Owning a home in Nairobi can feel like a distant dream for many, given the ever-rising property prices and the challenges of securing a mortgage. However, rent-to-own agreements offer an alternative path to homeownership, allowing tenants to gradually transition into buyers.
At Epic Prime Real Estate Brokers, we have witnessed a growing interest in this model, particularly in booming Nairobi suburbs like Ruaka, Syokimau, and Thindigua. But before you sign on the dotted line, it’s vital to ask the right questions to ensure you’re making a well-informed decision.
Below, we outline five key questions that will help you navigate rent-to-own agreements with confidence.
1. What Is the Purchase Price, and How Is It Determined?
One of the most important aspects of a rent-to-own contract is the purchase price of the property. In some agreements, the price is set upfront, meaning you lock in the cost today—potentially shielding yourself from future price increases in Nairobi’s fast-growing real estate market.
However, in other agreements, the price is based on a future appraisal, which means it could increase if property values rise. Before committing, ask:
Is the price fixed or subject to change?
How does it compare to similar properties in the market?
Will I have the option to renegotiate the price if the market shifts?
For example, if you’re considering a Ksh 8 million apartment in Kilimani, compare this with similar listings on platforms like BuyRentKenya to ensure you’re getting a fair deal.
2. How Much of My Rent Goes Toward Ownership?
A major appeal of rent-to-own agreements is that a portion of your rent may be applied toward the home’s purchase. However, this varies by contract.
For instance, if the market rent for a unit in Westlands is Ksh 50,000 per month, your rent-to-own agreement might require Ksh 70,000, with Ksh 20,000 credited toward your future down payment.
Before signing, clarify:
What portion of my rent contributes to ownership?
How is it tracked and documented?
What happens to these credits if I decide not to buy?
In Kenya, developers offer rent-to-own plans, but their terms differ. Make sure the contract explicitly states how your payments build equity in the property.
3. What Are the Terms for Backing Out?
Life is unpredictable. Whether due to a job relocation, financial difficulties, or a change of plans, you might need to walk away from the agreement.
Rent-to-own contracts generally come in two types:
Lease-Option: You have the choice to buy or walk away at the end of the lease.
Lease-Purchase: You are legally obligated to buy at the end of the lease term.
Before signing, ask:
If I back out, what penalties will I face?
Will I lose my option fee and rent credits?
Are there any legal or financial consequences?
For instance, if you paid an option fee of 3% (Ksh 240,000) on an 8 million property, you risk losing that amount if you don’t proceed with the purchase. Nairobi’s competitive market requires careful consideration before entering into a legally binding contract.
4. Who Handles Maintenance and Repairs?
Unlike traditional rentals, where landlords typically handle maintenance, rent-to-own agreements often shift some or all of the repair responsibilities to the tenant.
Before signing, ask:
Who pays for maintenance and repairs?
Are there any limits on the tenant’s responsibility?
Will the landlord cover major structural issues?
For example, if you’re renting a townhouse in Lang’ata and discover a leaking roof, are you responsible for fixing it, or does the owner cover such expenses? Understanding these terms upfront can help avoid unexpected financial burdens.
At Epic Prime, we recommend conducting a professional property inspection before committing to a rent-to-own agreement to identify potential issues.
5. What Are the Financing Requirements at the End?
Most rent-to-own agreements assume that by the end of the lease, the tenant will secure a mortgage to finalize the purchase. However, obtaining financing isn’t always guaranteed.
Before committing, ask:
What happens if I can’t get a mortgage?
Are there alternative financing options available?
Can I extend the lease if I need more time?
In Kenya, mortgage lenders such as Housing Finance Group (HFG) and Kenya Mortgage Refinance Company (KMRC) evaluate buyers based on income, credit score, and savings.
Imagine you’ve been paying Ksh 75,000 monthly toward a rent-to-own unit in Ruaka, only to be denied a mortgage at the end. Without a financing backup plan, you risk losing both your investment and the home.
Consult a financial advisor or a real estate expert to ensure you have a realistic plan for securing a mortgage when the lease term ends.
Why Rent-to-Own Is Gaining Popularity in Nairobi
While rent-to-own agreements remain a niche option in Kenya, they are gaining traction as real estate prices surge and mortgage approvals remain difficult for many buyers.
This model is particularly appealing in areas like:
Kiambu Road – A growing suburb with modern developments.
Syokimau – Attractive for young professionals due to its proximity to the SGR railway.
Thindigua – A hotspot for middle-income homebuyers.
With infrastructure improvements such as the Nairobi Expressway driving demand, more landlords and developers are exploring rent-to-own agreements as a way to attract committed buyers.
Conclusion
A rent-to-own contract can be a smart way to achieve homeownership in Nairobi, but only if you enter the agreement with full knowledge of its benefits and risks.
Before signing:
✅ Verify the purchase price and ensure it aligns with market trends.
✅ Confirm how much of your rent will go toward ownership.
✅ Understand the consequences of backing out.
✅ Clarify maintenance responsibilities.
✅ Have a solid financing plan for the future.
At Epic Prime, we specialize in guiding Nairobi homebuyers through the complexities of rent-to-own agreements. Whether you’re eyeing a property in Kileleshwa, Runda, or Kilimani, our experts will help you navigate the process with confidence.
🔎 Looking for rent-to-own opportunities in Nairobi? Contact us today and take the first step toward homeownership!
