Want a share of the cash in land sales? Then look beyond money

Perminas Kiage the Chief Executive Officer (CEO) of Landlord Holdings Ltd that deals in lands and real estate, during the interview.

NAIROBI: During an interview with Perminus Kiage, we were interrupted by several calls to his phones. The founder and CEO of Landlord Holdings Ltd did not just have to contend with call after call, there were also several clients lined up outside his office waiting to transact business.

But Mr Kiage, 32, is far from feeling stressed about the demands on his time – for him, being this busy is a miracle.

There was a time his business, which is involved in buying and selling land, collapsed, and he was out of commission for a year. It was a devastating time.

“I had rushed into this business after realising it had money. I started well, but after one year, it collapsed. I never thought this business would ever get back to its feet,” he said.

Today, Kiage handles millions of shillings from land sales in a month, but the biggest lesson he has learned from starting and running a successful business is you have to look beyond the money it will bring it. Market research is very important.

Kiage was fresh from completing his diploma in automotive engineering at the Nairobi Technical Training Institute (now Technical University of Kenya) when his land agent friends got him interested in the land and real estate business.

First client

His first client was looking to sell a large chunk of land. With the help of his friends who had more experience, Kiage got the official go-ahead to sell the land.

“I sold it all after sub-dividing it into small parcels, and made Sh300,000 in the deal,” he said. It was a great start.

Dazzled by the big money exchanging hands in land sales, Kiage applied for a Sh3 million loan and bought land in Ole Polos, Kitengela and Kajiado for resale.

But instead of selling the land in eighths of an acre, he opted for half-acre plots at Sh500,000 and above to make more money.

“This is where the problem started as l was targeting rich people, but they were going for established companies. After three months of no sales and no money coming in, all operations, including office rent, stopped. I closed my business in 2013,” he said. Luckily, he still had his land.

Kiage says for the year he was out of business, he embarked on intensive market research and consulted people who were in the land sales sector.

“I learned the best way to make sales is to target the majority low and middle-income earners, and a few rich people.”

Restarted operations

After taking in these lessons, Kiage took a soft loan from a friend and restarted operations in late 2014. He sub-divided his land into eighths, which allowed for lower prices that attracted buyers.

Now, he said, business is good.

“I learned and corrected my mistakes,” he said.

He sold all the land he had bought, took another loan and expanded the business. He currently owns lands in Ole Polos, Kitengela, Kisames and Ruiru, about 200 acres in total. All parcels are sold in eighths and target different categories of buyers.

For instance, Ole Polos plots start at Sh100,000, Kisames plots at Sh300,000, Kitengela at between Sh500,000 and Sh1.8 million, and Ruiru at Sh2.5 million.

Kiage also employed marketing agents to sell the plots and bring regular feedback from the market to improve sales. For instance, his business has learned to sell land to low-income earners in instalments as low as Sh200 a day, or Sh14,000 a week.

Kiage cites the biggest difficulties in the sector as accessing loans, especially for young people who may have a hard time winning the trust of financial institutions. There is also high competition from more established companies with more to spend on marketing.

Kiage said to maintain a steady stream of income, he plans to construct housing units for low-income earners in Rongai and Utawala, before moving to areas like Nakuru and Thika.

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