I am 45 years old. I live and work abroad. I have been thinking of making investments back home by using asset financing. I can comfortably make payments of around $2,000 to $3,000 per month without fail for a loan of about $140,000. I am mostly looking at real estate properties that will start to earn me passive income. My goal is aimed at preparing for my return home in about 15 years. However, I am torn between taking loans in Kenya or taking loans here, where I can access lower interest rates of 4 per cent to 5.6 per cent.
I also wonder if I should buy a bungalow, condo or semi-detached asset here in the same price range, then offload it when I get ready to return home. However, I am afraid of how I would handle the lump-sum windfall in terms of investing. Please advise me on what the best move is and what I should invest in back home to prep for a return in 15 years. Maurine.
Dominic Karanja, a financial planning and investments consultant
You should treat the available foreign borrowing not as a quick route to buying property, but as part of a disciplined 15-year wealth-building plan. The objective should be to return to Kenya with income-producing assets, liquid investments, manageable or cleared debt, and flexibility about where and how to live. A cheap loan can be useful, but only if it supports a broader retirement and return-home strategy rather than locking all the money into one property decision.
The main advantage of borrowing abroad is cost. A genuine loan priced at 4 per cent – 5.6 per cent can be far cheaper than Kenyan commercial borrowing, where lending rates are much higher. Central Bank of Kenya reported an average commercial-bank lending rate of about 14.39 per cent in July 2026.
However, the headline rate should not be the only basis for the decision. You must compare the full effective cost, including fees, insurance, penalties, currency conversion risks, and any restrictions on using the funds to acquire property in Kenya.
Currency risk is the biggest caution. When the loan is in dollars, but the rental income is in Kenyan shillings, exchange-rate movements over 15 years could significantly affect affordability and returns. Foreign-currency borrowing is easier to manage when income and debt are in the same currency, but it should still be used conservatively.
Do not buy an overseas bungalow, condominium, or semi-detached house simply because cheap financing is available. Such a move may expose you to another property market, unfamiliar taxes, transaction costs, maintenance challenges, and the risk of having to sell at an unfavourable time. Instead, the stronger approach is to build a Kenyan investment portfolio gradually, using the low-cost borrowing capacity only where the numbers are sound.
For property investment, the preferred focus is on income-producing Kenyan assets rather than one large future-home purchase. Smaller, easily rentable residential units, apartments, or multi-unit properties may provide better cash flow and tenant diversification than a standalone bungalow.
I would recommend separating the eventual retirement home from the investment portfolio, since lifestyle needs and preferred neighbourhoods may change substantially over 15 years.
The $140,000 should be treated as seed capital, not as the entire retirement plan. Even if monthly repayments of about $2,000 are affordable, you should avoid taking the maximum loan simply because it is available. Rental income should be viewed as an additional wealth-building source, not as the main way to service the debt from day one, because vacancies, repairs, delayed completion, and other disruptions can reduce cash flow.
A balanced 15-year plan should combine three elements: income-producing Kenyan property, liquid financial investments, and a strong cash reserve. This balance is important because property is not easily convertible into cash. I would caution against waiting until the end of the 15-year period to invest, because a future lump sum could create pressure to make rushed decisions. Building an investment framework now would make it easier to allocate future proceeds sensibly among a home, income assets, diversified investments, and reserves.
In the first three years, the priority should be to build an emergency reserve and buy the first Kenyan income-producing property only if the numbers work. From years four to eight, the focus should shift to reducing debt while continuing to invest in liquid assets. Between years nine and twelve, a second income-producing asset should be considered only if the first property is performing well and debt remains comfortable. In the final years, the focus should be on reducing leverage, growing liquid investments, and preparing for the move back to Kenya.
Before committing to any purchase, you should compare the property’s genuine net annual return with the effective borrowing cost. HassConsult reported a 7.4 per cent Nairobi rental yield in quarter 4 2025, with rental yields having risen above the 5 per cent – 6 percent range seen for many previous years. Net yield should be calculated after vacancy, service charges, management fees, repairs, insurance, taxes, currency costs, and transaction expenses. If the true net yield is lower than the effective loan cost, the investment may not make sense purely as a cash-flow decision, regardless of whether the property is described as a condominium, bungalow, or semi-detached house.
A stronger strategy is to use affordable foreign borrowing selectively, invest in professionally managed Kenyan income-generating assets, continue growing liquid investments, maintain cash-flow flexibility, and return home with reliable income, liquidity, and minimal or no debt.
One prudent option is to allocate the capital across a diversified Kenyan portfolio: 40 per cent – 50 per cent to high-yield income real estate, 30 per cent – 40 per cent to risk-free infrastructure bonds, which currently offer 12 per cent – 17 per cent tax-free yields and provide guaranteed semi-annual income, and 10 per cent – 20 per cent to liquid money market funds for emergency needs, maintenance costs, and reserves.
