Buying a Commercial Property – Dos and Don’ts

Thinking of buying a commercial property? This guide spells out the rules


Commercial property investment can be one of the most lucrative investments in real estate. The benefits include long secure leases and often attractive lease provisions. But even if you are an experienced property investor, it is crucial to understand that buying a commercial property is not the same as buying a residential home in Nairobi, Kenya.


Hence, it is important to understand the basics to ensure a good return on your investment. Here are some dos and don’ts for potential commercial property investors.


Do have a plan

Before investing in commercial property, you must have a proper investment plan that will enable you to identify the right property when it comes along. Many commercial investors make the mistake of buying a property because it seems like a good deal and then attempt to make it fit into their plan.


Don’t think that you can make money quickly

Many first-time investors go into commercial real estate only to discover that the tenant has gone into liquidation. This could happen within months of the contract settling. You should therefore learn to navigate this and other challenges associated with commercial investment.  Remember, commercial real estate is only as good as the lease and tenant in place.


Do know your property and know the market inside and out

There’s nothing wrong with being cautious when buying a commercial property. Some new investors buy these properties without doing enough research. It is paramount to have a good insight when it comes to the property’s history. So, do your due diligence.


Top commercial property for sale in Nairobi


Don’t overpay

Ensure you are paying the right amount for the commercial property. You need to know where the value point is and ensure that you are fully aware of the comparable prices for a similar property.


Do adjust your mindset
The primary drive of buying houses is having a location-specific mindset, but that’s not the case with commercial properties.  Key factors to consider when purchasing a commercial property include the type of asset class, the strength of the tenant profile, and the lease term in place.


Don’t rely on just any agent
You have worked hard for your money. Make sure you are buying from the best in the property business. Research and settle for renowned experts.


Do familiarise yourself with basic commercial lease terms

Having a fundamental understanding of landlord and tenant obligations, rent reviews, and outgoings provisions are important. This is because the lease document often forms the basis of the investment’s underlying value.



If you are thinking about buying a commercial property, you can no doubt glean from the above dos and don’ts.  The rewards for buying a commercial property can be huge, you just need to know your numbers.


Always consult with property agents that have expertise in both real estate and commercial properties to guide you.

2 Responses

  1. In my opinion, most people who are planning to purchase a commercial property must apply for a mortgage first. Aside from this, you made a pretty good point that it will be wiser to do some research first. I also agree with you that it will be best to compare prices too.

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