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

Irrespective of the high demand, experts are cautioning against randomly building rental houses without carrying out ample market research. Also, prospective investors should consult experts concerning the type of soils on which these buildings are going to be set up.

“Most parts of Kampala are in wetlands. So, make sure the builders apply concrete stones in the foundation of the structure. Concrete is good because stones do not melt, nor allow water to penetrate through the walls, to cause peeling off of painted walls.

Do not put bricks in the foundation,” Muhammed Nsereko, a construction expert says. When walls begin to peel off of painted walls, it makes new rental housing units appear like old structures, hence repelling tenants. “And such houses are dump and cold. Tenants who occupy them stay for short periods of time and leave,” he adds.

Avoid tiny rooms, toilets and bathrooms must be inside

“Whoever is constructing rental houses must know that Ugandans are looking for beauty, space and functionality,” Badru Kateregga, a rental broker operating in Kireka, Namugongo and Mbuya says. And also, units with toilets, bathrooms and kitchens inside, Kateregga says, are on high demand, compared to those without.

“Such units in areas like Namugongo go for between sh500,000 and sh700,000, per month,” he says.

Choose appropriate furniture

Tenants want to own their water, Yaka meters

Many tenants want peace with paying utility bills. “I have peace with my tenants, these days, after installing Yaka meters in each rental unit. At first, we were sharing one meter with the tenants.

Whenever, I would ask for money to pay for Yaka, they thought I was cheating them and not loading enough units. All that is history now. Each tenants takes care of their power bills,” David Muwanga, a landlord in Kabowa, Rubaga division says.   

Renovate the property  

The easiest way to attract new tenants and increase rental fees for the old ones, is by renovating the buildings. Renovations can be in form of remodeling or repainting the structures. In some areas, for one to renovate, they must get permission from the authorities.

In Kampala city, a developer has to get a permit from KCCA and pay certain fees allowing him or her to renovate their property. When painting, it is advisable for the property owners to hire professional painters, who will match the colours well and not make the building appear dull. “Tenants look for quality units.

Rental houses with dull colours don’t attract them. So, it’s important for the property owners to hire professional painters; otherwise, tenants will shun the property,” notes David Kabanda, a painter.

Know your target tenant                                                   

Any developer or investor in real estate who hopes to reap from their business, must have his or her own target groups they want to serve. For example, Nsereko says it is not advisable to construct big rental houses near universities, if the target tenants are the students. “Students want to rent small units (single rooms) costing between sh200,000 and sh250,000. If you charge above that range, you will not get tenants for your rentals,” Nsereko says.