There were various replies, including the usual “pay 1,000 Naira to get 100,000 Naira.” It was quite appalling that only a few persons mentioned something related to real estate investments.
Thus, there are a lot of persons who know little or nothing about real estate investment in Nigeria. So, how does real estate investment works in Nigeria? When it comes to making investments, one aims to get profits that would make them worthwhile. Within the country, there are various profitable investment ideas but one fantastic area is real estate.
The real estate business is one of the thriving industries in Nigeria that has stood the test of time and has still emerged as a gold mine for several years. With 13% of the country’s population being homeless, and a few house owners, such investment is bound to thrive and bring great returns
However, the success of an investor depends on excellent information and knowledge of the sector they have at their disposal.
Let’s jump right in, I’ll be revealing more about real estate investment to help make the whole process less complicated.
What is Real Estate Investment?
Before I share what real estate investment is, let me explain some basic facts. Real estate is one of the fast-growing sectors within the country. The high need for residential apartments, commercial buildings, and offices, creates excellent investment opportunities in the sector. Real estate investment works as a financial strategy that usually involves the purchase, ownership, rental, and sale of various properties to generate income.
Sounds interesting, right?
Well, this tangible investment can be the right security for your wealth and provide you with outstanding returns. Its immunity to inflation and enhancement of value can get you to that financial freedom that you’ve always dreamt about. What does this mean for you? Well, you can start earning some money from this type of investment and worry less about the impacts of recession or inflation.
Ways of Investing in Real Estate
There are various ways you can invest in real estate in Nigeria but it would help if you also conduct some extensive research and make strategic plans before getting started. Then, choose from any of the areas below:
The Concept of Land Flipping
For most investors, this seems like one of the most convenient ways of getting their money into real estate to get profits quickly. The good news about this type of investment is that it requires quite a little effort but it deals with some level of smartness. If you are thinking of going through this path, you have to get your money ready and learn more about land ownership.
To get started, you should know that you would be buying lands and selling them without the need of building or developing them. Buying and selling a single plot of land may give you a substantial amount of profit but wait, let me tell you something, that money would be quite significant if there is improvement on the land. Such investment also offers you more knowledge and opportunities in the real estate sector. Soon, you can start buying acres of land and sell them at any time.
Investing in Rental Properties
Ever pictured yourself being a landlord? Well, this is a thriving aspect of real estate investment that is an old practice as land acquisition or ownership. All that is involved in this area of the business is the purchase of properties and renting them out to individuals who then become your tenants.
Before you start investing in properties, please take care in searching for the right property and choose from genuine sellers to avoid being defrauded. You would also need to devote some time to this type of investment, especially when dealing with maintenance to avoid losses. For the busy folks, you can employ a manager that have great skills in taking charge of the property.
As an investor, owning rental properties offers you a fixed income on either a monthly basis, yearly basis, or both. Kindly note that how you get your payments depends on your agreements with your tenants. Interestingly, you can start gaining more profit after a few years, as it is quite normal for properties to appreciate in terms of their value, after a while.
Thus, investing in property now would leave you with a more valuable asset in the next five years. However, you would be solely in charge of whatever maintenance is needed on the property but don’t freight, as the rents you collect from your tenants can easily cover those costs. And that’s just one side of the story, as in most cases,there is still enough left to serve as your profit after paying for the maintenance of your properties.
Investing in Property Development
This aspect of real estate investment may require that you invest a great amount of money, as it is capital intensive but it yields a great deal of profit. The basic thing you have to do is get your money ready and search for properties in the best location around the country and develop them into something more luxurious. By now, you should know that there are trustworthy and legal agents that can help execute this task.
Whether you have an interest in residential estates, commercial outlets, or other properties, you can develop them better and sell later at a higher profit margin. Kindly note that the location is an integral aspect of this area of the investment, as people tend to pay more on properties sited across excellent locations. So, let’s say you invest a hundred million naira, at the end of the development, you might be earning a multiple of that amount or even more.
If you are thinking of going into real estate investments in Nigeria, you should also consider learning more about Real Estate Investment Trusts. REITs work under the auspices of the SEC (Securities and Exchange Commission). When it comes to REITs, only a few individuals are knowledgeable about this, and investing in these trusts can help generate some great income.
They work as an excellent investment where investors combine their capital to acquire some real estate properties and offer mortgage loans. The management of the trust handles the existing portfolio and takes care of releasing the returns from the capital to the various individuals. Surely, you are getting your money with interest by an indirect real estate cash flow.
REITs work similarly to stocks, as you can buy them and also sell them to those who are willing to buy on major exchange platforms. One interesting benefit of REITs is liquidity, as it offers access to liquid assets that you can sell at fair rates to invest in other investment opportunities within the country. If you are keen on getting into some diversification with regards to real estate investment, this would be quite beneficial.
Real estate investment in Nigeria is a fantastic idea, and it is quite profitable if you deal with a good advantage of helpful information. Individuals are often in need of either a residential apartment or a business outlet, and as such, their needs keep the sector booming. How do real estate investments work in Nigeria? It involves various things, and a peek through this piece would reveal some major things you should know about real estate investments.