Rental market in Mombasa

Although there is high demand for rental properties and rental costs are significantly higher in Mombasa, attracting good returns for owners, rental returns can be better.

As more people move from the Kenyan hinterland and other overseas countries to the city of Mombasa, whether for work and business, or to enjoy the white sandy beaches, prime architecture, diversity of the wildlife and marine life, the tropical climate and the warm salty waters of the sea, renting accommodation and renting real estate becomes an essential basic need.

The establishment of better-planned housing units, the introduction of high-end luxury apartments and the increased ease of access to property and mortgage loans by local financial institutions in Mombasa mean that rental yields should start to grow. quickly.

Availability of rental properties within the Mombasa CBD

As in Nairobi, rental properties, both commercial and residential, within the Mombasa CBD are hard to come by and when you do finally find a prospective rental property, it is always a tough bargain.

• The amount of rental deposits required from new tenants is significantly high within the CBD where you may be forced to pay 3-6 month deposit fees.

• High rental costs are associated not only with the marketability of CBD properties, but also with the lack of sufficient supply of properties to meet the increased demand (given that most buildings are only several stories high). There is a lot to do when it comes to investing in vertical spaces.

• The trend of dividing large trading rooms into small competitive stalls that is prevalent in Nairobi is quickly catching on in Mombasa. Kizingo is the most privileged residential area within the CBD, which is home to the city’s provincial headquarters, law courts, municipal council and renowned public and private schools. Middle income properties within the CBD are Ganjoni and Tudor, located within the island of Mombasa.

• Commercial property owners are looking to increase their rental yields while accommodating small business merchants who might not otherwise be able to afford large commercial/office space.

Availability of rental properties outside of the Mombasa CBD

Outside the CBD, rental properties in certain areas, such as Mtwapa, Utange, Diani and Vipingo, have seen growth of up to 100% in the recent past, attracting attractive rental yields.

• Property outside of the CBD is proving to be the new frontier in real estate development as more high rises and luxury apartments dominate the scene and people discover the value of coastal real estate (which is associated with the tourist package).

• The rapid influx of inland Kenyan locals and foreign expatriates to Mombasa, seeking to capitalize on emerging business opportunities in the coastal region, has contributed to skyrocketing rents on city properties, especially those located outside the city and in upscale neighborhoods.

Tenure

The main method of tenure in Mombasa is periodic tenancy with properties being leased out periodically (monthly or annually) until the end of the lease.

• Low-income supporters
• It lives in areas like Mnazi Mmoja and Shauri yako in Kongowea in semi-permanent structures.
• Rents are between Ksh500 – 1000 for single rooms
• Lower middle income supporters
• Rents are between Ksh5000 – 7000 for 1 bed houses.
• Upper-middle and upper-income earners
• You can pay more than Ksh40,000 for 3-bedroom apartments in estates like Nyali, Utange and Mtwapa etc.

rental yields

The cost of land in the city of Mombasa has more than quadrupled in recent years. The current rental index is 7.8.

• On average and based on property location: As of 2010, rents have increased by more than 35% in fast-growing areas such as Mtwapa, which show rental prices ranging from Ksh20,000-25,000 for 2-bedroom gated houses . A 1-bedroom apartment within the CBD costs between Ksh15,000 – 20,000 to rent, while a 3-bedroom apartment ranges from Ksh32,000-40,000.
• Plots measuring 50 by 100 feet are currently selling for Ksh2.5million
• ¼ acre of land sells for around Ksh4 million
• Outside the city center, a 1-bedroom apartment costs between Ksh5,000 – 15,000 to rent, while a 3-bedroom apartment ranges from Ksh17,000 – 25,000.

Bail

As the appetite for property increases in the city of Mombasa, it is important that the city council, investors and developers, among other stakeholders, protect against unplanned neighborhoods by promoting quality real estate planning.

A can of paint, a brush and a few hours of work can change the look of a room, update the color and leave it clean and fresh – a great way to add value to a rental or prepare a property for sale.

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