Buying a rental property can still be profitable in 2025, but it is no longer a rising tide that lifts all boats. Returns depend on purchase price discipline, financing costs, realistic rent assumptions, and the ability to manage vacancies. The good news is that inflation in Kenya has eased into the target range, financing benchmarks are down from early 2025 peaks, and rental yields in several submarkets remain resilient. The flip side is that lending rates for households and small businesses remain elevated, and global house prices in real terms are not surging the way they did in 2020 to 2022. Put together, this means first-time investors need a methodical approach.

Below is a step-by-step playbook, with benchmarks and tools to run the numbers before you commit.

1) Read the 2025 macro signals that matter for landlords

Kenya’s annual CPI inflation was 4.5 percent in August 2025, within the official 2.5 to 7.5 percent target band. Lower and more stable inflation reduces uncertainty around rent escalation and maintenance costs.

Policy rates have trended lower through 2025. The Central Bank of Kenya reduced the policy stance during the year, and by September 2025 the commercial banks’ weighted average lending rate still hovered near 15 percent, reflecting a lagged pass-through to households and SMEs. Plan conservatively when you model mortgage payments.

Globally, real house prices are not overheating. BIS data show that real house prices fell 1.0 percent year over year in the first quarter of 2025, with advanced economies modestly up and emerging markets slightly down. This is a sign to prioritize cash flow over speculative appreciation.

Takeaway for first-timers: assume today’s financing will not be ultra cheap, assume moderate rent growth tied to inflation, and underwrite deals on cash flow, not on a hope for rapid price gains.

2) Anchor your expectations with local rental yield evidence

Independent research indicates that Kenya’s investment grade rental yields have been steady, not collapsing. For example, sector reports for 2024 show average yields in mid to high single digits across segments, with submarket selection a key driver of performance.

International vacancy and absorption patterns also remind us that supply cycles affect rents. In the United States, the rental vacancy rate reached 7.0 percent in the second quarter of 2025 as new supply came online, a cautionary example of why micro location and product fit are crucial.

Takeaway: use local yield ranges as a sanity check and verify them against actual asking rents and recent leases in your target micro market.

3) Build a conservative deal model before viewing properties

A simple cash flow model forces discipline. List the monthly rent, subtract vacancy, operating costs, and financing. Aim for a positive cash on cash return after all costs, not just a paper yield.

Start with rent and vacancy. Use recent comps, not just online listings. If you plan flexible move in dates to fill units faster, budget for prorated charges in the first and last month of a lease.

Estimate operating expenses. Include service charge, property management, routine repairs, insurance, land rates, and a maintenance reserve. Rising construction input costs often show up with a lag, so your reserve should be real.

Price your financing with a margin of safety. Use today’s actual offered mortgage rate quotes, not only the policy rate, to model payments.

Helpful tool for a quick first pass: plug your figures into a rental rental property calculator. It outputs cap rate, cash flow, cash on cash, and break even occupancy, which helps you rapidly test multiple scenarios before you ever pay for an appraisal.

4) Stress test the rent path and the exit value

Rents tend to track inflation and wage growth rather than jump unpredictably. Across OECD economies, lower income renters carry a higher risk of being overburdened by housing costs, which caps how fast rents can rise without hitting demand. Use conservative rent growth that aligns with local CPI rather than double digit hopes.

For long term value, forecast with a transparent compounding assumption. Test scenarios such as 3 to 5 percent annual appreciation over 10 to 15 years and compare them with realistic inflation baselines. A simple way to do this is using a future value calculator, which keeps expectations grounded and helps you avoid overpaying based on rosy exit numbers.

5) Plan for vacancies and mid month move ins without losing money

Vacancy is a fact of life. Two practical practices protect your return:

Proactive leasing. Start marketing 60 days before expiry and consider flexible move in windows. In markets with rising supply, homes can take longer to place, as international data on absorption of new apartments has shown.

Prorated billing. When tenants arrive or leave mid month, charging a fair daily rate preserves goodwill and prevents revenue leakage. You can compute the exact daily charge with a prorated rent calculator.

