Rent to Own Kenya: Everything You Need to Know

Looking for a rental property, but with the option of buying in the future? What are the risks involved? Learn about rent-to-own houses in Nairobi.

Rent to own kenya

If you’re like most people, you probably think of rent-to-own homes as a last resort: a way to get into a home when you can’t quite afford the down payment or don’t have good enough credit to qualify for a mortgage.

But what if we told you that rent-to-own homes could be a great option for many people? That they offer several advantages over traditional home buying?

If that sounds interesting to you, keep reading. You will learn all about rent-to-own homes and why they might be right for you.

In this article, we will discuss everything you need to know about rent to own in Kenya. We will cover:

  1. Definition of Rent to Own
  2. How Rent to Own Works
  3. The Process of Rent to Own in Kenya
  4. Pros and Cons of Rent to Own
  5. Rent to Own Houses in Nairobi
  6. The Rent to Own Agreement

By the end of this post, you should have a good understanding of whether or not rent to own is right for you!

1. What is Rent to Own?

Rent to own, also known as rent to buy, is a type of contract in which the tenant has an option to purchase the property they are renting at some point in the future. 

Usually, this option expires after a certain number of years. In order to qualify for rent to own, you typically need to be able to afford both the rent and the down payment on the home.

The seller gets a fee, known as the option fee or option money which gives you the option of buying the house once the lease expires. This fee is non-refundable but it is negotiable and will range between 2% and 7% of the purchase price of the house.

The seller will hold a certain portion of the rent money as equity for buying the house.

There are 2 types of rent to own agreements:

Lease option: There is an option of buying the house once the lease agreement expires. If you change your mind, you can always move to another house with no obligations to the landlord.

Lease purchase: It is a legally binding contract where you are obligated to buy the house at the end of the lease whether you can afford it or not. It is usually hard to get out of this type of contract.

2. How Does Rent to Own Work?

renting to own apartment

When you enter into a rent to own agreement, you will pay a fixed amount each month for a certain number of years. 

This amount will be lower than the market rate rent, but it will still be more expensive than your average monthly rent payment. 

During this time, a portion of your rent payment will go towards the purchase price. When it comes time to buy at the end of your rental period, you will have paid down enough money that you can afford a mortgage and make an offer on the home.

3. The Process of Rent to Own in Kenya

There is no one size fits all when it comes to the rent to own process. However, most processes will entail:

Buying Price

The seller states the price of the house either at the start of your lease before you sign the agreement or when the lease expires.

The price of the house is based on the home’s current value. A house could either appreciate or depreciate by the time you are ready to purchase it.

Most buyers will want to decide on the purchase price before they move into the house to know what they’re working with and to avoid paying more if home prices in that location rise.

Paying Rent

When signing the contract, you agree on the amount of rent to pay each month. Your rent will be slightly higher than the other tenants because a portion of it, which is referred to as rent credit, will go towards purchasing the home.

Rent is 25% to 30% more compared to the usual rent price of that area.

Fine-tune these details beforehand to avoid having any misunderstandings with the landlord as time goes by.

Home Maintenance

Sellers are usually responsible for taking care of their property. But in a rent to own agreement, some will transfer the maintenance responsibility to you because technically you will end up owning the house so it will be your responsibility.

Because rent to own is a unique situation, the contract needs to state who does what in terms of maintenance and paying taxes such as property tax, insurance and more.

Buying the House

When the time comes to buy the house, mortgage financing will go a long way towards paying off the balance of the house. A mortgage adviser will inform you of the different options available and explain how the mortgage application process works.

When you sign the lease option contract and the lease expires, there is no obligation on your end to purchase if you happen to change your mind. Unfortunately, you will lose the option fee and any money paid up to this period.

4. Deciding Whether it is the Right Option for You

Before you decide on going this route, you need to know the benefits of rent to own properties in Nairobi and what the cons are. 

Advantages of Rent to Own

There are many benefits to choosing rent over buying outright including flexibility and fewer upfront costs.

  • You have more control over when (or if) you want to buy out your lease agreement before its expiration date. 
  • If there’s any major change in circumstances like job loss or divorce with kids involved then having this type of contract allows for an easier transition back into renting status without having purchased anything yet! 
  • Also, since rent payments contribute toward ownership they might not count as taxable income which could save some money on taxes when it’s time to sell down the road!


Rent to own can get risky. That is why should know your rights as a tenant beforehand to avoid getting duped in the deal. Here are some of the cons of rent to own.

  • If interest rates go up before you purchase, then your rent will increase accordingly while still paying off debt incurred during the rent-to-own period which means less available cash flow per month than had been anticipated when first entering into this kind of agreement. 
  • There could be potential problems with maintenance issues or repairs needed for the property since the landlord would need approval from the tenant before taking care of any necessary work done at the unit. 
  • You don’t have any say about what work is done to the property you live in.

5. Rent to Own Houses in Nairobi

If you’re looking for a rent to own properties in Nairobi, there are plenty of options available. You can find homes that are rent to own through real estate agents or online listings.

In Nairobi, most people prefer the traditional way of buying houses. In case you want to take this route, here is how to find houses with such an agreement.

  • Companies that advertise rent to own homes.
  • The landlord wants to sell their property.
  • If you approach the landlord and propose the idea.

Companies such as Rama Homes and Superior Homes have these houses readily available.

6. The Rent to Own Agreement

rent to own agreement

All the terms and conditions of the rent to own agreement should be put in writing when you get into a rent to own agreement. This document will serve as a reference for both parties throughout the duration of the rent to own agreement.

The following are some items that should be considered before signing a rent to own agreement:

  • The amount of rent that is due each month
  • Amount of downpayment
  • The length of time period for rent payments before becoming eligible to purchase the property
  • The interest rate on the purchase price and when it is payable
  • Who pays homeowner’s insurance, property taxes and other related costs
  • Any special clauses or conditions that need to be met in order for you to become the owner


Before you commit to this type of investment, doing due diligence and researching on the landlord/seller puts you in

All in all, rent to own can be a great option for those who want to buy a home but don’t have the funds for a down payment. 

It offers flexibility and allows you to take your time before making a final decision. 

However, it’s important to weigh the pros and cons carefully before deciding if rent to own is right for you. 

Before you commit to this type of investment, doing due diligence and researching on the landlord/seller puts you in a better space and well-armed with the right information to make an informed decision. 

Find out how long they’ve owned the property and if the title deeds are readily available.  

If you found this article helpful, share it with a friend.

EABL, Formerly at BuyRentKenya
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