I have resolved to invest my Sacco savings in buying a property by the last quarter of the year. However, I am torn between buying a complete house or purchasing a plot on which I can build a house as per my tailor-made specifications. Are there other known advantages of buying such vacant plots?

Ciru, Nairobi

It is advisable for first-time investors with a frugal budget to start off with buying a vacant plot since many ready-made houses are more costly.

Vacant plots are also ideal for seasoned investors in real estate who want to diversify their property portfolios by purchasing and constructing more commercial or residential units.

Buying a plot – especially in the outskirts of Nairobi – is more cost effective and gives you time to build later when ready with finances. It is also appealing as a plot owner can custom make their preferred architectural designs in line with the zoning and building code of the area.

Plots are also easier to maintain compared to a house as you will not need to bother on renovations, mowing the lawns and paying service charges before constructing.

Financially, payment of relevant property taxes is lower on vacant land compared to when buying a house.

The value of plots also appreciates with time especially when there are infrastructural developments, which increase demand for property in the area.

This mainly applies to land which is primarily bought in an ‘undesirable’ area which regenerates to a desirable area following nearby developments.

Some people also prefer buying plots following the belief that there is less competition which allows for time to negotiate for a better deal.

In developed countries, many people buy plots online from the comfort of their homes following advanced technologies.

Locally, we must still visit the plots physically complete with certified surveyors in tow to ensure that the plot exists.

Financial experts concur that land is a tangible asset unlike stocks and shares. Constant increase in demand and limited supply can guarantee a plot owner boosted profits. Investment in land is fairly a simple and transparent process compared to investment in shares and stocks.

On the flipside, buying of plots can also turn to be a nightmare – especially if you buy one in the wilderness whose value may not appreciate with time – you will later be stuck with the plot when you want to sell it.

Vacant plots also do not generate income immediately unless rented out for parking or leasing – more income can be generated once you sell of the plot when there is demand.

It is important to consider the availability of proper infrastructure when buying a plot to construct your dream hone on. It is better if the plot is connected to a nearby road and can easily be connected to public utilities such as water and electricity.

- Harold Ayodo is an Advocate of the High Court of Kenya