The tenant purchase scheme is an alternative payment method for property acquisition whereby the home buyer makes a down payment and is able to access the facility before fully paying for it within an extended period of time.
In November last year, Safaricom Investment Co-operative (SIC), the investment arm of Safaricom Limited, took a risk and adopted tenant purchase scheme for its Blue Bells Apartments project in Syokimau. “We wanted to widen the scope of home ownership by making the payment process flexible, easier and to accommodate more prospective home buyers,” SIC Chairperson Mackrine Abukah, told the Daily Nation.
Within just three months, they hit over 25 per cent of their 2016 sales target.
By January 31, 2017, all the 160 units in Bluebells Apartments phase one were taken up. “We realised that there was a big market gap that had not been tapped into. The tenant purchase scheme came in handy to address the home-ownership needs of this market; the un-salaried business people,” Abukah adds.
The sale extended to phase two of the project, whose construction is still ongoing and expected to be completed this month.
Phase one of Bluebells Apartments features 60 two bedroom units and 100 three bedroom units.
“The two bedroom units took longer to gain occupancy. The market is in need of three bedroom units, what they view as a complete family house,” she adds. The slow uptake of the two bedroom units informed the design of phase two, which features all 140 three bedroom units.
Phase one, which had more units than phase two, incorporated the setting up of shared social amenities such as cabro-paved pavements and parking spaces, walled and electric fencing, boreholes to complement council water supply, waste water and sewer treatment system, standby generator, solar street lighting and a 24-hour security manned gate. All these pushed the cost of the investment to Sh850 million, while phase two cost Sh600 million.
the SIC tenant purchase scheme offers great flexibility as the homebuyer is allowed five years to make monthly payments. The three bedroom units are going for Sh7.4million, attracting Sh740,000 deposit, which one is allowed to pay within 90 days. “This purchase concept has endeared the model to business people and the self-employed,” says Abukah.
The remaining balance is cleared with monthly repayments of Sh140,000. Within the 90-day period, Abukah says that most of their clients have put even more to the deposit so that the monthly repayments are almost equivalent to their rent, yet they can live in the house or rent it out.