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Rental properties can provide a steady source of income while you build equity in a property. In addition, the property may appreciate in value, and you may be able to enjoy certain tax advantages along the way. Here’s a look at how the process could work.

 It Takes Money to Make Money

You’ll have to make an investment to generate cash flow from rental properties. Although mortgage interest rates are still favorable, you will need to come up with a down payment that could range from 20% to 30% for investment properties. Of course, you’ll have recurring expenses, as well. Factor in your mortgage, taxes, landlord-specific insurance policies (both property and liability) repair and maintenance costs, and unexpected expenses related to your tenants – such as legal fees incurred as a result of a problem tenant.

Time Factor.

It can take a few years to generate a stable and positive cash flow from rental properties. The price you set for rent is an important factor, and one that will affect your bottom line. If you charge too much, you may not find a tenant; charge too little and you might not generate enough cash to make ends meet. When figuring out how much to charge for rent, try to find a number that allows you to:

  • -Cover your operating expenses (mortgage payments, property taxes, insurance, maintenance, utilities and administrative costs)
  • -Earn a reasonable return on your real estate investment
  • -Be competitive with the local rental market

It’s important to consider the supply and demand for your area’s rental market. If the rental market is flooded with properties, you may have to decrease the rent to attract tenants; if demand is high and people are having a hard time finding housing, you may be able to set a higher (yet still attractive) rate.

Where To Buy Land For Rentals?

Look for areas still growing other than already congested, we prefer to you areas like Kitengela, Athi river, Kangundo road,Utawala or Mlolongo/syokimau. Our company has a high profile duty to ensure you live and love your retirement era,

Visit us at Afya Center building 10th floor in Nairobi and start plans for your retirement.

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