Kenya is among the countries with a fast-growing economy and a diverse, wide real estate market. One of the recommended ways to invest in the country’s real estate sector is by investing in leasehold land.

What is a Leasehold Land in Kenya?

Leasehold land refers to land that is leased from the government or private landowners for a specified period, usually between 25 and 99 years. Investing in leasehold land in Kenya comes with numerous benefits that make it a lucrative investment option for investors. In simple terms, this is a type of land ownership where the titleholder leases the land for a specific period of time, usually specified in the legal books. The land is owned by the government, and the leaseholder pays rent to the government for the use of the land.

All You Should Know About Leasehold Land in Kenya Before Making an Informed Decision

Are you considering investing in leasehold land in Kenya? Before making any investment, it is essential to understand the legal framework and requirements surrounding leasehold land in the country. Here is what you need to know before deciding to invest:

The Legal Framework for Leasehold Land in Kenya

The legal framework for leasehold land in Kenya is provided for in the Land Act of 2012, which is the principal legislation governing land in the country. The Act provides guidelines on how leasehold land should be managed and the rights and obligations of the leaseholder and the government.

Under the Act, the government is the custodian of all public land in the country, including leasehold land. The government is responsible for granting leases, managing and regulating the use of leasehold land, and ensuring compliance with the lease terms and conditions.

The Act also provides for the rights of leaseholders, including the right to use and enjoy the leased land, the right to transfer or sublet the land with the government’s approval, and the right to renew the lease at the end of the lease term.

Leaseholders are required to comply with the terms and conditions of the lease, including paying rent to the government and using the land for the purpose specified in the lease agreement. The Act provides penalties for leaseholders who breach the lease terms and conditions.

In addition to the Land Act, leasehold land in Kenya is also governed by other laws and regulations, including the Land Registration Act, the Physical Planning Act, and the Environmental Management and Coordination Act. These laws and regulations provide guidelines on land registration, physical planning, and environmental protection, respectively.

How to Acquire Leasehold Land in Kenya

To acquire leasehold land in Kenya, there are some set guidelines that one needs to follow. The very first step is to identify the land that you want to lease. Once you have identified the land, you should then make an application to the government through the Ministry of Lands, Housing, and Urban Development. The application should include details such as the purpose of the lease, the size of the land, and the proposed use of the land.

Renewing a Leasehold Land in Kenya

Leasehold land in Kenya is renewable, and a leaseholder can renew the lease by applying to the government through the Ministry of Lands, Housing, and Urban Development (or the relevant Ministry responsible for Lands at the time). In most cases, the renewal is subject to the payment of the renewal fee, which is again in most instances a percentage of the market value of the land at the time.

Risks Associated with Leasehold Land in Kenya

Investing in leasehold land in Kenya also comes with some risks. One of the risks is the uncertainty surrounding land ownership. Some leasehold land in Kenya is still subject to land disputes, and it is essential to conduct thorough due diligence before investing. However, this should not scare you off since there are agents like J Comfort Homes who can handle these land matters for you.

Leasehold vs. Freehold Land

Leasehold land is different from freehold land in that leasehold land is owned by the government, while freehold land is privately owned. Freehold land is also more expensive than leasehold land because it provides unlimited ownership rights.

Why Invest in Leasehold Land in Kenya?

Leasehold land in Kenya is an attractive investment option because it provides long-term ownership rights without the high costs of freehold land. Leasehold land is also relatively easy to acquire, and the renewal process is straightforward. The advantages of investing in leasehold land in Kenya are numerous. Below are some of the major reasons why you should actually invest.

To begin with, it is a long-term investment: Leasehold land in Kenya is leased for a period of between 25 and 99 years, providing a long-term investment opportunity for investors. This long-term investment horizon ensures that investors can benefit from the appreciation of the land over time. Another great benefit is that the investment is Affordable: Investing in leasehold land in Kenya is relatively affordable compared to freehold land. This makes it an ideal investment opportunity for individuals who want to invest in real estate but have limited capital.

Next is Flexibility: Investing in leasehold land in Kenya provides investors with flexibility in terms of usage. Investors can use the land for commercial or residential purposes, depending on their investment goals. For flexibility to be achieved, security is key, leading us to the next benefit – Security: Leasehold land in Kenya provides investors with security in terms of ownership. The leasehold title is registered with the government, providing investors with legal protection against any disputes or claims.

They have High Returns: Investing in leasehold land in Kenya can provide investors with high returns on investment. The appreciation of the land over time, coupled with the potential for rental income, makes it a lucrative investment option. And lastly is Availability: Leasehold land in Kenya is widely available, providing investors with a wide range of options to choose from. This makes it easier for investors to find a suitable investment opportunity that aligns with their investment goals.

The Reason You Need to Invest in Leasehold Land in Kenya

In conclusion, investing in leasehold land in Kenya is a lucrative investment opportunity that provides investors with numerous benefits. With a growing economy and a diverse real estate market, now is the perfect time to invest in leasehold land in Kenya. Furthermore, investing in leasehold land in Kenya can be a good investment option for long-term ownership without the high costs of freehold land. However, it is essential to conduct thorough due diligence before investing to avoid any land disputes. Understanding the legal framework and requirements surrounding leasehold land in Kenya is crucial before making any investment decision.

Contact Comfort Homes today to explore the various leasehold land investment opportunities available in Kenya.