The Nairobi real estate market is booming, offering lucrative opportunities for investors in apartment rentals.
However, one major decision every investor must make is choosing between short-term rentals (Airbnb-style) and long-term leasing. Each model has its advantages, profitability potential, and risks.
In this guide, we’ll break down the profitability, risks, and suitability of both investment models to help you decide the best option for your Nairobi apartment investment.
1) Understanding the Two Rental Models.
What Are Short-Term Rentals?
Short-term rentals (STRs), often listed on platforms like Airbnb, Booking.com, and Vrbo, cater to tourists, business travelers, and short-stay tenants. These apartments are typically fully furnished and offer daily or weekly rates.
✔️ Target Market: Tourists, expatriates, business travelers, and digital nomads
✔️ Location Preference: High-demand areas like Kilimani, Westlands, Kileleshwa, and Upperhill
✔️ Furnishing: Fully furnished with premium amenities.
What Are Long-Term Leases?
Long-term leases involve renting an apartment for six months or more to tenants who plan to stay for an extended period. These rentals offer a stable income stream with less active management.
✔️ Target Market: Professionals, expatriates, families, and corporate tenants
✔️ Location Preference: Residential hubs like Lavington, Karen, Parklands, and Ngong Road
✔️ Furnishing: Can be furnished or unfurnished, depending on the target market.
2) Profitability Comparison: Short-Term vs. Long-Term Rentals.
Short-Term Rentals: Higher Revenue Potential.
Short-term rentals generally yield higher revenue per month compared to long-term leases.
Example of Short-Term Rental Income in Kilimani
- Daily Rate: Ksh 5,000 – Ksh 12,000
- Occupancy Rate: 60% – 80% (18–24 nights per month)
- Monthly Earnings: Ksh 90,000 – Ksh 288,000
- Annual Revenue: Ksh 1,080,000 – Ksh 3,456,000
💡 Potential ROI: Higher than long-term leases, but depends on occupancy rates and competition.
Long-Term Leases: Steady & Predictable Income
Long-term rentals generate consistent income but at a lower monthly rate.
Example of Long-Term Lease Income in Kilimani
- Monthly Rent: Ksh 80,000 – Ksh 200,000
- Annual Revenue: Ksh 960,000 – Ksh 2,400,000
💡 Potential ROI: Lower than short-term rentals but stable and less volatile.
3) Advantages & Benefits of Each Investment Model.
Short-Term Rentals: Advantages & Benefits
✅ Maximized Earnings – Capitalize on seasonal demand for higher rental income.
✅ Flexibility & Control – Owners can adjust pricing, availability, and guest selection.
✅ Market Adaptability – Short-term rentals cater to Nairobi’s growing tourism and business travel sector.
✅ Regular Maintenance & Upkeep – Frequent cleaning and guest turnover keep the property in top condition.
Short-Term Rentals: Advantages & Benefits
✅ Higher Income Potential – Dynamic pricing allows owners to charge premium rates during peak seasons.
✅ Reliable Cash Flow – Frequent bookings ensure a steady stream of rental income.
✅ Greater Flexibility – Owners can adjust rental terms, pricing, and availability as needed.
✅ Increased Profitability – Ability to maximize revenue through short stays, extra services, and premium amenities.
4) Which Model is best for You?
Best for High-Profit Potential: Short-Term Rentals
💡 Ideal for investors willing to actively manage their property or hire a property manager. Best suited for furnished apartments in high-tourism and business areas like Westlands and Kilimani.
Best for Stability & Passive Income: Long-Term Leases
💡 Ideal for investors looking for lower risk and minimal management effort. Best suited for residential locations like Lavington, Parklands, and Karen.
5) Final Verdict: The Hybrid Strategy.
Some investors combine both models to maximize earnings. For example:
✔️ Short-Term Rentals for Peak Seasons: Target high-demand periods like holidays, conferences, and events.
✔️ Long-Term Leasing for Low Seasons: Secure corporate tenants or expatriates for 6–12 months during slow periods.
This hybrid approach allows you to enjoy the benefits of both high profitability and stability.
Conclusion: Choose the Best Model for Your Investment Goals.
When choosing between short-term rentals vs. long-term leases in Nairobi, consider:
✔️ Profitability vs. Stability – Do you prefer high income with more work (STR) or steady passive income (long-term lease)?
✔️ Management Commitment – Do you have time to manage frequent guest turnovers, or do you prefer minimal involvement?
✔️ Risk Appetite – Are you comfortable with seasonal fluctuations, or do you prefer stable, predictable income?
✔️ Location & Property Type – Prime areas favor short-term rentals, while residential zones suit long-term leases.
💰 Ready to Invest in a Profitable Nairobi Apartment? Contact us today for expert advice and exclusive listings in high-demand areas like Jade Residence Kilimani and other prime locations!
