An interview with Mr. Kiama Gitonga, Director and Head of Sales & Marketing, Username Investments
In part one of this interview, Mr. Gitonga, the Director and Head of Sales & Marketing, Username Investments, answered some preliminary questions on land investment issues. Click here https://thelegalanalytica.com/2020/08/14/investing-in-land-post-corona-an-experts-perspective-part-1/ to access the first part. In this second part, He demystifies other common myths such as locality issues, the green-house deal, and many more. See the interview below.
Mr. Kiama Gitonga
Director & Head of Sales and Marketing, Username Investments
Mr. Gitonga’s company, Username Investments has enjoyed huge success in the property market and has received extensive accolades such as Best Land and Investment Company, Top 100 Mid-sized Companies Award, Real Estate SME of the Year among many others
The Location and the boom
1. The prevailing ideology that land companies peddle is that the land will be valuable in five years, is it true
Yes, this is true. The appreciation of land prices happens over time, influenced by several factors. They include:
• Infrastructural developments such as the SGR, tarmacking and expansion of roads, upgrade of key airports, dry ports, e.g. in Naivasha, smart cities such as Konza City, growth of industries, and this opens up the area for residential developments for the population working and residing in such areas.
• Rapid urbanization averaging at 2.6% per annum has brought about the pressure of housing to our urban areas, as more people move to urban areas. Urbanization has brought the need for affordable housing due to the massive population in major cities. As a result, satellite towns have opened, thus pushing up land prices.
• Growth of devolution is opening the 47 counties and all urban centers and cities for real estate development due to the rising demand for housing at county levels, thus driving up land prices in satellite towns.
2. What are the best areas to buy land?
The best areas to buy land are satellite towns near major towns and regions with upcoming infrastructural developments. The areas are gradually opening, and the property is more affordable. The areas have easy access to major towns due to ongoing infrastructural developments. In Kenya, they include Kangundo Road, Matuu, Nakuru, Naivasha, Konza, Ngong, and Athi River.
3. Is there an ‘ideal time’ to buy land in Kenya
The best time to buy land is always “now” if you wait until you are 40 years to purchase land, a property costing KES 300,000 now will be worth millions, and you may not afford it; actually, it may not be available. However, some factors determine when and where to buy land.
The best time to buy land is nowMr. Kiama Gitonga
• Personal investment goals of an individual will determine the timing of buying a property. A goal such as settling your family will lead you to buy the property before having a family or when you have a young family.
Financial capability determines when an investor will buy a particular property without straining financially.
• The long-term purpose of the property – Some investors consider investing so that they can resell to finance a future project, i.e. their children’s education or a mega project or reselling it in the future.
Let us turn to Legitimacy and accuracy. The most common news item is that individual land companies have conned their customers. From an expert’s perspective:
4. How do I ensure that my land is legitimate?
• Conduct a background search of the property vendor – when you finally decide to invest in land for sale in Kenya. Look out for a leading, award-winning, and genuine land selling company. Take time and listen to the client’s testimonials to know more about the company. After you are satisfied with the background search of the company, you can go ahead and invest.
• Title Deed Search at the Lands Registry – Once you have identified and expressed interest in a project request for a copy of the property’s title deed and conduct a search in the respective Land Registries and establish the real landowners before making a purchase.
• Physically visit the land – ensure you visit the property and experience first-hand on-ground information. Avoid a land selling company selling land and are not willing to show them to you.
• Sign the legal documents and have a Lawyer oversee the process awaiting title deed transfer – land transfer is a legal process involving the signing of crucial documents such as an Offer Letter, Sale Agreement, and a Title Deed Transfer form. Ensure you sign these documents, witnessed by the Investment Company’s Lawyer and your lawyer.
• Post Purchase Activity – After receiving your title deed, we recommend that you do another search at the Land Registry to ensure that the land now reads your details.
5. In your experience, what are some of the key red flags in land deals?
• Inadequate and inconsistent information – if you find out that the details about a particular property keep changing or are inconsistent from what the owner informed you, this is a red flag. You may end up buying a non-existing piece of land.
• Lack of official sites to do a background search – a land selling company with no official sites such as a website and social media sites to help you verify their authenticity is a red flag.
• Lack of willingness to take you to the site – Any land seller not willing to take you to the property to view it before making any purchase is most probably not genuine.
• Lack of legal documents to prove land ownership – any land selling process with no legal documents such a title deed to the land they are selling may not be legit.
6. How can I verify my title deed?
There are two methods to conduct a title deed search in Kenya.
• Manual title deed search – This search is conducted physically at the Lands Registry. You must fill in a search form, attach copies of KRA PIN, ID, and a copy of the Title Deed under search.
• Online title deed search – This has been made possible by the digitization of land records. The first step is creating an e-citizen account, logging into The Ministry of Land and Planning portal, and submitting details of the property you would wish to conduct a title deed search. A land search costs KES 500 and can be paid using M-PESA, Credit card, or debit card.
7. Is it advisable to buy land in areas known to have community land?
According to the National Land Commission, community land is all land used traditionally or historically for communal purposes and property used as Community Settlement area. Community land may be converted to public or private land through compulsory acquisition, transfer, surrender, or allocation by the Community Land Management Committees, but the Authorities must sanction such conversions.
It is not advisable to buy community land until it has been legally converted to private property through compulsory acquisition by the Community Land Management Committees through a County Assembly.
