Which Real Estate Investment Wins in Kenya (2025 Edition)

Kenya’s real estate market in 2025 is booming—but investors are increasingly asking: Should I buy land or invest in apartments? Both options offer distinct advantages, but they differ in terms of return on investment (ROI), rental yields, liquidity, and management complexity.

This guide compares plots and apartments using current market data, investor trends, and location-specific insights to help you make an informed decision.

1. Return on Investment (ROI)

Plots

Appreciation Rates: Land in satellite towns like Ngong, Kitengela, and Kisumu has appreciated by 12%–14% annually.
Low Entry Cost: Plots in areas like Machakos and Kisumu start from KSh 850K–1.1M, making them accessible for first-time investors.
No Depreciation: Unlike buildings, land doesn’t wear out or require renovations.

Apartments

Rental ROI: Apartments in Nairobi and satellite towns offer 7%–10% annual rental yields.
Capital Gains: Prime apartments may appreciate by 8%–12% annually, but oversupply in urban areas can slow growth.
Depreciation Risk: Buildings require maintenance and may lose value over time.

2. Rental Yields

Property Type	Average Rental Yield	Income Frequency	Management Needs
Apartments	7%–10%	Monthly	High (tenants, repairs)
Plots (leased)	2%–5% (if leased)	Seasonal/Annual	Low (if undeveloped)

Apartments generate immediate cash flow, but require active management.
Plots can be leased for farming or commercial use, but returns are lower unless developed.

3. Liquidity & Exit Strategy

Plots

Liquidity: Slower to sell, especially in remote areas.
Exit Options: Sell, lease, or develop. Value depends on infrastructure and zoning.

Apartments

Liquidity: Easier to sell in urban centers, especially if tenant-occupied.
Exit Options: Sell, rent, or convert to Airbnb.

4. Risk Factors

Risk Type	Plots	Apartments
Fraud	Title deed issues, fake sellers	Unapproved developments, poor workmanship
Market Saturation	Low in emerging towns	High in urban centers
Maintenance	Minimal	Ongoing costs
Regulation	Zoning laws, land use changes	Building codes, tenant laws

5. Investor Profiles

Plots: Ideal for long-term investors, land bankers, and those seeking low-maintenance assets.
Apartments: Best for income-focused investors, landlords, and short-term ROI seekers.

Final Verdict

In 2025, plots offer superior long-term appreciation and flexibility, especially in satellite towns benefiting from infrastructure upgrades. Apartments provide steady rental income, but face risks like market saturation and maintenance costs.

The winning investment depends on your goals: