How You Can Buy Land With 30K Salary

  • Land is often cited as the ultimate safe investment that keeps growing and rarely loses value. In Kenya, high land prices have served as a blessing for strategic investors and also a source of despair for many young Kenyans who are afraid that the high cost of land may block them from ever settling in their own property. 

    Buying land, which has for many years been thought to be a preserve for the well-off, is actually achievable by anyone on a Ksh30,000 salary.

    Firstly, land in Kenya is quite costly, especially in urban areas but there are ways to still secure good investments without causing too much damage to the wallet.

    A promotional poster showing land for sale
    A promotional poster showing land for sale
    File

    Speaking to Kenyans.co.ke, personal finance expert Nicholas Gachara advises those with the desire to own land to plan ahead in terms of finances so as to accomplish the goal.

    "A person should first set aside 20% of their salary for saving.10% as actual cash for emergency situations and 10% for long-term investment which can be used to invest in land," he states.

    The financial expert opines for one on that salary scale to go for a plan to pay in installments as it is manageable noting that buying in cash is often cheaper.

    Join a SACCO

    To facilitate cash deals, Gachara recommends for one to join a SACCO where one can save and get cheap loans to buy the land with.

    "After saving for a period of six months, one can get up to four times the amount of money for a loan with low-interest rates, which you can use to purchase the identified parcel," he advises.

    He further notes that the interest rates are predictable with the saving platform where one can plan for the repayment as well.

    "You can use the land as collateral in a SACCO for the land you are buying. This way they even carry out the due diligence for you," he states.

    Gachara adds that there are SACCOS that sell land cheaply to their members as well with documentation like titles already carried out.

    File image of Kenyan banknotes
    File image of Kenyan banknotes
    File

    Reiterating the SACCO option, real estate consultant Gladys Situma further broke down the figures to give 

    "If one is saving Ksh10,000 a month, in six months that will translate to Ksh60,000 which the SACCO can facilitate a loan of up to Ksh300,000," she stated.

    Buying in Satellite Towns

    In terms of identifying the property to buy, the expert attached to Fanaka Real Estate advises with the Ksh300,000 cap for one to look for land in the outskirts of Nairobi, areas which are slowly gaining prominence with infrastructure development.

    "With satellite towns along Kangundo Road like Kamulu, Joska, Malaa and along Mombasa Road areas like Kitengela and Athi River as well as areas around Ngong Town have affordable land," she stated.

    Advocating for the wait and see the principle of buying land, Situma adds that the land value also appreciates with the time in such areas. 

    "For example, a person who bought land in Kamulu three years ago and wants to sell it will make huge profits as the value appreciates with Ksh120,000 a year," she explains.

    A landowner seeking anonymity in Nairobi explained that she bought land in the Utawala area in the 2000s on a teacher's salary.

    "We bought a 1/8 of an acre piece of land at KSh20,000 and now it is worth over Ksh20 Million," she reveals.

    Due Diligence When Buying Land

    Land is a very emotive issue in Kenya and if the acquisition is not followed correctly, you may only have yourself to blame. 

    The first step is to carry out a search for the parcel at the Ministry of Lands to confirm who the real owners are or if the title has any caveat on it. The search will cost you Ksh 520.

    Ministry of Land headquarters based at Ardhi House, Nairobi
    Ministry of Land headquarters based at Ardhi House, Nairobi
    File

    The next thing you should do is search with the local authorities to check whether the parcel has any unpaid land rates.

    Thereafter contract a surveyor and visit the land you are buying and verify the details on the map.

    The next steps you can complete with the services of a lawyer which will include the drafting of the purchase agreement and completion of the sale.