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    25Jan, 2023
    Red Flags you Shouldn’t Ignore When Purchasing Land

    Don't be conned

    Owning a piece of land is a dream come true. You get a place to build your dream home, the coveted business apartment, or for any other activity you want, to put your land into good use.

    However, despite the obvious benefits, land purchase is a huge investment hence it can be detrimental if the deal goes wrong. So, how do you ensure you get it right from the start? 

    Let’s look at the 5 red flags when purchasing land that you shouldn’t ignore.

     

    1. Lack of Proper Identification of the Seller

    When purchasing land, it is important to have the right details of the company or the person involved in the transaction. If it is a company representative, check their staff identification, name of the company and its physical location. 

    It is also prudent to visit the company’s website and social media pages to confirm its existence and previous customers’ reviews.  If the details are not clear or there is some hidden information on the company, that could be a red flag.

    2. Inconsistent Information

    Land is a long-term and costly investment. Hence, it is wise to get all the important information you need to make your decision. Beware of instances where the information given by the salesperson does not match what is on the company’s digital platforms or if the website says something different from the company’s social pages.

    Also, take note of sellers without a website or an online site where you can verify their authenticity and find previous reviews from other customers. Else, you could end up purchasing a non-existing property.

    3. Lack of Legal Documents

    Always have one thing in mind – you are not the owner of the property until you have the proper legal documentation. If the land does not come with the ownership documents or the purported owner is unwilling to share them with you, that is a red flag. 

    It doesn’t stop there though. Beware of falsified documents such as title deeds and land transfer documents. Ensure everything is legitimate to avoid lawsuits or worse, losing your property later on.

    4. Rushed Deal

    Take your time and make wise decisions before signing off on the deal. Some common red flags here include the owner or seller rushing you to accept the offer and to finalise the transaction or when the deal is too good. Conduct proper and independent research on the property and verify the relevant documents first. You could just be buying a ten square foot ditch by the road side yet you think you are purchasing the perfect place for your dream home.

    5. Lack of a Physical Site Visit

    Whereas online or remote transactions are growing popular and very convenient today, it is said seeing is believing – only believe what you see and not what you hear or read online. Only pay after you have confirmed that the land meets your expectations, has a clean title, and is owned by the person purporting to sell it. 

    For instance, at Astoria, we offer free site visits to our clients first to ensure our offer meets their expectations and to answer any questions they may have. 

    Land is a very vital asset. Getting a genuine seller can be an uphill task, especially with the variety of sellers around. The process can be difficult or straightforward. But nonetheless, ensure the process is favourable to you by considering the above common red flags when purchasing land, before you sign the final deal.

     

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    Note:

    It’s important to verify the survey map from the Survey of Kenya to ensure the location on the ground agrees to the location per the survey map. A surveyor can assist in this verification.

    Buy a plot
    25Jan, 2023
    Overview of Land Valuation

    What You need to Know

    Land valuation is the process of determining the value of land. There are many factors that go into land valuations including location, size, zoning, age, condition, and amenities. Land valuations are often done using comparable sales data, income approach, market analysis, cost approach, and/or replacement cost.

    Land value is the estimated market value of land. A property’s land value is often determined by its highest and best use.

    property-valuation

    Location

    The location of the property is a major factor in land valuation. Location affects the price of a property based on its proximity to public transportation, schools, shopping centers, hospitals, employment opportunities, etc. Properties located near these amenities tend to have higher values than those farther away.

    Size

    The size of the property is also a big factor in land valuation. Larger parcels of land generally command higher prices than smaller ones. However, the size of the parcel does not necessarily affect the value of the land. In fact, larger parcels may actually have lower values due to their increased costs of maintenance.

    Zoning

    Zoning is a legal term that refers to how much land is allowed to be developed in a certain area. Zoning laws vary widely from city to city, state to state, and country to country. Zoning regulations determine what types of structures can be built on a piece of land. These regulations can limit the number of units that can be built per acre, set minimum lot sizes, restrict building heights, and even dictate whether or not a particular type of structure (such as a home) can be built at all.

    Age

    The age of the property is another major factor in land valuation, especially if the property was built before current zoning laws were put in place. Older buildings are often less expensive than newer ones since they require less upkeep. However, older buildings do not always sell for less money than newer ones. Sometimes, the opposite is true. If the property was built after current zoning laws were put into place, it might be worth more money than a similar property built before current zoning laws went into effect.

