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Rent to Own Kenya: Everything You Need to Know

Rent to Own Kenya: Everything You Need to Know

Rent to Own Homes in Kenya: A Flexible Path to Homeownership

If you’re like most people, you probably think of rent-to-own homes as a last resort: a way to get into a home when you can’t quite afford the down payment or don’t have good enough credit to qualify for a mortgage.

But what if we told you that rent-to-own homes could be a great option for many people? That they offer several advantages over traditional home buying?

If that sounds interesting to you, keep reading. You will learn all about rent-to-own homes and why they might be right for you.

In this article, we will discuss everything you need to know about rent to own in Kenya. We will cover:

Rent to Own Kenya: Everything You Need to Know

1. What is Rent to Own?

Rent to own, also known as rent to buy, is a type of contract in which the tenant has an option to purchase the property they are renting at some point in the future.

Usually, this option expires after a certain number of years. In order to qualify for rent to own, you typically need to be able to afford both the rent and the down payment on the home.

The seller gets a fee, known as the option fee or option money which gives you the option of buying the house once the lease expires. This fee is non-refundable but it is negotiable and will range between 2% and 7% of the purchase price of the house.

The seller will hold a certain portion of the rent money as equity for buying the house.

There are 2 types of rent to own agreements:

Lease option: There is an option of buying the house once the lease agreement expires. If you change your mind, you can always move to another house with no obligations to the landlord.

Lease purchase: It is a legally binding contract where you are obligated to buy the house at the end of the lease whether you can afford it or not. It is usually hard to get out of this type of contract.

2. How Does Rent to Own Work?

When you enter into a rent to own agreement, you will pay a fixed amount each month for a certain number of years.

This amount will be lower than the market rate rent, but it will still be more expensive than your average monthly rent payment.

During this time, a portion of your rent payment will go towards the purchase price. When it comes time to buy at the end of your rental period, you will have paid down enough money that you can afford a mortgage and make an offer on the home.

Rent is 25% to 30% more compared to the usual rent price of that area. This increase in rent allows for a portion of the payment to be credited toward the eventual purchase of the property.

3. The Process of Rent to Own in Kenya

There is no one size fits all when it comes to the rent to own process. However, most processes will entail:

Buying Price: The seller states the price of the house either at the start of your lease before you sign the agreement or when the lease expires.

Paying Rent: When signing the contract, you agree on the amount of rent to pay each month. Your rent will be slightly higher than the other tenants because a portion of it, which is referred to as rent credit, will go towards purchasing the home.

Rent is 25% to 30% more compared to the usual rent price of that area.

Home Maintenance: Sellers are usually responsible for taking care of their property. But in a rent to own agreement, some will transfer the maintenance responsibility to you because technically you will end up owning the house, so it will be your responsibility.

Buying the House: When the time comes to buy the house, mortgage financing will go a long way towards paying off the balance of the house. A mortgage adviser will inform you of the different options available and explain how the mortgage application process works.

When you sign the lease option contract and the lease expires, there is no obligation on your end to purchase if you happen to change your mind. Unfortunately, you will lose the option fee and any money paid up to this period.

4. Deciding Whether it is the Right Option for You

Before you decide on going this route, you need to know the benefits of rent to own properties in Nairobi and what the cons are.

Advantages of Rent to Own:

  • More flexibility in deciding when to buy the house.
  • Easier transition back to renting if circumstances change.
  • Rent payments may not count as taxable income, offering potential tax savings.

Disadvantages of Rent to Own:

  • Rent may increase if interest rates rise before you purchase.
  • Potential issues with property maintenance and limited say in repairs.
  • The risk of losing the option fee if you change your mind.

5. Rent to Own Houses in Nairobi

If you’re looking for rent to own properties in Nairobi, there are plenty of options available. You can find homes that are rent to own through real estate agents or online listings.

In Nairobi, most people prefer the traditional way of buying houses. In case you want to take this route, here is how to find houses with such an agreement:

  1. Companies that advertise rent to own homes.
  2. The landlord wants to sell their property.
  3. If you approach the landlord and propose the idea.
  4. Companies such as Rama Homes and Superior Homes have these houses readily available.

6. The Rent to Own Agreement

All the terms and conditions of the rent to own agreement should be put in writing when you get into a rent to own agreement. This document will serve as a reference for both parties throughout the duration of the rent to own agreement.

The following are some items that should be considered before signing a rent to own agreement:

  1. The amount of rent that is due each month.
  2. Amount of downpayment.
  3. The length of time period for rent payments before becoming eligible to purchase the property.
  4. The interest rate on the purchase price and when it is payable.
  5. Who pays homeowner’s insurance, property taxes, and other related costs.
  6. Any special clauses or conditions that need to be met in order for you to become the owner.


Before you commit to this type of investment, doing due diligence and researching the landlord/seller puts you in a better space and well-armed with the right information to make an informed decision. Find out how long they’ve owned the property and if the title deeds are readily available.

All in all, rent to own can be a great option for those who want to buy a home but don’t have the funds for a down payment. It offers flexibility and allows you to take your time before making a final decision. However, it’s important to weigh the pros and cons carefully before deciding if rent to own is right for you. If you found this article helpful, share it with a friend.

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