6) What good looks like for a first time deal in 2025

Benchmarks vary by neighborhood, but the following targets are a solid starting point in the 2025 environment:

Entry cap rate at acquisition equal to or higher than your realistic cost of debt. If your mortgage offer is near the mid teens, a 7 to 9 percent gross yield will not carry the deal unless expenses are extraordinarily low. Use net yield and cash on cash as the final decision metrics.

Break even occupancy at or below 85 to 90 percent. This gives you room to absorb one empty month per year without going cash flow negative.

Debt coverage ratio above 1.20 on realistic rent and expense assumptions. This is a basic safety margin that many lenders look for and that protects you when repairs run hot.

A maintenance and capital reserve set aside from day one. Older buildings can surprise you with roof, plumbing, or electrical issues that overwhelm a thin budget.

Enter these thresholds into your model and adjust until the numbers clear the bar.

7) Micro market diligence that first timers sometimes skip

Tenant profile. Match your unit type and finish level to a clearly defined tenant pool. If your target area is dominated by families, two bedroom units may have more stable demand than tiny studios.

Walkability and transport. Proximity to reliable transport and employment nodes often matters more for occupancy than cosmetic finishes. Visit at peak hours and speak to shopkeepers and caretakers.

Competing supply. Track building approvals and handovers. A flood of nearly identical apartments can stretch leasing timelines, pressure rents, and push concessions.

Property management realism. Cost out professional management and a handyman network before you buy. Cutting corners here often costs more later through longer vacancies.

8) Financing tactics in a high lending rate world

Shop widely and negotiate. Even as the policy stance eased during 2025, retail lending to households has remained elevated. Request written quotes from multiple lenders and compare the all in APR, including fees and insurance.

I guaranteed friend Sh5m Faulu loan, lost Sh32.5m property to auctioneers

Rate type and reset risk. Understand whether your loan is fixed for a period or variable against a benchmark. Ask how and when your rate can reset and recalculate your break even occupancy under that scenario.

Conservative leverage. In 2025, less debt often equals more sleep. A slightly larger down payment can bring your debt coverage ratio above safety thresholds and reduce the chance that a surprise repair pushes you negative.

9) Responsible rent setting and tenant onboarding

Price to your target return, not just to match neighbors. Use your net yield and cash on cash targets to set a rent floor that makes sense after expenses.

Offer clear prorated options for mid month leases. This is a win win. You maintain fairness and occupancy, and tenants pay only for the days they use.

Document and communicate. Provide an itemized first month statement that shows base rent, prorated days, deposit, and any utilities or service charges. This reduces disputes and speeds collections.

10) Exit strategy thinking on day one

Good landlords buy with the exit in mind. Three practical exit paths to evaluate upfront:

Hold and refinance. If rates fall and your property builds equity and a stable rent roll, a refinance can lock in better terms. Stress test this using equity growth assumptions that align with inflation and realistic appreciation.

Sell to an owner occupier or to another investor. Owner occupiers pay for lifestyle attributes while investors pay for yield. Upgrades should be targeted accordingly.

Know your tax context. Do not assume foreign style tax deferrals. Speak with a tax professional early so you do not assume benefits that are not available.

11) A simple first deal checklist

Validate market rent using three to five recent leases within one kilometer and the same unit type.

Build a conservative cash flow model that accounts for vacancy, operating costs, and realistic financing.

Stress test rent growth at CPI and at CPI minus one percentage point using current inflation as your baseline.

Compute move in prorations accurately and document them on the first invoice.

Project potential sale price scenarios with transparent, conservative appreciation rates and compare against inflation.

Recheck your deal against submarket yield evidence. If your net yield is far below the ranges indicated by independent research, renegotiate or walk away.

Bottom line for 2025

Rental property can still be profitable for first time investors in 2025, provided you buy for income rather than for speculative appreciation. Kenya’s inflation backdrop is supportive, policy rates have eased from earlier highs, and average rental yields have held up, but lending rates remain elevated and tenants are price sensitive. If you underwrite conservatively, insist on positive cash flow after a vacancy allowance, and run your numbers with the three calculators above, you can tilt the odds in your favor. Key indicators to watch as you evaluate specific opportunities include KNBS monthly CPI releases, CBK lending dashboards, BIS housing indicators, and local yield surveys that break outcomes down by unit type and neighborhood.