8. What is your opinion on investments that incorporate aspects such as reaping benefits from greenhouses, etc.?
An investment should create value for an investor in the long term when done appropriately and with the right expectations on returns. Sadly, there have been several cases in the industry where Kenyans have lost their hard-earned money in greenhouse investment. My advice to Kenyans is to try as much as possible not to fall prey to “too good to be true ventures” and find a long-term investment that will have tangible benefits. Avoid a quick riches approach where you may end up losing your hard-earned money. Finally, research thoroughly before committing to an investment.
An investment should create value for an investor in the long term when done appropriately and with the right expectations on returns.Mr. Kiama Gitonga
Let us turn to Username Investments
9. Tell us about your company
Username Investment Limited is the leading and award-winning Kenyan based real estate and development Company. We desire to provide Kenyans with a place to call home by making property ownership accessible for all regardless of their incomes. For a long time, property ownership in our country was reserved for the rich, with prices of plots being over KES 1,000,000. These high rates made it impossible for the low and middle-income earners, some of whom are Mama Mboga’s, Boda Boda Riders, young graduates, etc. We identified this housing gap in 2013, and we came in to provide affordable land with prices as low as KES 199,000. The properties are in areas close to urban centers where Kenyans can buy and build their own homes. If you visit an area such as Ngong, where we have most of our projects, you will notice the massive construction of residential houses by Kenyans who bought land from us. As the country marks 12 years after the launch of Vision 2030 in 2008, we pride in providing access to decent housing to millions of Kenyans in line with the Government’s Housing Agenda. So far, we have done over 39 projects, issued over 8,072 title deeds, and formed a client base of over 10,200 clients since our establishment in 2013. Our projects are in Ngong, Nakuru, Tinga, Konza, Naivasha, Athi River, Matuu, and Kangundo Road. We have been recognized as key players in the industry and won various accolades across the board, including:
Best Land and Investment Company, Top 100 Mid-sized Companies Award, Real Estate SME of the Year, Best Customer Care on Social Media, Best Diaspora Market Land Selling Company, Best Land Agency in the use of Digital Solutions to Enhance Customer Experience, Best New Entrant in the Customer Service Innovation Awards, Best Land Agent in Value-added plots and Land Agent of the Year.
Our Competitive Comparison
1. Strategic properties – our projects are in places with high growth potential, areas with upcoming infrastructural developments such as roads, airports, railway lines, SGR Stations, industrial parks, technology cities, etc. The areas are also close to urban centers such as Ngong, Konza, Naivasha, Athi River, and Nakuru.
2. Affordability – We have properties with prices as low as KES 199,000 – KES 430,000 for an eighth of an acre plot (50 x100) with a flexible payment plan. The prices are all ide title transfer, stamp duty, and legal fees with no hidden charges.
3. Value-added properties – All our properties have a perimeter fence, estate gate, internal access roads graded, water, and electricity installed on-site at no extra cost.
4. Title delivery- We ensure we deliver title deeds within 6-10 months upon completion of payment to allow investors to develop their properties.
5. Innovative – We have an automated website that enables Kenyans to buy land online. The site will enable investors to navigate through our various projects and select their most suitable property. The website has an automated layout where you choose a plot and make a direct payment.
COVID-19, the Economy, and the future
10. Given the impact of COVID 19 on the economy, is it wise to buy land at this time? Or even sell?
COVID-19 has significantly affected the local and global economy; we still are hopeful that this pandemic ends soon, and the economy recovers fully. One thing that has been evident during this season is that there is a lot of congestion in urban areas, and even safety measures that are being enforced at residence areas are almost impossible due to the number of Kenyans residing there. This has created a great need for affordable land to build homes on the outskirts of urban centers where families can settle. Additionally, land selling companies have also extended the lenient repayment period for properties. You find a prime property with a cash offer of KES 199,000 and a solid payment plan. Further, properties are now being sold with huge discounts now, thus being helpful to people who are buying. You can be sure; land prices will shoot after this season, meaning that even with Covid-19, investing in land is recommended.
11. Given the rise in alternative means of investment, what does the future hold for land as an investment option?
There are many investment opportunities available, but the land investment is the most viable of them all because;
- Land is a long-term investment that appreciates without incurring any overhead costs.
- When you purchase a property, you receive a title deed, which is an evidence of ownership where you can either embark on developing the property or use the title deed as collateral.
- Real estate has one of the highest returns, with average returns of 25.8 percent compared to other asset classes’ average returns of 12.3 percent.
- When it comes to land, you can make use of it to generate income, such as leasing it out, developing an event venue/garden, and agricultural activities.
12. Is it possible for land prices to fluctuate and take a downward spiral?
To begin with, the land does not depreciate as it has an unlimited useful life. Other long-lived assets such as land improvements, buildings, furnishings, equipment, etc. can depreciate due to wear and tear. However, there are instances where land prices in an area can fluctuate, but it does not mean that the land lost value. In a few cases, the property is overpriced, and thus after some time, there is a price correction. That is why it is crucial to conduct a price survey to avoid buying overpriced land.
I always believe in taking advantage of every season of your life. There is still something beautiful that comes out at every point. For example, during this COVID-19 period, many things have happened. Still, it does not mean all is lost; one can cultivate innovative ideas. You can take advantage of the huge discounts given by genuine investment companies, invest with less than you would have invested with, and new values can be practiced, patience, and rediscovering the potential in you. It is also necessary to keep investing and calculate your risks as you move forward and believe in your dreams and goals.