How to Structure a Payment Plan for Off Plan Apartments
Introduction
Buying property off-plan—before it is fully built—has become increasingly popular in Kenya. One of the biggest advantages is flexible payment options. Instead of paying the full purchase price upfront, buyers can spread payments over time. This guide explains how to structure an off plan payment plan in Kenya, the different installment models, and how to plan cash flow when buying apartments under construction.
Why Off Plan Apartments Use Payment Plans
- Flexibility: Buyers can manage payments over months or years.
- Affordability: Lower initial deposits compared to ready units.
- Developer Funding: Payment installments help developers finance construction.
- Capital Growth: Buyers lock in prices early before property appreciates.
Common Payment Plan Structures in Kenya
1. Deposit + Balance on Completion
- Buyer pays 10–30% deposit at signing.
- Remaining balance is paid once construction is complete.
- Best for buyers who want time to arrange financing.
2. Construction-Linked Installments
- Payments tied to project milestones (foundation, superstructure, finishing).
- Example: 20% deposit, then 20% at each stage until completion.
- Encourages accountability from developers.
3. Equal Monthly Installments
- Buyer spreads payments into fixed monthly amounts.
- Works like a rent-to-own model during construction.
- Example: KES 150,000–300,000 per month until completion.
4. Hybrid Plans
- Combination of deposit, stage payments, and a final balloon payment.
- Allows more customization for different buyer profiles.
How to Plan Your Cash Flow
- Assess Affordability: Ensure you can sustain installments without straining your budget.
- Emergency Buffer: Keep savings aside in case of income fluctuations.
- Negotiate Flexibility: Some developers adjust payment schedules if requested.
- Mortgage Integration: Arrange financing to cover the final lump sum.
- Track Milestones: Align your payments with verified construction progress.
See also: Mortgage Options in Kenya 2025 for financing guidance.
Risks to Watch Out For
- Project Delays: You may keep paying while waiting longer for completion.
- Overpromising Developers: Always confirm licenses and track record.
- Hidden Costs: Service charges, legal fees, and valuation fees may add up.
- Default Risk: Missing payments can lead to loss of unit or penalties.
Frequently Asked Questions
What is the typical deposit for off plan apartments in Kenya?
Usually 10–30% of the purchase price.
Can I use a mortgage for off plan apartments?
Yes, many banks allow mortgages once the project is near completion.
What happens if I miss an installment?
Developers may impose penalties or cancel your booking, depending on contract terms.
Are off plan apartments cheaper?
Yes, they often sell at lower prices compared to ready units, with room for appreciation.
Should I hire a lawyer for off plan purchases?
Absolutely. A lawyer ensures contracts protect your interests.
Final Thoughts
A well-structured installment plan for apartments in Kenya can make off plan buying affordable and secure. Always assess your financial capacity, understand contract terms, and work with reputable developers.
At Sarabi Realty Group, we guide buyers through safe off plan purchases, payment plan structuring, and due diligence.
📞 Call us: +254 112 703 835
📧 Email: sarabirealtygroup@gmail.com
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