Right next to location, cost and affordability influence the demand for a rental unit. The average tenant wants affordable prices.
As of 2022, it was estimated that more than 15 million Kenyans live in urban centres. This accounts for about 29 percent of the country’s population.
Although the percentage is much lower than in other countries, the rural-urban migration is relatively high with more young people moving to cities and towns in search of employment.
The growing urban population means demand for rental housing. Given the current trends, a rental property will continue to be a good investment in Kenya.
On the flip side, buying or building a rental property is one thing and making good rental income is another. It’s not uncommon for landlords and landladies to make losses and experience frustration in managing their rentals. In 2025, the demand for rental real estate will continue to grow, but the tenants will become pickier and more demanding.
In this edition, experts share insights on how to maximise rental income:
Evolving tenant demands
Lawrence Murithi Njeru a former banker turned realtor and the executive director at Bahamas Property Managers Kenya says tenants’ preferences keep evolving over time and smart property owners have to keep up to attract and retain tenants.
“Currently, location is still the most important consideration. Most renters want proximity to their work stations and schools for their children. Accessibility also plays a big role in attracting tenants and of course security. Tenants prefer neighbourhoods with low crime rates and general access to security services and features.”
Right next to location, cost and affordability influence the demand for a rental unit. The average tenant wants affordable prices. “The rental market is highly competitive especially in the major cities and tenants are cautious on what they pay. Additional costs especially on utilities could also influence tenants’ interest. Any extra bills have to be clear and affordable.”
When it comes to amenities Murithi says tenants have become very picky and want modern installations like solar power, internet, high-speed lifts, ample and secure parking spaces.
Recreational amenities that were previously considered high end such as gyms, swimming pools and playgrounds are becoming the norm for middle class tenants. If these are not available, people will look for alternatives such as areas where they can take walks or walk their pets. After the pandemic, people are cautious with lifestyle diseases.
On the upmarket, tenants look for green building and sustainability features. Energy saving or water-saving fixtures are more marketable to these tenants.
Unit size and layouts are also turning into a big concern for renters. “People prioritise spacious units. Some want enough room for remote working space. Open-plan design is also in high demand as well as flexible spaces they can play around with and customise to their tastes. Although these demands are not new, nowadays people are more exposed, especially with social media and they are more demanding”
Modern tenants are also highly informed and concerned about quality of construction and maintenance. For older buildings, the property’s condition is under a microscope now. Bear in mind, newer buildings are more desirable and the older buildings need to be well maintained to attract tenants.
Lastly, lease terms are also being scrutinised. People question things like pet policies, length of their leases, security of tenure, rent stability and legal implications.
Constant maintenance of property is crucial.
Common mistakes by landlords
Why do some property owners struggle to attract or keep tenants? In Murithi’s experience, overpricing is one of the most common mistakes. “They want the break-even period for their investment to be shorter and so they overprice. Their units may have all the competitive features, but if they are overpriced, they will stay vacant for long. Some landlords are very adamant and it takes months for them to realise they've overpriced”.
Neglecting maintenance is inarguably the most common mistake. Murithi says, many landlords do not reinvest back into their properties and that affects tenant retention and competitiveness in the long-term. Lastly, proper tenant screening is lacking.
Property owners are only concerned with filling the units. They do not care so much about the quality of their tenants.
Identifying bad tenants
Avoiding bad tenants is one way to maximise rental income. And there are different types of bad tenants. First, the type that don't prioritise paying rent.
They pay when it's convenient or they don’t pay at all. We also have tenants who vandalise property, high turnover tenants and those with a history of legal disputes and unending conflicts. Finally, there are difficult occupants who disturb other tenants or entire neighbourhood.
Murithi advises property owners to take screening seriously to avoid bad tenants. And there are many ways to find out more about potential tenants without infringing on their privacy or putting them off. The first and easiest step is to use reference checks.
People listed by all credit bodies as defaulters, for instance are a major red flag. Criminal history and frequent eviction from previous buildings are also problematic traits.
Employment verification also goes a long way in ascertaining a tenant’s ability to afford a unit. Checking a tenant's national identity card and ensuring it’s not fake is a simple way to ensure you are dealing with a straightforward person.
“If they are non-citizens, check their work permits and ensure they do not present fake documents. After-occupancy behaviour monitoring is also important in evading issues early on. The caretaker can look out for issues such as criminal activity, alarming drug use or unnecessary conflicts with other neighbours.
Cost-effective upgrades
New buildings are coming up every year, making the rental market highly competitive. In 2023, the county government of Nairobi alone approved buildings worth Sh220 billion, according to the Economic Survey, 2024.
Although upgrading all the finishes every few years to keep up with trends may not make monetary sense, there are a number of cost-effective upgrades to consider.