    Condition

    The condition of the property is yet another major factor in land valuations. A property’s condition includes things like the exterior appearance of the house, the interior layout, and the quality of the appliances and fixtures. Condition is subjective; some people consider a well-maintained home to be in good condition while others think that a rundown home is still valuable.

    Amenities

     Amenities are any features that make a property desirable. Amenities can include swimming pools, tennis courts, garages, fireplaces, etc. Amenities can increase the value of a property significantly.

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    25Jan, 2023
    6 Reasons to Buy Land As An Investment Option In Kenya

    When thinking about investing in real estate high-rise apartments and mansions come to mind. However, the most basic real estate investment strategy has always been investing inland. It is a raw investment, it gives you the ability to start something from scratch and to build basically anything you desire. Alternatively, it gives someone else the opportunity to build something on your land. The misconception about purchasing a piece of land is that it generates no money, it won’t have a rising value, and that is generally undesirable. According to landowners, these are huge misconceptions. There are so many financial and managerial benefits to buying land.

    Upper Elgon-view
    Upper Elgon-view

    1. Versatility and Options

    Land can be used for so many options that will suit basically anyone’s needs and ambitions.

    a) Residential and commercial buildings: The idea is that you can basically rent, sell or even develop the land depending on your financial expectations and ability. Renting out the land and allowing a residential building to be constructed means you’ll be getting a steady income and increase the land’s value because of the property built. Selling the land to commercial or residential investors for added value after some years is another option.

    b) Farming and livestock: Many landowners who buy their estate in rural or suburban areas have the attractive option of renting it out for many years for farming purposes. This serves two main purposes for a landowner, generating money from rent and from appreciation.

    royalton
    royalton

    2. No Depreciation

    The fact that land has no depreciation value is another reason that makes it a great real estate investment strategy. Land can’t have a depreciation value because simply it can’t be destroyed, moved, or affected negatively under any circumstances, natural or unnatural. So when investing in land, an investor is able to rely solely on appreciation, worst-case scenario.

    3. No Competition

    This is a true fact because lands are different in size, location, and even shape that you can never find the same exact land. Compare that to property owners who have to work hard to fight off competition in their market. If you are going to buy land, then you will find it easier to acquire it without going through the process of bidding with other competitors.

    4. Limited Management Issues

    Land doesn’t need any maintenance or attention while properties require a lot of work and time. To be profitable in land purchasing, the most important criterion is that the land has to be suitable for construction. For investors who are too busy to deal with tenants, maintenance, and managerial issues, then the land is a great strategy for making money in real estate passively.

    maili 4 O
    maili 4 O

    5. Land Is Scarce

    The thing about land ownership is that you will be the owner of an investment that is considered limited or rare. We are running out of land. With overpopulation around the world, empty lands are becoming even more limited with every passing year.

    6. Cheaper Expenses

    Finally, is landowning a lot more expensive? Owning vacant land has the lowest expenses in real estate investments because you avoid utilities, pay fewer taxes and fewer mortgages considering that you purchased empty land.

    Land as a real estate investment strategy is the best option for people who are not cut out for the hard work of managing residential real estate properties. The huge risk that lies with buying land is the consequence of not being able to rent out the land. As with any real estate investment, vacancies hurt profits and cash flow. Moreover, if the land was bought with the intention of having a tenant build a property, then you will have to construct a property to rent, which is very costly. Another risk that can come with land purchase is the extreme shifts in value – the value rates can rise extremely slowly or sky-rocket in a week. Nevertheless, if you are looking to add into your dimension of investments with something new, then land ownership is the thing for you.

    At Heritage Shelters we have plots around Eldoret e.g the affluent Elgon View, Huruma Estate, Langas, Outspan etc

    For more information, contact us or visit our office at Zul Arcade in Oginga Odinga street, Zul Arcade. 

    Site visit
    22Nov, 2022
    HOW YOU CAN GROW YOUR WEALTH THROUGH INVESTING IN LAND

    Heritage Shelters, a certified real estate agent that deals in the sale of land in the Elgonview, Maili 4, Eldoret CBD, Chepkanga and Plateau areas, is here to guide you on how to invest land to make money.

    Land is one of the highly prized assets, but buying raw land can also be a risky investment, especially without a solid development plan.

