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I have savings of ksh 1m to invest in a residential plot(1/8th of an acre) - not built - in the suburbs of Nairobi city - say 30km from the city (Kitegela). the plots cost from 2m-3m, is this a good idea ? I will have to take a bank loan of 1.5m to top up. I also have an option of buying an apartment 25km from the city almost the same price or higher.my third option is to buy some 2 acres in my home area in the country side - with title - and build a residence.

please advice which way i should take. currently am renting out a house in the city.

closed as primarily opinion-based by Lawrence, Dheer, Rupert Morrish, JoeTaxpayer Aug 16 at 16:28

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  • There are a lot of factors to consider: place of work, environment, community, etc. Since we don’t know your preferences and constraints, it’s difficult to answer this question definitively. – Lawrence Aug 15 at 15:28
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I have no idea about the econometrics of real estate in Kenya, but for the "rent vs buy" decision, the main financial factors are the interest paid on any loans (including buying the land and building the house), and all additional expenses associated with building a house, like taxes, maintenance, utilities, etc. If you pay less in interest (not your entire mortgage, since some of that is principal that is "banked" as equity in the house) and other expenses that your rent, then financially it is "cheaper" to own than rent. In some areas, renting is actually cheaper.

Liquidity may also be a concern. When renting, you can fairly easily decide to move (you just might have to wait until your leas is up or work out an early termination. Selling a house and buying another can be a more complicated process.

  • I think the OP is asking about buy X vs buy Y, not buy vs rent. – Lawrence Aug 15 at 15:25

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