“A fresh coat of paint is a neglected touch-up but it goes a long way in improving property appeal. Property owners could also upgrade sockets, switches and bulb holders. Revamping kitchen cabinets to make them modern is likely to attract tenants. Flooring is also a game changer. Landlords can either restore damaged floors or upgrade to modern designs. Nowadays renters want enhanced storage space, therefore, introducing pantries in old school kitchens will go a long way. You can install storage racks in the kitchen and bathrooms to enhance storage. These upgrades do not cost much but they improve a property’s competitiveness,” says Murithi.
Adopting technology
Deploying technology in property management will also go a long way in streamlining rent collection, communication with tenants, billing and utility management. Property technology has evolved greatly over the past couple of years. Effie Otieno, the Business Development and Operations Lead Venco Platforms LTD, a property management technology company, takes us through some of these changes and what landlords need to know about property management technology.
Otieno observes that the Proptech industry here in Kenya is growing at a fast pace - from building to transactional solutions. “Proptech solutions are driven by innovation and the need to address unique needs in our property market. Property developers and owners are looking for tech products to help them streamline tasks and there is a growing need for utility and resource management which has led to the rise of innovations like smart meters and smart gas. People are also looking for ways to meter gas in a modern way. These innovations are enhancing tenant experience while helping property owners seal revenue leakage.”
On the property management apps and software, the solutions coming into the market are also improving by the year. “In the past people relied on traditional accounting software as quickbooks for reconciliation. With time people have noticed the need for integrated tech solutions other than just the landlord's accounting needs.”
“Property management technology is now designed to fit the whole property triangle. It addresses landlords’, tenants’, agents’ and caretakers’ needs. If a tenant wants to access their rent payment statements, they do not need to rely on the landlord to provide the information. People can do that with the click of a button. Caretakers do not need to do rounds handing out invoices every month.”
With smart meters, the monthly utility bills are transparent, which reduces mistrust and conflict between tenants and agents. In addition, tenants can get tokens on loan in case of an emergency. These simple tech-driven experiences are likely to extend a tenant’s stay within a building.
Improving efficiency
Property management solutions have come a long way and Otieno says the adoption is increasing at a steady pace although there are barriers that need to be broken. So far, property management companies, both small and medium sized, appreciate technology because they see the need. Large scale investors are still cautious with the kind of tech they take but they are interested and attracted to technology.
The most common reason for adopting tech is the peace of mind that comes with efficiency.
“Managing property can be very stressful for landlords. But with tech, day-to-day tasks are more convenient and seamless. Platforms like Venco make it easier to process rent payments, utility vending, and report issues, allowing tenants to manage everything from a single app. Features like automated reminders for bills and instant support for maintenance requests eliminate common frustrations. Additionally, visitor management systems provide a sense of security and ease. Residents can easily generate access codes for their visitors which they present at the security desk, saving everyone time. Such convenience builds trust and satisfaction, which translates to happier tenants. When tenants feel valued and experience fewer hassles, they are more likely to stay longer, reducing turnover rates and fostering a stronger community within the property”
Improved communication
The biggest headache for tenants is lack of, or poor communication. When they request for repairs or report issues, they want to feel heard. Although, as a property owner, you may delegate repairs and maintenance to a manager, you still need visibility and awareness on the happenings in and around your property. Tech platforms can provide such visibility and ability to monitor or step in when you need to.
“Communication on some property management apps is two-fold. Normally, there is an admin and a super-admin, and both can see reports or messages from tenants. The super-admin may be the landlord and they have visibility on communication from tenants even though the agent or caretaker may be taking care of the complaints. There is also an option to chat directly with the landlord and landlords can also send bulk communication to their tenants,” explains Otieno.
Such open communication channels improve tenant satisfaction. Besides, property owners know exactly which areas need to be repaired and fixed, ultimately preventing extreme property damage.
Data and platform security
When choosing a tech platform to use for your property management needs, security has to be the biggest consideration. Otieno says, professionally built tech platforms implement multi-layered protection strategies. Sensitive information should be encrypted to protect it from unauthorised access. The platform should also be compliant with data protection laws.
Secure authentication is also a sign that a platform takes security seriously. This could involve multi-factor authentication and secure login protocols to ensure only authorised users can access accounts.
For instance, the platform may require two-factor authentication such as password login, coupled with one-time pin (OTP) or fingerprint access, to enhance account security.
Role-based permissions ensure that data access is limited to only those who need it, while safeguarding sensitive information. “For instance, on the Venco platforms, admins have their own platform while residents have theirs. Within the admin app, an estate can limit data visibility based on user roles”.
Tech platforms should also be audited and updated regularly to identify and address vulnerabilities promptly. Finally, privacy policies, and information on how data is used and stored have to be communicated clearly beforehand.
