In response to the depreciation of the Kenyan Shilling against major currencies, particularly the United States Dollar, a growing number of Nairobi landlords are now stipulating rent payments in dollars to shield themselves from potential losses.

The media recently engaged real estate agents in Nairobi to delve into this emerging trend in rent collection.

Properties situated in upscale neighborhoods such as Westlands, Karen, Gigiri, Runda, Kileleshwa, and Muthaiga are witnessing an increasing number of landlords insisting on rent payments in dollars due to the Shilling's ongoing volatility.

Shunguli Duncan, a representative from Rock Field Properties, disclosed to the media that the surge in landlords demanding dollar payments has been substantial in recent times. He explained, "Some of the owners are not local; they are expatriates. They prefer dollars because of the instability of the Kenyan Shilling."

Shunguli emphasized that many foreign property owners had utilized financing facilities abroad to secure loans for building houses. As these loans were often denominated in dollars, landlords prefer to receive rent payments in the American currency, providing a safeguard against potential loan default.

Leading one of Nairobi's top real estate companies, Shunguli clarified that this practice protects landlords from fluctuations in the exchange rate. For instance, if an owner pays USD1,000 monthly to service a loan, listing the house for a similar amount in dollars ensures repayment certainty. Charging the equivalent in Kenyan Shillings introduces the risk of currency depreciation, potentially leading to loan default.

An anonymous real estate agent revealed that many Kenyan landlords are capitalizing on the depreciating Shilling, noting significant increases in rental income due to favorable exchange rates.

Shunguli cautioned against local tenants attempting to charge rent in dollars, emphasizing that not only is it illegal, but it also poses potential financial risks. "First, they have to set up a Dollar account. One thing they do not understand is that to convert back that money into Ksh, you will get way less," he explained.

He further highlighted that those benefiting from charging rent in dollars are typically individuals involved in the export and import business, as they can leverage their dollar accounts when importing goods from overseas.