In 2024, the real estate sector will continue to stand as one of the most profitable businesses in Uganda, since the country is still facing a serious housing deficit of 2.1 million.

Thus, the revenue returns that property owners get annually have encouraged pensioners like John Bukenya to venture into the rental business.

In recent years, the boom in the real estate sector has not only attracted individuals like Bukenya but also big organisations like Stanbic Properties Limited and the National Social Security Funds (NSSF). Peter Sewaggude, the manager of business development at Stanbic Properties Limited, explains that Uganda currently has a high demand for office and residential units.

Some of the factors influencing the boom, according to Sewaggude, include population growth. “Like any other economy, there is a sense of growth in terms of the demographics. People are demanding properties for office and residential use. So, that obviously creates a sense of demand for investors in the sector,” he states. 

Rental houses under construction in Rubaga

Before you build rentals, consider the following:

• Irrespective of the high demand, experts are cautioning against randomly building rental units without checking the drainage system.
• Also, prospective investors should consult experts concerning the type of soil on which these buildings are going to be set up. “Most parts of Kampala are wetlands. So, make sure the builders apply concrete stones to the foundation of the structure. Concrete is good because stones do not melt or allow water to penetrate through the walls, causing the paint to peel off of the walls. Do not put bricks in the foundation,” Muhammed Nsereko, a construction expert, says. As far as the type of soil is concerned, architect Abdu Wahab Nyanzi says that while some soils are loose, others contain groundwater. This can lead to buildings collapsing.
• When walls begin to peel off, it makes new rental housing units appear like old structures, hence repelling tenants. “And such houses are always cold. Tenants who occupy them stay for short periods and leave,” he adds.
• Avoid tiny rooms: “Whoever is constructing rental houses must know that those with small rooms have long lost market. Ugandans, especially those with big families, prefer big living spaces,” Badru Kateregga, a house broker operating in Kireka, Namugongo, and Mbuya, says.
• Toilets and bathrooms must be: According to Kateregga, these types of units are in high demand compared to those whose facilities are outside. “Such units with facilities inside in areas like Namugongo fetch between sh500,000 and sh700,000 per month. The demand for such housing units is commonly high among the corporate working class,” Katereggga explains

• Tenants want their own water and Yaka metres: As far as Yaka is concerned, a developer can get a Yaka metre installed on their structure after paying sh470,000.
• Renovate the property periodically. The easiest way to attract new tenants and increase rental fees for the old ones is by renovating the buildings. One can remodel or repaint the structures. Landlords in areas where one seeks to renovate must get permission from authorities. In Kampala City, a developer has to get a permit from KCCA and pay the required fees that allow him or her to renovate. When painting the houses, property owners are advised to hire professional painters who will match the colours well and not make them dull.