    Just owning the right piece of land, purchased at the right price, outshines issues with settling for the right type of investment plan.

    Common ways of land investments include residential and commercial development, agriculture and livestock production, mining and using it as a recreational centre.

    Residential land development

    This is whereby you can develop houses and commercial centres for sale or rental. You can be a landlord and accrue rent from the residents.

    Lease and Hire

    You can also lease your land to individuals, firms or the government for a certain period of time.

    Row cropland

    You need to find out first which type of cultivation is suitable and allowed in the area.

    An investor can also grow vegetables in large scale farming.

    Here, one can also exploit the construction of dams, poultry and fish ponds.

    Also get experts to measure your soil before cultivation.

    Livestock-raising land

    Use your land for dairy and livestock production.

    Timberland

    New land buyers are always encouraged to fence their parcels and grow trees first. Trees can be sold for timber production and also enrich the soil for future cultivation.

    Mineral production land

    Land can be mined for soil, quarry and other minerals rich in the area.

    Recreational land

    Land can be developed for tourism i.e in serene areas that attract visitors. One can also construct an entertainment joint for recreational activities.

    Note:

    Potential investors in land should always be aware of the specific types of land-related investment options available through investment products such as exchange-traded funds (ETFs) and exchange-traded notes (ETNs).

    In the case of small investors, real estate investment trust (REIT) ETFs are a solid, cost-effective choice as they do not require direct management, are broadly diversified, and can be purchased or sold on a real-time basis.

    A number of ETFs and ETNs cover most land-based investment categories, including timber, minerals, and farming.

    22Nov, 2022
    BUYING LAND IN KENYA?

    9 LEGAL STEPS FOR BUYING LAND IN KENYA

    Everyone hopes to own a piece of land somewhere. It’s the most valuable fixed asset that you could possibly own today. However, if you are planning to buy a piece of land anywhere in Kenya, there are certain important procedures which you should follow. Here are legal steps to purchase land in Kenya:

     

    1. Searches and inspection of the title

    Once you identify land it’s always recommended that you visit the lands registry so as to conduct a search of the parcel in question. You will need a copy of the land title deed from the seller to facilitate the search. This will normally take three days to get the results of the real owner of the land and if there is any caution put against the land.

     

    2. Preparation of offers and price negotiation

    Once the buyer is satisfied with the search results as presented by their advocates from the lands registry and the company registry, then they will okay their advocate to prepare an offer. The advocate involved should prepare a letter of offer or intent showing the details of the seller and purchaser, the description of the property on offer, and the proposed purchase price and modes of payment.

     

    3. Sale agreement and deposit payment

    Once you all agree that’s the buyer and the seller there is a need to ensure that the offer has both the terms and conditions included. It is normally drafted by the seller’s advocate and presented to the buyer’s advocate for approval. Upon the execution of the sales agreement, the agreed deposit is paid by the purchaser through their advocate to the seller’s advocate’s account.

     

    4. Payment of land rates

    A few years ago, the City Council of Nairobi “clamped houses” that had failed to remit rates. Buyers should be aware of such property because the payment of rates on land is a legal obligation of landowners and the seller should clear any pending rates on the land before completing the transaction.

     

    5. Transfer documents and consent to transfer

    The seller’s advocate prepares transfer documents that will be executed by both the buyer and the seller. The transfer documents will only be executed after consent to transfer has been issued by the commissioner of lands.

     

    6. Valuation

    For purposes of stamp duty, an application for valuation is always made to the government valuer, who makes a site visit to enable him or her to prepare the requisite valuation report. Stamp duty is important as it is used in registering the property.

     

    The payable duty is determined by a government valuer and the valuation is done to determine the true value of the land on the open market as at the date of transfer.

    The intention is to gauge the value declared in the instruments presented for registration for purposes of ascertaining whether the value declared in the instruments will be raised or not.

     

    7. Payment of Stamp Duty

    It is the responsibility of the buyer to pay the stamp duty, a tax levied on all lands.

     

    8. Registration of transfer

    Once the registration process is complete, the legal ownership of the land shall have legally changed hands.

     

    9. Exchange of documents

    Upon receipt of the complete documents from the seller, the buyer is obligated, in exchange of the documents, to pay to the seller the entire balance against the land through his advocates to finalize the registration of the documents after paying the requisite stamp duty.