Off Scams have been on the rise in Kenya over the last few years. This is an arrangement where you buy property before it is constructed or complete. In many cases, a 10 to 30% deposit is required. The advantages of buying off plan include high discounts and probable profits if the property value goes up. However, the risks in the Kenyan market are very massive. They include unpredictable market trends, loss of deposit and construction going over the sunset period.
Off Plan Scammers in Real Estate come in all ways, shape or form. Some look straight up gangster but a well-fitting suit and shiny shoes is the new trend. Even worse is a man of the cloth scamming you of your hard-earned money, case in point, Simple Homes. They promised citizens affordable housing which they never delivered. To appear legit, they showed investors houses that were simply not their project. Sadly, over 6000 people fell victim to this.
Some Projects Have No Hopes of Completion
One of the major risks of buying off plan is that construction could go over the stipulated time period. Some well-known real estate companies have stalled projects for over 5 years. In such cases, even if you get your deposit back, you make such a big loss. NB. Getting that deposit is not even guaranteed. Some of these companies are masters in rebranding. Therefore, finding the people to pin your loss becomes a challenge. Besides mismanagement of funds, some developers become over-ambitious and greedy. As such, they start new projects to fund old ones, a model that has proven to fail. This contributes to the off plan scams.
Property Value Depreciating
Some projects may also significantly reduce in value, resulting in huge losses. A unit may sell at Kes 4M off plan but then the value reduces to Kes 3.5M when complete. This could be attributed to factors beyond the developer’s control. Real Estate companies usually rush to locations where they anticipate development in infrastructure or social amenities. Kenya is still a developing country, as such, even change in legislation or representation could alter the course of development. Always keep this in mind before signing on the dotted line. In addition, always confirm that the road or airport the developers talk of stupendously has been approved.
Poor finishing and failure to deliver on exactly what was promised is also a leading reason for Off Plan Scams in Kenya. Developers may sell a plan full of luxury, only to deliver peanuts. Architectural designs usually sell on prestigious amenities like a swimming pool, fully fitted gym and high-speed lifts. If the developer does not follow through to ensure these are provided, the result is a downfall in property value. This is day-light theft because you, the client, had paid for it. A trusted real estate company should even deliver more than they promised.
Precautionary Measures To Avoid Off Plan Scams
First, before doing business with any Real Estate company, research them online. Find out what the public says about them. Some have become masters in deleting comments and this should be the first red flag. In as much as they sponsor hashtags to sanitize their names, they remain frauds! And it shows. The Kenyan media has been a comfortable home to these scammers. Do not take their word as Bible just because Maina Kageni talks well of them. They are in business. To add to that, make sure you do due diligence on the developers. What is their track record? Do they finish the projects they start? If they don’t, then what? The bottom line is to do thorough research.
Chief PR Specialists Those Ones!
As an aspiring homeowner, do not be fooled by full-page newspaper articles or splendid TV adverts during prime time. Many real estate companies know just what appeals to you, and how to play your mind. In today’s market, it is not surprising to see slay queens strutting the highways distributing property flyers they know nothing about. Sex sells. Dare you them what off-plan means, and they will be left mumbling, acknowledging can’t be bought. Beautiful stands on expos like the Kenya Homes Expo should not block your head as well. Real estate companies that know they are selling a far-fetched idea are grand at manipulation and PR. As such, always get a trusted company to give you the real tea. A good example is Kenya Homes.