Top 5 Reasons to invest in bedsitters in Kakamega

Bedsitters in Kakamega can be the best property investment you can make. When compared to the other rental units of the same quality like one or two bedrooms, the corresponding returns are way better.

Interestingly, the demand in this low cost housing options keeps on rising. This is occasioned by the high student accommodation needs undertaking their studies at the Masinde Muliro University of Science and Technology (MMUST). Various agencies and companies dotted around the town like the Kakamega County Teaching and Referral Hospital, County government lead the pack in bringing in many interns fancying these bedsitters.

Now, let’s see why this might be the best Property investment in Kakamega.

1. Affordability of building bedsitters

When it comes to building bedsitters in Kakamega, even Ksh. 500,000 goes a long way. For instance, let’s assume you’ve gotten a strategic 50*100 plot within the outskirts of town or near MMUST. That would cost you anywhere between Ksh. 500K to Ksh. 2M – based on the property availability and location.

With the plot secured, the next course of action is determining the type of bedsitter you intend to build. Will they be highrise or just on the ground? If you choose the ground level type, you save even much more since you won’t have to incur expensive substructure development and use of columns to support any above weight. This way, you can cut your accumulated costs by so much.

However, you will have to contend with less units on the plot. Depending on their sizes, could be around 12 units on each side. But if you choose to go up on successive floors, you get to multiply those units. Thus, if the ground floor would be 12 units on each side, and you do 3 floors, then you would end up with over 70 bedsitters. All on one plot! Lucrative right?

You would ask, how much are we looking at here? Going by the building rates reviewed by the Institute of Quantity Surveyors of Kenya, a Square Meter costs around Ksh. 25,000 – 30,000 for such development in Western Kenya. And with standard bedsitters being approximately 12M², one unit would cost you Ksh. 330,000 only.

Hence 10 units would only set you back Ksh. 3.3M. Do you realize that this amount wouldn’t be enough to finish even two units of a 2 bedroom house rental property? Well, now you do.

2. No Parking Space Demands

Okay the heading is abit shouting but generally you need very little parking spaces for a bedsitter development. Ideally, these units youths either undertaking their post secondary studies, on internship, just joined workforce or trying their luck in business.

Having this in mind, their priorities are usually elsewhere and not where to park a car. This is compared to bedroom house units where the tenants are established families with capacity to have cars. Majority, bedsitter tenants are basically looking for a place to lay their head and afford them comfort that single room houses can’t.

Therefore, the reduced need for parking grants you the opportunity to expand your units on this otherwise idle land. However, ensure to have atleast 2 parking spaces to be on the safe side.

3. High demand for bedsitters in Kakamega

Picture this, your son or daughter has been selected to join Masinde Muliro University of Science and Technology (MMUST). As a considerate parent, you choose to get a bedsitter for them. Your first channel to check is on Facebook where afew options come up and on following up you realize either theyre of poor quality or way far from school. Also, could even be going for Ksh. 9K due to demand.

Another scenario: you have successfully applied for an internship at the county government or the referral hospital and have to move to Kakamega. You check with your friends and nothing comes up. Call some of the property agencies in Kakamega and they have no vacancy units! You end up settling for a single room as your house search continues. Or have to trek several kilometers to your house very far.

Do those two scenarios make sense to you as an investor? Because this is an experience that both students, interns and young employees face every time they look for a bedsitter. This has led to the rents payable going as high as Ksh. 9K per month.

Now this is a perfect environment for investment right? Especially if you just price your units correctly and the market shall be yours for the taking.

Trust me, this is guaranteed!

4. Guaranteed Monthly Cashflows

Fourth reason to think bedsitter development is the free cashflows it guarantees. For the purpose of this article, free cashflows involves the monthly income that is realized when the tenants pay their respective rents.

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Let us compare an investment of Ksh. 3.3M in bedsitters and two bedroom units. For bedsitters, this amount would develop for you 10 units and only 2 units for two bedroom units. Both are to be rented out.

Assuming the bedsitters go for Ksh. 6K (less rental income tax of 10%); 10 units would make you Ksh. 60K on a monthly basis. Meanwhile 2 two bedroom units going for Ksh. 13K (less rental tax of 10%) would make you Ksh. 26K. That’s already Ksh. 34K less in realized income than bedsitters.

Here’s where it gets interesting. If both investments have a vacant unit atleast 3 month in a year, for bedsitters, that would only be Ksh. 18K in lost income. Yet for the two bedroom units, it would be a staggering Ksh. 39K!

You see, the logic is simple. Economies of scale hedges your investment since bedsitters has more people paying less money but accumulatively way more than the 2 bedroom tenants. Besides, chances of more than half of the units being vacant is unlikely to happen since they’re ten units. And a successive vacant unit is filled on a case to case basis.

While the 2 bedroom house units can easily go vacant all at once and stay that way for long. This is mainly due to the small target clientele such houses have to tap into.

5. Less demands on accessories

Lastly, for bedsitter tenants, basic finishes for the units where functionality is emphasized is enough. By this I mean, good working sinks, water taps, floor tiles, ceiling board etc and you’re good to go. You’ll rarely be asked for things like children play area and other related stuff.

That is different from the other developments like gated estates, two bedroom units where parking and children play area and green lawns determine whether you’ll get tenants or not.

In Conclusion,

Investing in bedsitters in Kakamega is a worth Investment that will generate returns for you for many years to come. As long as more youths pursue tertiary studies and move from the rural areas seeking opportunities.

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PS: Kindly note that this is for information purposes only and should not be taken to be investment advice by Valuable Homes Ltd.

For a more considered and tailored investment plan for you, email us at invest@valuablehomes.co.ke or call 0725121083.