Buying a house or building one is not the only way you can make a real estate investment. The market has lots of opportunities. Real Estate business is a big business tree with multiple branches of interest. Surprisingly, unlike popular notion, Real Estate is a business for everyone and for anyone, depending on your line of interest. Here are some of them you should consider depending on your social status, financial state and business interest.
1. Real Estate Investment Trusts (REITs):
This is one of the easiest ways to make real estate investments without actually acquiring a physical property. REITs are regulated by the Securities and Exchange Commission (SEC). They are a form of collective investment scheme, which pools funds from investors and use them to acquire income-generating real estate.
The portfolio of underlying assets is managed by a professional whose job is to maximize your returns. With REITs, you hold an indirect interest in real estate on a flow-through basis, which means that you hold the property as if it were a direct investment.
REITs are traded on the Nigerian Stock Exchange (NSE). To buy one, you have to go through your stock broker. It’s just like buying or selling shares.
REITs are a solid investment stock that can earn you regular income. The benefits include the following:
Requires no minimum investment.
Offers tax advantages.
It’s a highly liquid way to invest in real estate. You won’t need a realtor to cash out your investment.
REITs pay high yields in the form of dividends.
Provides you the opportunity to share in non-residential properties like malls, industries, and hotels.
2. Land flipping
Another great way to invest is to buy land and sell it at a higher price. It is particularly profitable when you buy in a rapidly developing area, in which case you can make up to 300% in profits within a few months, or years, as the case may be.
You can start small by buying just a plot. Or if you have enough capital, buy as much land as you can and keep selling all year round.
While acquiring lands, keep the following in mind:
Buy in areas that are rapidly developing if you want to sell within a couple of months. Some areas are faster than others.
Ensure you obtain all the documents for the land that show you are buying from the legitimate owner. The documents should include a Certificate of Occupancy or a Governor’s consent. Ensure that you don’t get mixed up in land issues. Acquire lands with the appropriate land titles.
Benefits
• Low or zero maintenance costs.
• Ease of sale
• High profits
3. Become a real estate agent
This is a good option if you don’t have the capital to make an investment. You can simply offer your services to property owners who are looking for a buyer.
Becoming an agent means you get a commission after you find a buyer for the property. The common rate is 10%. So let’s say you find a buyer for a 40 million naira property, you stand to get a commission of 4 million naira.
To become a successful agent, you need to possess good networking skills in order to locate buyers and sellers. Here are some of the roles you’d have to play:
List the property to the public through notices, banners, fliers, and so on. But things have become very easy in the 21st century, in which case, advertising on the internet is the easiest and cheapest method you can use.
Be readily available to answer any questions buyers may have.
Take buyers to see the property (property inspection) and negotiate prices on behalf of the seller.
Screen the buyers to make sure that they are qualified to buy the property.
Benefits.
Grow your network.
Great earning potential.
Little or no investment capital required
4. Open space leasing
In this scenario, you buy land in a good location. While you wait for the property value to rise, earn monthly fees by leasing the land to people for temporary use. For instance, you can lease it to a church, mechanics or car wash, or other businesses that can construct a makeshift structure that will be easily dismantled when you are ready to sell.
Benefits
• Extra monthly profits before actual land sale, etc.
5. Build or purchase rental properties.
Investing in rental properties is one way to keep earning for life. As a landlord, you receive monthly or yearly income after you build or buy properties and rent them out to tenants. You’d have to regularly maintain the building to keep it in good shape, so that you can attract new tenants or keep up with the competition from other landlords in the neighborhood.
You’d also have to find out the price other landlords in the area charge on rent so that you can fix a reasonable price. Over time, your property will appreciate in value, especially if you are in an area of high demand.
The biggest difference between investing in a rental property and other types of real estate investments is the time and effort it demands, especially if you accept bad tenants who damage your property or delay rent payments. If you are not in a good location or don’t invest in maintenance, you face the risk of not attracting any tenants at all.
Benefits including:
• Earning passive income for the rest of your life.
6. Franchising.
Franchising is a brilliant way to acquire and hold land in different fast growing locations. It however requires considerable capital.
It’s as simple as when you acquire land and use it to establish a business, such as a fast food restaurant. You then buy land in various other locations, build your structures and find franchisees who will manage the restaurants on your behalf.
It may seem that brands, such as Mr. Biggs, McDonalds, Chicken Republic, and many others that exist today are only involved in the fast food business. But real estate acquisition is a major part of it. These lands quickly appreciate in value over time.
• Run a sustainable business while acquiring high value real estate.
• Own land in several major locations across the country.
7. Property development.
Property development is the most popular one that readily comes to mind anytime Real Estate is mentioned, it requires a huge capital investment. It involves acquiring depreciated properties that you can renovate and rent or sell at a very high profit margin. As with any real estate investment, a good location is crucial if you want to make reasonable profits.
Before you go ahead to invest in property development, you have to make sure that the development costs will be far outweighed by the asking price of the property when the renovation is done. So if you spend like 2million naira in renovations, make sure you can sell the property for at least 3 or 4 million naira.
Listed bellow is one of the benefits:
• Earn a higher profit than when you buy and sell undeveloped land.
