It’s now becoming a common trend in select-affluent suburbs within Nairobi for landlords to ask for rent in dollars, this follows the weakening of the shilling which in turn leads to losses for properties servicing foreign loans.
Home owners in areas like Karen, Muthaiga, Runda, and parts of Westlands, are adopting rent-payment in dollar currency to avoid losses associated with the dwindling shilling.
A case study highlights a home owner servicing a foreign loan issued in dollars, should monthly rent be made in local currency, the landlord will end up losing money whenever the shilling weakens, thereby defaulting in loan repayments.
“It’s now a common trend in these affluent estates. Though some are using the mechanism to defraud tenants as rent will not be constant every month. However, it’s appropriate for non-local real estate business people who might have put up the properties using foreign loans. For local tenants it’s however illegal,” says a real estate agent.
