Are rents in Nairobi overpriced and how you can avoid overpaying?

Over the years, some of the complains I have received from tenants is that their units are too expensive for the quality they are getting. While I had ignored this issue earlier, in recent times, it seems that the issue is becoming a growing concern. In developed countries where systems work, there is often a Fair housing act or some laws set to protect renters from this exploitation. However, in Kenya, consumer protection is not that active and that is why I have prepared this guide for you. As someone who has a ton of experience in urban housing, there are a few ways to catch an overpriced unit and avoid getting exploited.

How House rents are set in Nairobi

One thing you need to understand before you are able to confidently tell if a house is overpriced or not is how rent prices are set. While there is no agreeable standard, rents in Nairobi will often be derived from the following factors;

1. Quality of finishes

One defining factor for rents is the quality of finishes in a unit. This means the type of fittings the landlord used and how they compare to other finishes. In any rental market, there are normally 3 classes of finishes you can get;

Basic finishes
Standard finishes
High-end finishes

As the quality of the finishes being offered increases, so does the rent. This makes a lot of sense because high-end finishes come at a higher cost to the landlord and for them to recover this, they must charge you more. As a tenant, knowing the type of finishes used on the property will help you avoid paying extra for quality that doesn’t match the price

2. Proximity to amenities

This is perhaps the most used pricing factor in Nairobi. If the rental unit is located near a road, a mall or any other attractive service, then the rent goes up. In real estate, we call this proximity premium. It is the extra price you pay to be near functional amenities. While it does make sense to set rents in this manner, the truth is that it might not make that much sense to you once you rent the unit.

For instance, if you work remotely and don’t travel for work, renting near the road where rents are higher because of this proximity may not make a lot of sense. Additionally, being next to an amenity like a mall may not be as exciting as you think. I have a friend who was paying way too much rent just because he was near TRM, after talking with him, he acknowledged that while he factored the Malls proximity while choosing the house, it really isn’t doing that much for him.

3. Additional Services

Additional services in a unit also affect the amount paid as rent. This could either be woven into your rent or be split as a service charge. If an apartment has an elevator, swimming, gym or children’s play area, then you expect rents to be significantly higher than apartments without the same. This is because it costs a lot to run and maintain such services. Plus, they improve the quality of life while you stay at the unit, so it makes a lot of sense to pay extra for them.

4. Demand in the area

The rental market is like another market where the laws of supply and demand apply. If for some reason units in an area are on high demand – we see this a lot with units near Nairobi CBD – then rents will be high regardless of the quality or even size of the house. Areas with high demand often have low vacancy rates. And this means that the few units that are available end up being competed for highly. When landlords notice this, they push rents higher and as long as there is someone willing to pay, they have no problem.

5. The Area's Reputation

The reputation of a place albeit what we call location premium is a factor that significantly affects rents. You might tour two similar units in say Kasarani and Ruaka, but you notice the unit in Ruaka rents for significantly higher. This is because of the reputation of the area, that is why places like Karen and Runda are expensive. While the repute of an area might carry some advantages like good security, roads and social status, the impact on quality of houses might not be that significant to justify the price tag.

How to know if a house is overcharged

Now that you know how rents are set, let us jump straight into how you can pin point an overcharged unit. This will help you in paying for exactly what you receive and you are less likely to fall in the hands of greedy developers.

1. The 30% Rule of rent

Firstly, affordability depends on your income. What is affordable to a person earning KES 200,000/Month might not be affordable to someone making KES 50,000/Month. Because of this, we have what is called the 30% rule of rent. It states that rent should not be more than 30% of your monthly take home. An example;

If you take home KES 100,000;

Then your rent should be = 30% x 100,000;

= KES 30,000 maximum

Sometimes, units are not overcharged, you might just be fishing in the wrong pond. If you gauge rents in an area and find them quite high than what you can afford, moving to a place you can keep up with might be the best decision.

2. Compare to similar Houses in the same area

Another way to know if a unit is overpriced is comparing it to similar houses in the same area. Your comparison should focus on finishes, services you are getting and the size of the house. I have told you that there are 3-types of finishes, let me break-down what each class looks like so that you know what you are paying for.

Type of Finishes	Characteristics
Basic Finishes	Flooring — Plain ceramic tiles, cement screed with red-oxide finish. Walls — Plain plaster and paint, minimal decorative works. Ceilings — Simple board ceilings or exposed slab finish. Kitchen — Basic countertops, simple MDF or wooden cabinets. Bathrooms — Standard toilets and sinks, low-cost sanitary ware. Fittings — Sinks, cabinets, taps, locks, and accessories from low-cost or lesser-known brands. Lighting — Standard bulb holders or basic fixtures.
Standard Finishes	Flooring — Quality ceramic or porcelain tiles. Walls — Smooth plaster with quality paint finishes, occasional wall textures or décor features. Ceilings — Gypsum ceilings with simple bulkheads or recessed lighting. Kitchen — Granite or improved countertops, fitted MDF cabinets with better finishes. Bathrooms — Better-quality sanitary ware, tiled bathroom walls, glass shower partitions in some units. Fittings — Branded taps, sinks, locks, and accessories of moderate quality. Windows & Doors — Larger doors and windows of good quality. Lighting — Modern light fixtures and improved electrical fittings.
High-End Finishes	Flooring — Hardwood floors, polished porcelain or marble tiles, premium finishes throughout the unit. Walls — High-quality paint, wallpaper, decorative panels, or textured wall finishes. Ceilings — Designer gypsum ceilings with concealed and ambient lighting systems. Kitchen — Quartz, granite, or marble countertops with custom cabinetry and premium appliances. Bathrooms — Luxury sanitary ware, frameless glass showers, bathtubs, vanity counters, premium bathroom accessories. Fittings — Imported or premium-brand taps, sinks, handles, locks, and smart fittings. Windows & Doors — Large aluminum or UPVC windows, hardwood or designer security doors. Lighting — Designer chandeliers, spotlights, smart lighting, and decorative fixtures.

If you notice that a unit has basic finishes but is commanding rents equal to a high end area, then you are being overcharged. While house-hunting note units that are similar in a certain way and see how they compare in rents. If two units are comparable yet there is a rent gap of over KES 10,000 and you can’t see what extra you are paying for, then one is overpriced.

3. Inspect the condition of the property

The condition of the property will affect the quality of life you experience there while renting. If a property comes with a very high rent tag but is poorly maintained with outdated finishes, then it is overpriced. You want to make sure that you are renting a unit that is in good shape and where everything is functioning. This will also protect your security deposit as few items are likely to break while you are there.

4. Consider the demand in the area

If you ever walk through an area and notice that there are few “TO RENT” signs around, just know that the demand for units is high. In such a place, finding an ideal unit that agrees with your taste and budget might not be easy. And this might by default inflate the rents in that area. If you notice rents are high because of too much demand, chances are that rents don’t really reflect the quality of houses but are pegged on landlords having an upper-hand.

5. Check on the size of the house

The size of the unit is the biggest giveaway to know if you are overpaying or not. Some units in Nairobi are too small for the rental price they are set to. If you feel that the place is small for that price, then chances are you are right. Compare also the size of various rooms in the house like the kitchen, bedroom and showers. In my experience, having either one of them being too small can negatively impact your living experience. You are better off getting another unit that is sizeable.