Investing in land in 2023 is one of the most promising ventures that can reap big returns in the near future. This is due to the fast appreciation in value as time passes by. 

Note: Land never depreciates unless left unmaintained or unutilized so it is always advisable to maintain land to add its value as illustrated in this blog here.  Land, unlike other commodities is highly overboard with prices ranging above 500K which requires adequate finances to purchase a plot. 

Unfortunately, financing a land investment has been a major constraint amongst many land investors in Kenya. At times an investor’s budget can get misaligned with the land they want to acquire hence slowing down their purchase plans. 

What if there were options to run to when finances aren’t enough? Land investment would be seamless for sure guaranteeing huge yields soon after.  Luckily enough, funding institutions like banks, saccos and private lenders have opened the possibility of investors to get loans for their land investments. For example; client A has 350K to purchase a plot in Kikuyu from AMCCO Properties Limited but the plots are only selling above 550K. The client is open to borrow a loan from their respective lender and top up the remaining 200K amount. 

 Below are some funding institutions, options and their processes towards investing in your next land purchase. 

land1.Personal Savings 

Using your personal savings is the easiest and quickest option when investing in land. After land shopping, it’s advisable to consolidate the required amount and pay instantly for land that interests you at the time.  Beware of market prices that keep on increasing overtime and without realization you might be left out after the pricing picks past your budget.  More often personal savings are fixed hence this calls for purchase before the market prices increase and hinder you from purchasing the land. 

2.Private Lenders like Shylocks 

Getting loans from private lenders is a good and quick fast funding alternative when personal savings are inadequate. Shylocks are popular in these fields as they offer quick loans in exchange for valuable goods equal to the loan. They will withhold your goods for an agreed duration until you pay back the amount in full with interest. 

The downside to this funding option is a lender might loose their goods if he/she isn’t able to pay back the loan on time.  More often, loans from shylocks are limited and might not be enough for a full land purchase hence its advisable to add your personal savings on top of the loan to fulfill the investment amount. 

3.Bank and Sacco Loans 

Banks and saccos are reliable funding institutions as they offer huge amounts of money based on your financial history, credit score, relationship and reputation with them. Example; A client might receive loans from 50K to even 5 Million per request to fund their land investment plans. Unlike personal savings and private lending options, this one is way promising and fruitful since one loan is enough to acquire several plots at once. These loans are favorable with their flexible payment plans 

The loan amount is determined by the client’s credit score. 

Unfortunately, this option is not so efficient and cannot be relied on for very urgent purchases as loans take some time to be approved. On the other end, your land might be registered as loan security for the loan and when not paid on time, the land will be taken from you hence losing your investment. Banks and Sacco loans are risky but very worthy when paid as agreed on paper. 

It’s advisable to liaise with your respective bank or Sacco to determine the process and duration of acquiring a loan upfront before or when shopping for land. 

4.Joint Groups like Chamas 

Chamas are well known for their success and distribution in every corner of Kenya. For clarification, chama is a financial group with more than 2 members saving substantially with a common aim. More often chamas are used to save money which goes in a merry go round distribution system amongst members. As a chama member, you can use the money offered to you upon your turn in the system to purchase land. Alternatively, some chamas offer loans to members based on their membership savings history. 

Loans from chamas are quite fast; it’s not a guarantee for huge amounts unless the chama is well developed from enormous contributions from members. Some chamas are specifically formed to purchase goods for their members e.g. Land chamas. As a land investor you should probably join a land chama since they will understand your plan and support it fully. 

5.Investment Partnerships  

Over the years, individuals with common goals and aims have worked out most successful projects as partners.  This works well when you find another individual in want of land but facing financial constraints as you. The best approach is consolidating funds together and purchasing land with a common goal towards its utilization. 

Partnerships can be formalized by signing agreements to avoid future disagreements or misconduct after purchase. Investment partners can resell the land or lease to developers for residential purposes to gain back profits. Alternatively, the land can be used for personal residential purposes among the partners. 

An Investor can partner with the land seller to purchase the land with a deposit then develop rental units that will gain back profits to be used to pay the deficit later on. 

 There are so many funding options and the above mentioned are just a few best ones you should consider when investing in land.  The suitable one relies upon you to choose and utilize based on your land acquisition plans. 

For more land investment tips, call us today via 0701 293 199 or email us at