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Comprehending Real Estate Investment In Nigeria

real estate in Nigeria

As far as the Nigerian economy is concerned, rapid growth has led to the high demand for real estate in Nigeria. Amidst the Covid-19 pandemic which started a few years ago, the cost of building materials has totally skyrocketed owing to the devaluation of the naira, Nigerian currency. This led to increasing in the price of building materials because the majority of the raw materials used in buildings are imported from foreign countries. As a  result of this devaluation, an average Nigerian finds it difficult to acquire properties.

As a result of people trying to shield themselves from the Virus, the sales and development of commercial real estate have been grossly affected because several businesses have evolved into digitalization. Also, the demand for residential real estate has been a little tricky because more people would rather work from home instead so they cannot afford to buy properties so they would rather rent. As the prices of cost materials increase, so also is the price of real estate.

As an investor, a way forward to invest in the market is through the residential and industrial sub-sector. This is because there will always be the need for shelter and a lot of businesses will need warehouses to store their product.

Having undressed into details the Nigerian real estate market, let us take a look at how the real estate investment works.

Check: Affordable property for sale in Magodo phase 1

How Real Estate Investment Works In Nigeria

Before we look into that, let us tell you a bit about what real estate investment is all about. A real estate investment is a financial strategy that involves owning, managing, maintaining, purchase, and sale of property for the purpose of making a profit. However, the cost of owning and maintaining a property must not be above its increased value. Different strategies for investing in real estate can be for the long term or short term. It all depends on a goal you intend to reach as an investor. Investing for the long term entails buying a property for rent or lease over a long period of time, thereby gaining rent and value for your property. Short-term investment on the other hand entails buying a property and flipping it quickly to make a profit.

Do the Following Before You Invest In Real Estate In Nigeria 

Information as they say is key. If you are looking forward to investing in real estate, consider the following;

  1. Carry out your research: As they always say, Google is your friend. There are several platforms you can use to carry out your research. Google is one of the easiest one.
  2. Choose a specific property market: If you are an investor willing toget fast returns in a short time, shortlet homes, office rentals are what you should consider.Always have a goal.
  3. Location: This is very important when investing in real estate. Quite unfortunate that a lot of investors overlook this. A good location guarantees a high return on investment within a short period of time.  Although there may not be basic infrastructure where your property of interest is currently located, if it is in the path of the ever-expanding urban areas, you cannot go wrong. Several years down the road, you may sell it for millions over and above what you purchased it for. Make sure you don’t lose sight of the big picture.  Places like Epe and Ibeju Lekki are good locations for investment.
  4. Decide on where to raise funds:  This matters a lot because you won’t want to embark on a project when you do not have enough funds to complete it. Determine whether you will source funds from the family, friends or financial institutions.
  5. Consult an expert: Many investors think it is easy for them to invest in real estate without having a real estate consultant or realtor.  The benefit of these expert is to guide you through the whole process, they help you negotiate with the owner or developer, they make sure all your documents a well signed. Hiring a professional property lawyer is not bad as well. Honestly, you can’t do it alone. 
  6. Understand the law: The 1978 Land Use Act gives state governments control over land within their borders. They then make it available to you after an elaborate and bureaucratic process. Also, owning a property is one of the rights of a Nigerian. 

In conclusion: Owning multiple real estate investments in certain locations in Nigeria where property appreciates fast guarantees financial security.

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