10 steps to successfully investing in real estate

10 Steps to Successfully investing in Real Estate Here In Nigeria

It is said that if something is costly but worthwhile, you will find a way to obtain it. And property, both in terms of land and buildings, is something that will pay off in the long run.

Below we have created 8 steps to successfully investing in real estate

Do you know that only 37 percent of Nigerians owned a home in 2011. This chasm can be filled by giving potential investors and the broader public meaningful and timely information. Additionally, by streamlining the procedure, it is necessary to lower the obstacles to investing in the area. While a result, keep these eight measures in mind as you invest your hard-earned money in the real estate market.

Contents

1. Research

If you are interested in the property market and successfully investing in real estate then there are great platforms to find information you need, including the mass media, online and around you. Talk to locals. Visit Google and relevant Nigerian property sites. Create Google alerts for search terms. This way, you will always be in the loop. You have to understand it before you can get into it. It is important to note that Real Estate information in Nigeria is scarce and thus requires effort on your part, whether you are in the country or abroad.

2. Decide on the specific property market

Depending on your goals, pick a sector that will benefit you more. It could be office, industrial property, retail centres or residential units. For instance, if you want speedy returns, investing in the residential market may not be for you. According to a developer in this BusinessDay article, a shopping mall in Nigeria is sold off before it is even complete while residential units take several years to actually sell out.

3. Identify booming real estate markets

They may not be booming now but owing to infrastructure development and ease of access to central business districts, that may be changing soon. Where a highway is constructed, it eases traffic and the working class tends to move in that direction, making it a worthy cause to build high-rises to rent out to them. This is vital to successfully investing in real estate.
What does this mean? If you have identified residential real estate as your interest, you need to target the middle class. Nearly half of the middle class in Nigeria (people earning an average monthly income of N80,000–N100,000) are purchasing goods or planning to do so to improve their lives as years go by. This indicates a significant consumer boom.

4. Decide on where and how you will get finances

Depending on where you are in life, the source of financing may vary. It could be from friends and family or financial institutions. You could also have the money yourself. When you approach the bank or institution, make sure you know what you are doing. Your plan has to be viable enough to make them give you the money. As stated here last time, the Nigerian government secured a $300 million loan from the World Bank to establish Nigerian Mortgage Refinance Company (NMRC) at the beginning of 2014. Hopefully its effect in terms of liquidity and bank lending is being felt now. You could benefit.
Remember that property in the better parts of Lagos and similar upscale urban areas is as expensive as in some Western markets.

5. Get the details right

Be careful not to enter into deals with untrustworthy people. Talk to industry experts, a lawyer and make sure you get everything ironed out right from the federal government requirements down to the owner’s issues. It is another known fact that property scammers run amok in our big cities; pretending to sell houses whose owners are away, complete with fake title deeds. Beware. Get the advice of relevant professionals such as surveyors who will check out the property and advise you accordingly.
When you get down to the construction, enlist the services of architects and service engineers. Do not do things hurriedly only to incur unnecessary costs. The Knight Frank head in Africa was quoted saying that a building in Nigeria that is about 5 years old will look like a building that is 15 years older in Europe.
If you are a foreign investor at corporate level, the best thing is normally to partner with locals like Actis.

6. Know the Law

You have the right to own property as a Nigerian. All the same, the 1978 Land Use Act gives state governments authority over land within their borders. They in turn avail it to you after an intricate and bureaucratic process. You will then receive a certificate of occupancy to actually use the land i.e. sell it or develop it. Your right can also be denied if you are living in a place that is not your area of origin, which can be very subjective at the very least and can create ethnic tension.

7. Look to the future

There may not be basic infrastructure where your property of interest is currently at, but if it is in the line of the ever expanding urban areas, you can never go wrong. A few years down the line, you may sell it at millions over and above what you buy it for. Do not be too short-sighted.

8. Online Marketing

You cannot afford to ignore the Internet in this day and age. Whether it is having a website or maintaining a social media presence, the Web is one of the affordable ways to get traffic to your venture once it hits the ground running. If you want to attract buyers or sellers, online marketing could be your way to achieve this.

Mistakes can be made in the real estate market in Nigeria as in anywhere else and that is why one needs to practice patience and wise resolve. Remember, Nigeria is a developing market with great potential in sight.

9. Be Honest

Real estate investors are usually not obligated to uphold any particular pledge of ethics. Despite the fact that it would be easy to take advantage of this position, the majority of successful real estate investors follow strict ethical guidelines. Because real estate investing entails dealing with people, an investor’s reputation is likely to be well-known. Effective real estate investors understand that being fair is preferable to seeing how much they can get away with.

10. Stay Educated

As with any business, it is imperative to stay up to date with the laws, regulations, terminology, and trends that form the basis of the real estate investor’s business. Investors who fall behind risk not only losing momentum in their businesses but also legal ramifications if laws are ignored or broken. To successfully investing in real estate you should stay educated and adapt to any regulatory changes or economic trends. Moreover, keep up on real estate, tax, and lending laws and regulations that could directly or indirectly impact your business.

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