One of the most currently trending ways to achieve long-term wealth in Nigeria is through real estate. Real estate is such an exciting path that offers you the opportunity to build generational wealth such that your children and grandchildren will always be grateful for the gift of you in their lives for years to come. Not only does it give you the opportunity to accumulate assets but also the chance to earn passively.
However, despite the promising reward of being a real estate investor, the path to success in real estate is not without its obstacles, but you have nothing to worry about because this article has got you covered. Therefore, let’s delve deep into the things you should know, the mistakes to avoid, and what you should do as a soon-to-become real estate investor in Nigeria:
Steps to get into the Real Estate market
Understand the real estate market:
The real estate market in Nigeria varies, so there is a significant difference between the different states as well as the rural and urban areas. In states such as Port Harcourt, Lagos, and Abuja, there are unique selling prices, laws, and growth potential because of the fast-growing real estate capacity. Therefore, it is crucial to be aware of the property value, growth possibility, and demand of your targeted environment for your real estate investment.
Knowing which of the investment segments of real estate, such as commercial buildings, landed properties, or residential properties, you want to venture into is also important.
Lands, for instance, are mostly considered valuable assets, especially in fast-growing areas. In the case of rental properties, an area with consistent rental demand, such as a higher institution environment, can bring you more income per time. The number of students will definitely keep increasing per academic session.
Set Clear Financial goals:
Taking into consideration your real estate investment goals and budget, it is important to be aware that real estate can sometimes be capital-intensive. This is because all that there is to the cost is not just the purchase price, as there are other costs involved. Some of these costs are maintenance, legal, taxes, and agency fees.
However, aside from using your savings to fund your real estate investment, you could explore options like mortgages, bank loans, and partnerships. But don’t fail to operate with a calculated risk and as well bearing in mind the interests that might be attached to any option you decide to go for.
Conduct Due Diligence on Properties:
To avoid problems such as property sales fraudulence, ownership conflict, and legal complications, ensure that you carry out your due diligence before making any real estate investment decisions. The property you have in mind to buy must have valid paperwork, documentation, and titles. Which include the Deed of Assignment, Certificate of Occupancy, also known as C of O, and the Governor’s consent.
It is a good idea to have a lawyer who can help you make proper verifications of the documents presented to you and as well help you handle the negotiation.
You also need to ensure you stay away from or be mindful of the Omo- onile problem, which is very common in most parts of Nigeria. The “omo-oniles” are the local landowners who are capable of creating problems for new property owners by making unnecessary demands for fees. One way to avoid this problem is to work with experienced real estate companies or agencies who are aware of the possible occurrence of this problem. And also have a track record of solving the problem.
Work with Reputable Real Estate Agents and Companies:
Working with credible real estate agents and companies must be considered because they help you find the right properties with minimal or zero risks. They make it possible for you to have a stress-free transaction process. You could select the real estate agents to work with based on recommendations from the people you trust who have also worked with the real estate companies in question. You could also check what people are saying about the company online.
Another thing to also know is about the agent’s fees, which are usually between 5% and 10% of the value of the property. However, it is important to have conversations around the fee before the property negotiation is sealed and also ensure it is documented for future reference. In case you plan to go through the route of making direct purchases from the property sellers without a middleman, make sure you still pass the process through a credible lawyer or agent. You could lose your money if you don’t consult a lawyer or agent in your investment decision. Regardless of how having middlemen in your real estate investment could attract some costs, it, however, guarantees your investment security.
Be Cautious with Cheap Deals:
Sometimes, the fact that things are not overly expensive doesn’t mean they are not legit or are of great value. There have been cases in Nigeria where some real estate investors have fallen into traps with fake agents who attract buyers by advertising cheap properties only to defraud the buyers. However, going for cheap real estate deals might not always be bad or fake, maybe due to the location of the property or some issues surrounding the property such as flooding, legal issues, or incomplete documentation. But do well to verify the credentials of the agent who has advertised the property before making a purchase decision.
You don’t have to break the Bank:
The real estate world in Nigeria keeps advancing such that you don’t have to wait till you have a lot of thousands or millions to become a real estate investor. Credible financial institutions such as Piggy Vest and Cuddle Realty enable you to own a property per unit/share for less than 10,000 naira by giving you a particular percentage of interest on your purchased share or unit, at a stipulated period or duration, depending on the company’s policy.
In conclusion, beginning your profitable real estate investments in Nigeria is not only a thrilling opportunity to build sustainable wealth but also requires you to take proper planning, diligence, and prudence into consideration. You are sure to attain success in the real estate investment world if you budget accurately, understand the real estate market, work with credible real estate agents, and also ensure you avoid common mistakes. With patience, continual real estate market education, and good decision-making habits, you will be securing sustainable wealth and financial means for yourself and your generations in Nigeria.
