
Short-term rentals have grown in popularity across Kenya, particularly in cities like Nairobi, Mombasa, and coastal holiday destinations. With platforms like Airbnb and Vrbo enabling property owners to rent out their spaces to travelers, many investors are now considering this market as an alternative or supplement to long-term rentals. However, before jumping into short-term rental investing, it's crucial to weigh the advantages and challenges involved. Here’s an overview of the pros and cons.

### **Pros of Short-term Rental Investing in Kenya**

#### 1. **Higher Income Potential**

Compared to traditional long-term rentals, short-term rentals can generate more income. During high tourist seasons or special events, property owners can charge premium rates, especially in popular locations. Cities like Nairobi and coastal regions like Diani, Watamu, and Lamu are hotspots for tourists, making short-term rentals attractive.

#### 2. **Flexibility for Owners**

Short-term rentals give you the freedom to use your property whenever it’s not occupied. This flexibility is ideal for owners who want to spend some time in the property themselves or reserve it for family and friends.

#### 3. **Diversified Income Streams**

By leveraging multiple platforms (like Airbnb, Booking.com, and others), you can reduce the risks associated with relying on a single tenant. This diversification helps you reach different types of travelers, from international tourists to local business visitors.

#### 4. **Higher Occupancy Rates in Prime Locations**

In areas that are popular with tourists or business travelers, short-term rentals can have higher occupancy rates compared to long-term rentals. For example, areas near the Nairobi CBD, Westlands, or near safari attractions often see steady demand from travelers looking for temporary accommodations.

#### 5. **Tax Benefits**

In Kenya, short-term rental income can benefit from specific tax reliefs. For instance, the Finance Act 2020 introduced a minimum tax, which might result in lower tax liabilities for property owners compared to those with traditional rental agreements. Additionally, since short-term rentals are often categorized under hospitality, owners might be eligible for various deductions related to property maintenance.

### **Cons of Short-term Rental Investing in Kenya**

#### 1. **Inconsistent Income**

One of the biggest challenges with short-term rentals is income variability. While you may enjoy high earnings during peak tourist seasons, the low seasons can see significantly reduced bookings, especially in locations dependent on international travelers. In contrast, long-term rentals tend to provide stable, consistent income throughout the year.

#### 2. **Higher Operating Costs**

Managing a short-term rental property is much more labor-intensive and costly than managing a long-term rental. There are cleaning fees between guests, furnishing, marketing expenses, and utilities that must be considered. You may also need to hire property managers or caretakers, especially if you live far from the rental.

#### 3. **Legal and Regulatory Challenges**

The Kenyan real estate sector, including short-term rentals, is subject to evolving laws and regulations. Cities and towns may introduce restrictions on short-term rentals, and compliance with zoning laws, safety regulations, and tax filings can become complicated. Staying updated on these changes is crucial to avoid fines or legal issues.

#### 4. **Varying Market Demand**

The demand for short-term rentals can fluctuate due to economic factors, pandemics (like COVID-19), and changes in tourism trends. Additionally, increased competition from other short-term rentals can affect occupancy rates and pricing.

#### 5. **Security and Maintenance Issues**

Since guests are frequently coming and going, the risk of damage to your property is higher compared to long-term rentals. Additionally, you may encounter challenges with managing guest behavior, especially if the property is in a residential area. Installing security systems and conducting regular maintenance checks is essential to protect your investment.

### **Is Short-term Rental Investment Right for You?**

Short-term rental investing in Kenya can be highly lucrative, but it comes with its unique challenges. Before diving in, it's important to conduct thorough market research, especially in the areas you’re considering. Look at local demand, competition, and regulations to understand how they may impact your business.

If you are willing to invest time, energy, and resources into managing a short-term rental, it can offer excellent returns. However, for those seeking a more passive and consistent income stream, traditional long-term rentals might be a better fit.


Short-term rentals have grown in popularity across Kenya, particularly in cities like Nairobi, Mombasa, and coastal holiday destinations. With platforms like Airbnb and Vrbo enabling property owners to rent out their spaces to travelers, many investors are now considering this market as an alternative or supplement to long-term rentals.

Zurafa Properties Magazine

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