starts with these buildings. Look at Umoja. Note exactly a great place to raise kids and live a decent life. Some of those apartments are like modern day tombs! Kenyans deserve better. This is why I laud Uhuru's low cost housing agenda. Quality subsidised homes for all.
2. Headaches to the landlord galore. general security issues, Tenant to tenant crime may be rife, eviction problems, blocked drains due to tenants pouring all sorts of plastics and things into the drains, vandalism and constant repairs are no joke. It is as management intensive as it gets and my life is too short to spend all my hours managing all these problems.
3. Cap gains are much lower per annum for these types of structures. What you gain in cash flows you lose big time in cap gains compared to say a guy who buys a 1/4 acre in a leafy area and builds a huge maisonette on it.

Bottom line, I would take decent 2br and 3 br flats, as well as 4+ br maisonettes any day over 1br blocks of flats despite the cash flows. Kenyans, seriously ask yourselves, do we want the whole country to look like this (below). If we are not careful, bila planning, that is the direction we are headed in.

Here is the current bedsitter development craze;

There is high demand for the bedsitters due to interest from students, newly employed people and slay queens! 😂😂

- lease land (50x100) at 30k - 60k per month for a min of 17 years
- put up approx 40 units of bedsitters at approx 200k - 300k each (total cost 8m - 12m)
- rent out the units at 8k - 12k (total monthly income - 320k - 480k)
- recoup your costs in 3 - 4 yrs and enjoy your rent for 14 yrs

* very important LOCATION LOCATION LOCATION
( current hot locations; Waiyaki Way, kawangware, Dagoreti, kiambu etc)
* due to competition include WiFi, DSTV, small gym and secure parking (mostly for sponsors 😂😂)

Pros
- you access a plot in a location that could be out of reach or unavailable for out right purchase
- you don’t tie your capital in purchase of land
- you get first priority to purchase the land if the owners want to sell the plot
- very simple and quick to put up (mostly without approvals)

Cons
- after the lease period expires you have to walk away and leave the development as it is

I know of guys/groups with numerous such set ups and raking in crazy amounts as rent every month

Happy investing