Real Estate Investment opportunities in Kenya. Hostels.
Real Estate investment opportunities in Kenya can be found in residential for sale, residential for rent, hotels, hostels, learning institutions, homes for the aged, hospitals, offices for sale, offices for rent among others.
Hostels are bedsitter like type of rooms built near Universities and colleges for student accommodation. The students share a 3.5 m by 4m room . In most cases in Kenya, the sharing per room is done by 2 people.
Most hostels tend to separate men from women . Food is served in a common dining area near the Kitchen.
The average rent per student per month is between kes 2,000 and kes 3,000 sharing 2 students of the same sex per room. As society becomes more liberalized, decisions regarding same sex sharing will most probably be reconsidered.
In most hostels serving Kenyatta University in Juja, the rooms are self contained, with a toilet and shower. A few hostels have communal showers but the rent is quite low compared to self contained hostels.
There is an administration office that is manned 24 hrs within the hostel so as to address the various issues facing the students.
Return on Investment.
| Cost Item |
Kshs |
% |
| Land |
1,000,000.00 |
3.926033528 |
| Preliminary |
120,000.00 |
0.471124023 |
| Construction |
19,200,000.00 |
75.37984374 |
| External Works |
441,600.00 |
1.733736406 |
| Contingency |
288,000.00 |
1.130697656 |
| Professional fees |
768,000.00 |
3.01519375 |
| Project Management fees |
192,000.00 |
0.753798437 |
| Marketing |
5,400.00 |
0.021200581 |
| Financial Charges |
3,456,000.00 |
13.56837187 |
| Total |
25,471,000.00 |
100 |
| Financing Plan |
Kshs |
% |
| Developer |
6,271,000.00 |
24.62015626 |
|
0.00 |
0 |
|
| Debt Finance |
19,200,000.00 |
75.37984374 |
| Presales |
0.00 |
0 |
| Total |
25,471,000.00 |
100 |
| PROFIT | ||
| TOTAL RENT FOR 48 UNITS |
3,456,000.00 |
|
| TOTAL EXPENDITURE |
25,471,000.00 |
|
| REPAYMENT PERIOD |
7.37 |
|
In an area where a 1/8th acre costs kes 1m, this can have 48 rooms each rented at kes 6,000 per month or kes 3,000 sharing . The return on investment for this type of investment is 7.3 years which is impressive considering most investments return within 10 to 15 years.
Francis Gichuhi Kamau, Architect.
info@a4architect.com
0721410684
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