What Type of Apartment Can You Build with Kshs.70M in Ongata Rongai?

Introduction

Ongata Rongai has steadily evolved into one of Kenya’s most dynamic satellite towns, attracting both homebuyers and investors. Located just a few kilometers south of Nairobi, the area has witnessed rapid urbanization driven by its proximity to the capital, improved infrastructure, and a growing middle-income population.

With increasing demand for rental housing—especially from students, professionals, and young families—apartments in Ongata Rongai are offering attractive returns. For investors looking to enter or expand in the Nairobi metropolitan real estate space, Ongata Rongai stands out as a smart bet.

This article explores what type of apartment development you can build with a budget of Kshs.70 million in Ongata Rongai. We’ll delve into unit configuration options, construction costs, rental income projections, and return on investment (ROI). Whether you’re looking to develop a gated apartment community in Ongata Rongai or a simple multi-unit rental, this guide is designed to equip you with actionable insights.

Overview of Ongata Rongai Real Estate Market

Ongata Rongai is no longer the sleepy suburb it once was. Today, it boasts a population of over 170,000 residents, served by a growing number of amenities including universities (like Multimedia University), hospitals, banks, and retail outlets.

The area is popular with a wide range of tenants:

Students from local colleges and universities
Young professionals working in Nairobi’s CBD, Upper Hill, or Westlands
Families seeking affordable accommodation close to the city

Accessibility has improved tremendously with the expansion of Magadi Road and proximity to the Southern Bypass. Additionally, frequent matatus, boda bodas, and proximity to Nairobi’s commuter rail system make commuting easy and affordable.

Rental income in Ongata Rongai has steadily grown due to rising demand, limited supply of quality rentals, and a population that values both affordability and proximity to Nairobi. With land prices ranging between Kshs.8M–15M per 1/8 acre, depending on proximity to the main road, investors can still secure strategic plots for development.

Apartment Development Options with a Kshs.70M Budget

With a development budget of Kshs.70 million, you can build a medium-density apartment block tailored for Ongata Rongai’s rental market. Let’s look at what’s possible with this budget.

Common Unit Types in Ongata Rongai:

Bedsitters – high demand among students and young workers
1-Bedroom units – popular with singles and couples
2-Bedroom units – suitable for small families and professionals

Recommended Configuration:

A realistic and market-driven apartment mix would be:

Unit Type	No. of Units	Average Size
Bedsitters	10	25 sqm
1-Bedroom	20	40 sqm
2-Bedroom	10	65 sqm
Total Units	40	–

Assuming a 4–5 storey walk-up building with ground-level parking and water storage, the total built-up area would be approximately 2,000–2,400 sqm.

Cost Breakdown:

Land purchase: Kshs.10M–15M (1/8 to 1/4 acre in prime location)
Construction cost: Kshs.25,000–30,000 per sqm (standard finishes)
- Total: ~Kshs.55M–60M
Professional fees, approvals & contingencies: ~Kshs.5M

This brings the total to Kshs.70M, making the development financially feasible.

Rental Income Projections in Ongata Rongai

Rental income in Ongata Rongai is strong, especially in gated apartment communities that offer good security, water availability, and proximity to roads and institutions.

Current Market Rents (2025):

Bedsitter: Kshs.8,000–10,000
1-Bedroom: Kshs.13,000–15,000
2-Bedroom: Kshs.18,000–22,000

Monthly Rental Income Breakdown:

Unit Type	Units	Rent/Unit (Kshs.)	Monthly Total (Kshs.)
Bedsitter	10	9,000	90,000
1-Bedroom	20	14,000	280,000
2-Bedroom	10	20,000	200,000
Total	40	–	570,000

Annual Rental Income:

Gross Annual Income: Kshs.570,000 x 12 = Kshs.6.84M
Occupancy Rate Assumption: ~90%
Adjusted Gross Income: Kshs.6.156M

Return on Investment (ROI) Analysis

Understanding the ROI on apartments in Kenya is crucial for assessing financial viability. Let’s run the numbers based on the projected figures.

Income vs Expenses:

Gross Annual Income: Kshs.6.156M
Annual Operating Costs (management, taxes, repairs @15%): ~Kshs.923K
Net Annual Income: Kshs.5.233M

ROI Calculation:

Total Investment: Kshs.70M
ROI = (5.233M / 70M) x 100% = 7.47%

This 7.5% net ROI is competitive when compared to other real estate investment options in Kenya, and significantly better than traditional savings accounts or some government bonds.

Payback Period:

Kshs.70M ÷ Kshs.5.23M ≈ 13.4 years

Value Appreciation and Exit Strategy

Beyond rental income, the long-term value of Ongata Rongai property investment lies in capital gains.

Value Appreciation Drivers:

Ongoing infrastructure projects like the Greater Southern Bypass
Increased housing demand near Nairobi
Rising land values—estimated 8–12% annual growth in some pockets

Rent Escalation:

Average rent increment: 3–6% annually
Projected gross income in 5 years: Kshs.7.8M+
Passive income potential increases with time

Exit Strategy Options:

Sale of property at appreciated market value after 5–10 years
Airbnb conversion for higher nightly returns
Loan securitization using rental cash flow as collateral for expansion

Risks and Mitigation Strategies

Common Risks:

Vacancy risk due to over-supply or poor location
Construction delays or cost overruns
Regulatory risks (e.g., zoning disputes, NEMA compliance)

Mitigation Tactics:

Work with experienced contractors and architects
Conduct detailed feasibility and market studies
Hire a professional property manager to maximize occupancy and maintenance

Mitigating these risks early on can protect your 70 million apartment project in Kenya and ensure long-term success.

Conclusion and Call to Action

A budget of Kshs.70 million is sufficient to develop a 40-unit rental apartment in Ongata Rongai, consisting of bedsitters, one-bedroom, and two-bedroom units. With potential gross rental income exceeding Kshs.6.8 million annually and a net ROI of approximately 7.5%, this represents a strong opportunity in the current real estate market.

Apartments in Ongata Rongai are in high demand, and with proper planning, professional oversight, and strategic location selection, this project can generate long-term passive income, capital appreciation, and financial security.

For investors serious about Ongata Rongai property returns, now is the time to consult architects, contractors, and property managers to begin your real estate investment in Ongata Rongai. Start your journey toward building a thriving gated apartment community in one of Nairobi’s fastest-growing suburbs.

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