- Saving money is a priority for most of us.
- When it comes to real estate, the biggest question is: should you rent or buy? Which one actually saves you more money in Kenya?
- Renting is the go to choice for most people living in major towns in Kenya.
- Buying a home is a great investment and a huge financial commitment that comes with a number of benefits.
Let’s be honest, saving money is a priority for most of us. Whether it’s looking for the best deals at the supermarket, choosing a fuel-efficient car, or skipping that overpriced coffee, we all try to make smart financial choices. And when it comes to real estate, the biggest question is: should you rent or buy? Which one actually saves you more money in Kenya?
For many Kenyans, owning a home is the ultimate dream. It’s seen as a sign of financial success and stability, and there’s a widespread belief that buying is cheaper than renting in the long run. But is that really true? Let’s break it down and see if the numbers support this common belief.
Table of Contents
The Cost of Renting in Kenya
Renting is the go to choice for most people living in major towns in Kenya. This is because it offers flexibility and lesser upfront financial investment compared to buying a home.
Pros of Renting:
- Lower Upfront Costs – You typically only need a security deposit (one or two months’ rent) and the first month’s payment. This is way more affordable compared to buying.
- Flexibility – If your job requires frequent relocations or you’re still figuring things out, renting gives you the freedom to move easily.
- No Maintenance Costs – If the plumbing breaks down or the roof starts leaking, your landlord foots the bill.
- No Mortgage Stress – No worries about loan repayments, fluctuating interest rates, or being in debt for decades.
Cons of Renting:
- No Equity or Ownership – Unlike homeowners, renters don’t build wealth through their monthly payments.
- Uncertain Rent Prices – Your rent can increase yearly, and you could be forced to move if the landlord decides to sell the property.
- Limited Control – You may not be able to renovate or make major changes without the landlord’s approval.
Rent prices vary depending on location. A one-bedroom apartment in Nairobi’s Kilimani or Westlands can cost Ksh 40,000–70,000 per month, while the same in Ruaka or Kitengela is around Ksh 20,000–35,000
The Cost of Buying in Kenya
Buying a home is a great investment and a huge financial commitment that comes with a number of benefits.
Pros of Buying:
- Builds Equity – Every mortgage payment increases your ownership of the house, unlike rent, which only benefits the landlord.
- Stability and Security – You don’t have to worry about landlords kicking you out or unexpected rent hikes.
- Property Appreciation – Land in Kenya generally appreciates over time, making homeownership a great long-term investment.
- Rental Income Opportunity – You can rent out part of your home to generate extra income.
Cons of Buying:
- High Upfront Costs – When buying a house, you’ll need at least a 10–20% down payment, plus legal fees, stamp duty (2–4%), and other costs. Compared to renting, this is most definitely on the higher side.
- Mortgage Payments Can Be Costly – Mortgages in Kenya are a bit higher when compared to other markets. As of now, the rates range from 12–16%, which means you could end up paying almost double the original price over the loan period.
- Maintenance Costs – Unlike in rentals where you quickly run to the landlord to fix the wear and tear of your house, the bill of every little repair becomes your responsibility.
- Extra Costs of Living in a Gated Community – If you purchase a home in a gated estate, be prepared for additional monthly maintenance fees beyond your mortgage. These costs typically cover security, landscaping, and communal amenities.
To put this into perspective, let’s consider an example. Currently, buying a two-bedroom apartment in Kilimani or Kileleshwa costs between Ksh 10 million and Ksh 15 million. Say to take out a 20-year mortgage at 13% interest on a Ksh 10 million property, your monthly payments would range between Ksh 130,000–150,000, which is significantly higher than renting a similar unit.
Which Option Saves More Money?
In the short term, renting is undoubtedly the cheaper option since it requires less upfront cash and generally has lower monthly costs. However, it doesn’t build equity, meaning all the money spent on rent goes to the landlord with no long-term financial benefit. On the other hand, buying a home involves high initial costs and often results in higher monthly payments due to mortgage rates, but it allows you to build wealth over time as property values appreciate. If you plan to stay in one place for a long time and can afford the investment, buying could be the better financial move. But if flexibility and lower financial commitment are your priorities, renting might make more sense for you.
Conclusion: Should You Rent or Buy?
- If you have a stable income, plan to stay in one place long-term, and can afford a mortgage, buying a home in Kenya is a great investment.
- If you prefer flexibility, lower costs, and less responsibility for maintenance, renting might be the smarter choice.
At the end of the day, the best option depends on your financial situation, lifestyle, and future goals. The key is to assess what works best for you, whether it’s the freedom of renting or the stability of homeownership.