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How to Determine Rental Prices in Kenya

You’ve already bought your buy-to-rent property in one of the thriving Kenyan markets. Now, it’s time to determine the right rent to charge your tenants. The rent you charge your tenants should be a determinant of whether your real estate business will thrive or not. 

If you are a first-time landlord, ensure you are conversant with the landlord and tenant act (2021) that protects you and the tenant. Alternatively, you can ask your attorney to pinpoint the critical and commonly used rules in real estate developments.

This guide will take you through the essential factors to consider while setting your rental price for the tenants. 

Factors to Consider When Determining the Rental Prices in Kenya


You’ll agree with me that different locations have different rent standards. Rich and middle-class individuals stay in areas with high-standard houses like gated communities and so forth. For instance, renting in Kileleshwa is different from renting in Mathare. 

However, your houses should match the standards of the neighboring apartments to compare rent with them. Don’t expect to charge a low-class home like a well-maintained apartment.

Mortgage monthly installments

An excellent monthly rental income should cater to all expenses, mortgage, and property insurance. That’s why you should consider your monthly mortgage payments before coming up with rent. 

From your monthly rental income, 50% should go to property expenses, including insurance, while the other half should pay the mortgage, and the rest is cash flow. 

While setting up a rent value, ensure you can cater to all those and still have a reliable cash flow to care for emergency needs.

The landlord and tenant bill

The landlord and tenant bill (2021) sets clear rules on what landlords should not exceed when determining their monthly rent. This bill also sets standards on how landlords should increase the monthly rent and how they should notify the tenants.

In terms of rent payment, the Act explains the rights of landlords and tenants as well. 

Therefore, when setting a rent amount, consider going through this bill or ask your attorney to brief you on what or not to do.

Cost of maintenance materials

The cost of living is very high nowadays. And inflation is at its peak. That means that everything, including construction materials, is growing more expensive day by day. As a result, you need a higher monthly rental income to maintain your property to higher standards.

When setting up your monthly rent, consider the market prices of construction materials.  That will help you factor in those costs to generate a fair monthly rent. Furthermore, the standard of your house determines how much it’s gonna spend during renovations.

What’s your desired cash flow?

You are left with cash flow after paying all expenses, including monthly mortgages. If you need a higher cash flow, you need to set a higher rent amount to cater to that. 

However, cash flow depends much on the rate of occupancy. So, you may get your desired cash flow if the houses are over 90% occupied. 

A good cash flow ensures you can save some funds for sorting out emergency needs of the property before tenants pay their rent.


Owning real estate is one thing and getting the returns is something else. To gain high returns, you should set reasonable rent standards that will bring your more tenants. Remember to research the neighborhood cost of living and the rent standards before settling for a rent amount.

Frequently Asked Questions

  1. When should a landlord increase rent?

Landlords are free to increase rent once per year for residential houses and once in two years for commercial rentals. The landlord can increase rent whenever the cost of living is high because the maintenance cost will alos be high.

  1. How do I calculate rental yield?

Take your monthly rental income and multiply it by 12 months to get your annual rental income. Afterward, divide the yearly rental income, then multiply it by 100%. You’ll get the annual and monthly yield in percentage.

  1. How do you budget your rental income?

The best way to budget your rental income is to assume that 50% of gross monthly rent goes to expenses. Take out monthly mortgage installments from the remaining half, and the balance should be the business cash flow.

  1. Is the rental property worth it?

If maintained well, rental property could give you a steady passive income for many years. Therefore, you can retire early if you wish to. Real estate investment is the most reliable long-term investment in Kenya. 

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