Letting a home in Kenya can be a steady source of income, and the owners who do it well treat it as a small business with clear obligations. This guide covers the tax you owe, your duties as an owner, the documents that protect you, how to vet tenants, and how to budget so the headline rent is not mistaken for profit. It is general information current to 2026. It is not legal or tax advice; confirm your position with your own advocate and tax adviser.
The one idea. Your real return is the rent you actually collect, less tax, service charge, vacancy, maintenance and management. Plan around that number, not the asking rent, and keep clean records from day one.
1. Register and pay your rental income tax
Residential landlords pay Monthly Rental Income tax (MRI): currently 7.5% of gross rent within the qualifying annual band, filed monthly through KRA. It is a final tax, which means you pay it on gross rent and do not deduct expenses against it.
- Get a KRA PIN and register for the rental income obligation.
- File and pay monthly, through KRA’s electronic rental system, even in months with no rent (a nil return).
- Keep records of rent received and tenant details; KRA actively enforces this.
- If your rental income is outside the MRI band, a different regime may apply; confirm with a tax adviser.
2. Know your duties under the Sectional Properties Act
If you own an apartment, the Sectional Properties Act 2020 governs how the building is run. When the sectional plan is registered, a management corporation forms automatically, and every owner is a member.
- The corporation maintains the common property (corridors, grounds, lifts, security) and sets the service charge.
- You pay service charge whether or not the unit is let, so budget for it.
- Understand how the corporation is run, what the charge covers, and whether increases are capped.
- Older units still on long-term company leases were required to convert to sectional titles; confirm your unit’s conversion status, as it affects sale, mortgage and transfer.
3. The documents that protect you
- A written tenancy agreement. Set out the rent, the term, the deposit, notice periods, who pays utilities and service charge, and the condition of the unit. A clear agreement prevents most disputes.
- A deposit, handled properly. Commonly one to two months’ rent, refundable at the end less genuine, evidenced damage. Record the unit’s condition at move-in with photos and an inventory.
- Receipts and records. Issue rent receipts and keep them; they support your KRA filing and any dispute.
Lower-rent residential tenancies can fall under rent-control rules, while others follow ordinary contract and landlord-tenant law. Your advocate can tell you which applies to your unit.
4. Vet your tenants
A good tenant is worth more than a high rent from a risky one.
- Take references from a previous landlord and an employer or business.
- Confirm identity and a regular income source.
- Agree expectations in writing, and do a joint move-in inspection.
- Treat tenants fairly and follow the lawful process for any rent dispute or notice; self-help eviction is unlawful.
5. Budget for the real yield
The asking rent is not your profit. Subtract:
- Rental income tax (Section 1),
- Service charge (Section 2),
- Vacancy between tenants,
- Maintenance and repairs, and
- Management, if you use an agent.
Work in these costs before you buy a unit to let, so your yield expectation is realistic. Factor financing too if you borrowed; see the financing guide.
6. Using a managing agent
If you do not want to self-manage, a registered property manager can handle letting, rent collection, maintenance and compliance for a fee, commonly a percentage of rent collected. Confirm the manager is reputable and that their fees and duties are clear in writing. Space Kenya is a content and intelligence platform, not a managing agent; we can route you to verified Realtors through the Network.
Quick checklist
- ☐ KRA PIN and rental income obligation registered
- ☐ MRI filed and paid monthly (nil return when empty)
- ☐ Service charge understood and budgeted
- ☐ Written tenancy agreement in place
- ☐ Deposit recorded with a move-in inventory
- ☐ Tenants referenced and identity confirmed
- ☐ Yield calculated after tax, service charge, vacancy and management
Where Space Kenya fits
Use the more guides, the renting guide for the tenant view, and the Network to find a verified Realtor. Your tax, legal and management decisions stay with your own advisers.
This guide is general information current to 2026. It is not legal or tax advice. Rates and rules change. Always confirm with your own advocate and tax adviser.