Landlords in Kenya now shunning property agents
| October 14th 2014
NAIROBI-- The newly completed five-storey building in Umoja, on the east of Kenya's capital Nairobi, dwarfs the rest in the neighbourhood. It is three-quarter full with tenants, and a notice on the metal gate asks anyone interested in living there to contact a certain number. At the end of the notice, however, there is an interesting assurance written in bold to potential tenants. It reads, "Talk to the landlord, no agents please."
"If you call the phone number, you will talk to the landlord himself, we do not deal with agents here," said a caretaker identified as Mwangi, who added that two-bedroom houses were going for 202 U.S. dollars and the three-bedroom ones at 270 dollars. Mwangi's employer is among a growing number of landlords in Nairobi, who are shunning property agents in a bid to avoid bureaucracy and maximize earnings from their properties.
The agents, who have become part and parcel of the booming Kenya's real estate sector, manage properties on behalf of landlords on commission of between 5 to 10 percent of rent paid. Their duties include getting new tenants, clearing those who are vacating houses, carrying out repairs in case of any fault and, most important, collecting rent and ensuring everyone pays.
With a majority of property agents managing more than one houses, they are reaping huge from the sector estimated to be over 4.5 billion dollars. Rise in demand for their services has made some of the agents increase charges. On the other hand, many tenants have nasty experiences with property agents, a reason why majority insist on negotiating with the landlords to move into a house. It is for these reasons that the landlords are now shunning property agents.
In their place, however, they are employing caretakers who undertake day-to-day management of the houses because they live within the compounds. "Caretakers are 10 times better than property agents because they stay with the tenants, thus, will know their problems and inform the landlord," said Nahashon Juma, who has a four-storey flat in Ruai, on the outskirts of Nairobi. "Most property agents will get complaints from tenants and then sit on them. The landlord for instance may come to know that the shower is not working after many months," Juma said.
To pay rent, Juma has instructed his tenants to deposit money in a certain bank account and pass the original deposit slip to the caretaker, who will in turn give him. "The system has worked ever since I completed building my houses about two years ago. If I was dealing with a property agent, I would pay him commission and yet he will not even ensure my tenants are comfortable because he has dozens of flats to manage," the landlord said.
Tenants said they prefer staying in houses managed by landlords themselves because they can talk to them directly if they have challenges. "If the house has a problem, I can call and talk to him directly. We can even negotiate that I repair for instance the door or shower and deduct on rent. With agents you cannot," said Grace Akoth, a tenant in Nairobi.
Antony Kuyo, a property agent with Avent Properties, a real estate agency, acknowledged that a good number of landlords are managing their houses themselves. "Since the year started I have lost five landlords, who opted to manage their properties. Though I have gained few others, it is a great setback since I would now be having more clients," said Kuyo.
He, however, noted majority of the landlords opting to go it alone are those who have one or two flats. "I do not think anyone with three or five properties scattered across Nairobi would want to manage them himself. We still have good business," he said.
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