My New Year's Resolution Was to Buy Idle Land, Now I Just Became a Landlord

EDITOR’S NOTE: This article is part of our Money254 Partner Series produced in partnership with Vuka, an investment club that allows Kenyans to invest in the Acorn Student Accommodation I-REIT.

As the clock struck midnight into 2024, I stood amidst the joyous New Year’s celebrations, making a resolution that had been on my mind for quite some time. 

For years, I had dreamed of owning a piece of land on the outskirts of Nairobi, a place where I could one day build a home for my family. This year, I promised myself, would be the year I made that dream a reality.

I've always believed in the power of real estate investments. Not paying rent, earning passive income, and appreciation over time. With property prices steadily rising in Nairobi and its environs, I was worried I may never own something of my own. This is why I decided I had to buy a piece of land even though it would lie idle for five or ten years as I saved up to build a home. 

I began the year with a clear plan: have a talk with my spouse, start saving diligently, cut unnecessary expenses, and research the best plots available within my budget. My target was to buy a small piece of land, around an eighth of an acre, in areas like Malaa or Isinya, where land was relatively affordable. I estimated needing about Ksh700,000 to secure a good plot.

Read Also: With Only 300K, I Now Earn Income From a Multibillion Property in Nairobi; How I Did It‍

The Journey to Becoming A Landlord

By March this year, I had managed to save Ksh135,000. I was on track. It was around this time that I had a conversation with my uncle, a man I deeply respect, trust, and look up to as a father figure. 

He has always been a source of wisdom in our family, particularly when it comes to financial matters. Over a cup of chai, I shared my plans with him, and he listened intently.

After I had finished, he leaned back in his chair and said, "Have you ever thought of an alternative to having all your money lie in a remote piece of land for years?" 

This was like a eureka moment for me. I had given thought to the inconvenience of having my largest asset lying idle in some far flung area - but I hardly knew another way to invest in real estate. 

Seeing my dazzled face, my uncle introduced me to the concept of Income Real Estate Investment Trusts, commonly known as I-REITs. 

An I-REIT is an investment vehicle that pools funds from multiple individual investors, enabling them to own a piece of real estate properties that are already generating rental income. 

Essentially, an I-REIT allows individuals like you and me to invest in real estate without having to buy, manage, or maintain property. 

All this is done under the regulation of the Capital Markets Authority (CMA). This concept fascinated me. Instead of buying idle land and waiting years to build on it, I could invest in I-REITs and start earning rental income in the form of dividends. How awesome!

My uncle, who is already a successful landlord with several rental properties, shared his experiences and the benefits of diversifying his investment portfolio with real estate assets managed by professionals. 

“This is the future of real estate, hassle-free!” he said, smiling brightly. 

Following my uncle’s advice, I dug deeper into the world of I-REITs and came across the Vuka Investment Club, a platform that simplifies investing in I-REITs for ordinary Kenyans. 

One of the I-REITs you can buy through the Vuka Investment Club is the Acorn Student Accommodation I-REIT - which is behind the famous Qwetu and Qejani brands of hostels. 

There are ten properties under the ASA I-REIT including buildings in Hurlingham, USIU, Karen, Ruaraka, Wilson View, Parklands, among others. Buying units in the ASA I-REIT automatically gives you an indirect ownership in these properties, depending on the number of shares/units you buy. 

Read Also: Vuka Investment: I-REIT Helping Kenyans Own Real Estate in Nairobi With as Low as Ksh5,000

Joining The VUKA Investment Club

To invest in I-REITs through the Vuka Investment Club, I started by filling in my details after which I was invited to the members’ investment club. I created a user account on the website and provided my details. I verified my identity as required by regulatory guidelines and funded my account by transferring funds from my bank account. 

I browsed through the Acorn Student Accommodation I-REIT (ASA I-REIT), with details such as property portfolio, the target returns (about 11% per annum), location of the properties, and recommended duration of investment. 

After I was satisfied, I started making my first purchases. A unit of the ASA I-REIT is currently retailing at Ksh22.03. I now monitor my investment performance on the platform to track returns and manage my portfolio.

Unlike my initial dream of owning land which required me to commit all my savings, the fact that I don’t have to raise large amounts upfront to invest has allowed me to start earning rental income with just a small portion of the money I had been keeping aside to buy land. 

I contribute just Ksh5,000 every month to purchase extra units, and I am still able to make my regular contributions to the Sacco and to my MMFs where I keep my emergency fund. 

Benefits of The Vuka I-REITs

Investing in Vuka’s I-REITs has come with numerous benefits when I compare it to my initial plan of saving to buy an idle piece of land in the city’s outskirts . 

Firstly, I started earning passive income without the hassle of building and managing property. This is something I had always thought would be possible in my 50s like my uncle.

Secondly, I am no longer confined to depending on a single property. By investing in the ASA I-REIT, I now own a share in multiple properties, diversifying my investment and reducing risk. 

This diversification means that even if one property underperforms, the overall impact on my returns is minimal. Additionally, I can sell my units with the same ease I have buying them on the Vuka platform. That’s just not the case with physical property.

Once I have saved enough to build my dream home, I will simply liquidate my units - as opposed to having that idle piece of land which would take months, if not years to get a buyer - not to mention the significant transaction costs.

One of my attractions to real estate is the capital appreciation bit. Just like a physical piece of land or a house, the properties where I have invested are appreciating as time goes by. The appreciation reflects in the value of my shares. 

I have started reinvesting part of my savings to buy more units in the ASA I-REIT, via Vuka, compounding my returns. By the end of the year, I hope to have earned a significant amount in rental income, far exceeding what I would have gained from leaving my money idle or even buying a small plot of land.

Read Also: Why You Should Consider I-REITs in Your Investment Portfolio

Looking Back

The peace of mind that has come with this investment is invaluable. I rest assured that my money is not lying idle in a bank account or in an idle piece of land. It is earning me rental income in prime areas such as Karen, Hurlingham, USIU area, and many other areas, allowing me to focus on other aspects of my life and financial goals.

Looking back, my decision to invest in I-REITs through the Vuka Investment Club is one of the best financial choices I have made. It has not only accelerated my journey towards earning rental income but my investment is appreciating as each day passes. 

This journey is not just about financial growth; it has also spurred significant personal development. I have become more disciplined with my finances, more knowledgeable about investment strategies, and more confident in making financial decisions. Would you like to join the Vuka Investment Club, you can get started here: