plots or investing in REITs in Kenya- understanding your options in 2026
MoneyMarketHubKenya
Investment insights for Kenyans – REITs, MMFs, SACCOs, and property
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TL;DR – Quick Summary
- Idle Plots: Tangible land, high growth potential, low liquidity, high upfront cost.
- REITs: Real Estate Investment Trusts – easier to start, liquid, passive income, low capital entry.
- Best Strategy: Mix both depending on goals, risk appetite, and time horizon.
- Target Audience: Beginners, salaried workers, chama members, small traders, and Kenyan investors.
Why Kenyans Are Confused About Real Estate Investments
Many Kenyans ask: “Should I buy idle plots or invest in REITs?”
Confusion arises because:
- Land is tangible but illiquid.
- REITs are easier to access but less understood.
- Inflation, rising property prices, and low-interest bank accounts complicate decisions.
This guide explains idle plots vs REITs with real KES examples, NSE/CMA/MMF comparisons, and practical scenarios.
1. Investing in Idle Plots of Land
Idle plots are undeveloped land that investors buy and hold for future appreciation.
Pros
- Tangible asset you can see and manage.
- High potential returns if near development corridors.
- Full control over timing and use.
Cons
- Low liquidity; can take months/years to sell.
- High upfront cost (e.g., 0.25-acre plot in Athi River costs KES 2–3M).
- Ongoing expenses: property taxes, fencing, and security.
- Market-dependent growth.
Example
In Nairobi suburbs like Kitengela, a plot bought for KES 2M in 2015 appreciated to ~KES 8–10M due to infrastructure and urban expansion.
Best For: Investors with capital, patience, and long-term planning.
Internal link: Top Locations to Buy Land in Kenya
2. Understanding REITs in Kenya
A Real Estate Investment Trust (REIT) is a company that owns income-generating property. Investors buy units instead of physical property.
How They Work Locally
- Investors pool money in a REIT.
- The REIT buys rental properties like offices or malls.
- Tenants pay rent, generating revenue.
- Kenyan law mandates 90% of rental income is distributed as dividends.
- Unit prices can appreciate over time.
Pros
- Low capital entry (KES 5,000+).
- Passive income through dividends.
- Professionally managed and diversified.
- Liquid; easier to buy/sell than physical property.
Cons
- Unit prices fluctuate with NSE.
- Limited control over property management.
- Management fees slightly reduce profits.
Examples of REITs
- Fahari I-REIT: Invests in Nairobi office buildings, paying quarterly dividends.
- Growthpoint REIT Kenya: Mix of offices and retail centers.
Observation: REITs are ideal for salaried workers and chama members with limited capital who want steady income.
Internal link: How to Start Investing in REITs in Kenya
3. REITs vs Shares vs MMFs – Quick Comparison
| Feature | REITs | Shares | Money Market Funds (MMFs) |
|---|---|---|---|
| Asset Type | Real estate | Company equity | Short-term debt instruments |
| Income | Dividends (rental) | Dividends + capital gains | Interest |
| Risk | Moderate | High | Low |
| Liquidity | Medium (NSE) | High (NSE) | Very high |
| Min Investment | KES 5,000+ | Varies | KES 500–1,000 |
| Control | Limited | Some voting rights | None |
| Return Potential | Moderate to High | High | Low |
Example: A boda boda rider saving KES 5,000/month in a REIT can earn dividends while keeping money accessible.
4. Idle Plots vs REITs – Head-to-Head
| Factor | Idle Plots | REITs |
|---|---|---|
| Liquidity | Low | High |
| Entry Cost | High | Low |
| Control | Full | Limited |
| Income | Only if rented or developed | Regular dividends |
| Risk | Location & market dependent | Market & management |
| Diversification | Low | High |
5. Who Should Invest Where
- Idle Plots: Long-term investors with capital.
- REITs: Passive income seekers and small capital investors.
- Balanced Strategy: Combine REITs for income, idle land for growth.
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