Yaya Centre, located along Argwings Kodhek Road, is one of the popular shopping malls in Nairobi.

The mall was founded in the 1980s and has over the years grown to become one of the leading shopping malls, housing over 100 shops and offices.

Previously owned by the Nicholas Biwott family, Yaya Centre’s ownership was in 2023 passed to the billionaire family of Rasik Kantaria in a deal that is estimated to be worth billions.

The Kantaria family has a long-standing history of entrepreneurial success in Kenya, with their first enterprise established in the country in 1896.

The family’s legacy in Kenya began when Kantaria’s grandfather migrated from India and settled in Limuru, where he operated a small shop with the dream of his getting his family out of poverty.

Through hard work, the small retail shop expanded into a successful sawmill and charcoal-selling enterprise. Kantaria’s grandfather would later relocate to Nairobi, where he established an auto spares shop.

Meet Kenyan billionaire behind popular Qwetu and Qejani hostels

Following his grandfather’s footsteps, Kantaria entered the service industry, founding Prime Capital and Credit Finance Company, which eventually evolved into a successful commercial bank.

The family has since expanded its portfolio with investments in various sectors, including finance, real estate, hospitality, horticulture, and manufacturing, among others.

Besides Yaya Centre, the Kantaria Family reportedly has established banks in Malawi, Botswana, Zambia, and Mozambique.

The family has an aluminium factory in Mombasa and also founded the East African Building Society. Other investments include Leisure Lodge, which is one of the most exclusive hotels in the Coastal region.

Besides his entrepreneurial success, Rasik Kantaria is also known for his philanthropic work and is credited with transforming local education and healthcare.

His contributions include the Jaipur Foot Project, which has transformed the lives of over 30,000 handicapped individuals by providing them with rubber-based prosthetic legs, enabling them to lead normal lives.

He is a longstanding Rotarian and has been awarded an Honorary Doctor of Humanities Degree by The United Graduate College & Seminary for his outstanding contribution to humanity.

The billionaire holds a Bachelor of Economics degree from London.

National Treasury Cabinet Secretary John Mbadi has admitted that the government is currently artificially managing the Kenya Shilling exchange rate against the dollar at 129. CS Mbadi said on Tuesday that the Kenyan currency could have strengthened to 118 to the US dollar if the government allowed it to move freely based on increased inflows of the US dollar into Kenya.

“The stability of the shilling has a basis. If it is just allowed to free fall, the shilling would even trade at 118 to the dollar. Our current account balance has been improving and our exports are doing better,” said Mbadi. This implies that the government may be deliberately keeping the shilling at a weak position against the US dollar.

For close to one year now, the local currency to USD rate has been within the range of 129 without any significant movements. This stability has raised eyebrows and questions from international bodied including the International Monetary Fund (IMF).

According to the IMF, the Kenyan currency’s rate against the dollar of between 129.22 and 129.24 since January 2025 has been too stable to be natural. This is even as the local currency weakened against the two other main currencies, the Sterling Pound and the Euro by 12 percent and 6.1 percent respectively.

According to a report that appeared in a local daily, analysts have suggested that the government is keeping the local currency weak against the US dollar by using the Central Bank of Kenya to purchase dollars from the market.

The currency’s current rate is despite the US dollar being weaker against major currencies in 2025. As at October 2025, the US Dollar had dropped nearly 10 percent against major currencies including the Euro and the Sterling Pound, placing it on course for the worst performance in a calendar year for the first time in more than 20 years.

In Kenya though, the dollar has remained steady as the government blocks the local currency from gaining against the US currency.

The shilling first took a turn for the worse after the August 2022 General Elections. Forex data from the Central Bank of Kenya shows that as at August 2022, the Shilling traded at 119.12 against the US dollar. It then went on a free fall.

READ MORE: Munga turns to wife to avoid auctioneers over multi-million ABC Bank loan

On January 15, 2024, the local currency recorded a nasty historical low after sinking past 160 to the US dollar. Later that month, it touched an all-time low of 161 on January 23, 2024. In February, the local currency made a sharp turnaround.

Between February 9, 2024 and February 29, 2024, the local currency went from 160 to 143.5. A month later, by March 28, the local currency was at 131.8, about 2 units shy of its current rate – nearly two years later.

Hiring managers don’t always say what’s on their minds, and sometimes this results in a less effective interviewing experience for you, the job candidate. But, regardless of how good or bad your interviewer is, you’ll very likely still get this question: “Why are you interested in this position?”

You Never Talk About the Company

When people answer, “Why are you interested in this position?” with something about being passionate about programming, writing or some other skill with no mention at all about the actual company, it’s immediately a red flag. Think about it this way: You can bring your skills anywhere. The trick is explaining why you want to use them for this particular company.

You Only Say What’s in it for You

This mistake is particularly common because, well, this is what the question is asking for, isn’t it? Maybe this job would give you the chance to learn a lot about marketing, or it’s an opportunity to grow your quantitative analysis skills—that’s great, but it’s not what your interviewer really wants to hear. At the moment, the hiring manager isn’t the most invested in what’s in it for you; he or she wants to know what’s in it for the company. The solution? Align your interests and say something about your enthusiasm for using your skills to contribute to the company’s greater goal.

Dos and don’ts: How to answer ‘What is your salary expectation’ question

You Bring Up Points That Aren’t Relevant

In the heat of the moment, it can be really tempting to reveal that the office is actually quite close to your daughter’s school or how the company’s flexible hours policy would make it easier to carpool with your roommate, but don’t give in. These are nice perks, but (hopefully) they’re not the only reason why this position is exciting for you. Plus, you’ll be giving up an opportunity to share the more relevant ones.

You Answer the Wrong Question

Have you ever gone on a date with someone who wouldn’t stop talking about his or her ex? Well, turns out this happens during job interviews, too. Don’t be that person who can’t shut up about why you need to leave your old job, stat. Even if the reason you’re job searching is directly related to your previous position, focus on the future. Bring up the skills you’ve developed for sure, but no need to dive into the history of how you acquired them.

source:themuse

Businessman Peter Munga has managed to stall a looming auction of his Britam shares valued at over half a billion shillings over a defaulted ABC Bank loan. This is after the businessman’s wife successfully asked the court to stop the auctioning of the 75 million shares claiming that they part of matrimonial property.

Rose Njeri, who is the wife of Peter Munga, told the High Court that since the shares were part of matrimonial property, they could not be disposed of without her consent. After her petition, the High Court ruled that she had an arguable case that her husband had pledged the shares to secure loans without consulting her.

The High Court then blocked ABC Bank from auctioning the shares until Njeri’s case is heard and determined.

Munga and Njeri’s tactic follows in the footsteps of a similar tactic that has been deployed by former cabinet secretary Moses Kuria and his wife Joyce Njambi Gathungu. Kuria had also turned to his wife in April this year to block the auctioning of his property by Equity Bank over a Sh54.3 million defaulted loan.

In that petition, Kuria’s wife had claimed that the property that was up for auctioning in Ruaka and Juja which she valued at Sh100 million is matrimonial property.

In April this year, Munga had lost his bid to block auctioneers from selling off his multimillion shares over a Sh433.76 million ABC Bank loan. This was after the High Court dismissed the businessman and lashed at him for filing multiple applications in various courts in hope that one of the courts would issue orders favourable to him.

Munga had filed a fresh case at the High Court following another ruling by High Court judge Alfred Mabeya. That ruling had given ABC the green light to auction 75 million shares that he holds at Britam Kenya over the debt that he had guaranteed one of his companies.

Justice Mabeya had ruled that the loan taken by Munga’s company remains in default and as such there is no reason why ABC Bank should not attach the shares.

“In the absence of such payment, the court finds that the prayer for a permanent injunction [by Munga] preventing the first defendant [ABC Bank] and ABC Capital from realizing the security [of 75 million shares] is untenable and is disallowed,” Justice Mabeya had ruled.

READ MORE: Peter Munga wins Sh150 million court case against ex-friend Muturi