According to Reuters, “a successful real estate investment can earn returns as high as 30-35 percent, while rental income yields in cities such as Lagos and Abuja can easily reach 10 percent, developers and estate agents say.”
Doing business in Nigeria comes with tons and lots of opportunities, no doubt many still think that doing business in Nigeria, or even starting one from the scratch is as tough as a Carmel passing through the eye of a needle. Most will probably say that reasons for this is the unending and back breaking business policies in Nigeria which constantly serve as a huge turn off for people thinking of doing business in Nigeria. However while many go about with this mindset and orientation, many out there are doing cool business which in return is yielding for them great profits. So it depends on which side of the coin you staying.
Just as I said earlier on, there are plenty business opportunities as well as job opportunities in Nigeria, all you need is to get the right information, be prepared and leverage on your abilities and capabilities to make it work, I have written about decent remote jobs in Nigeria, how to search for jobs online in Nigeria, starting clothing sales online, highest paying jobs in Nigeria among many other articles which are a great pointer and help which can help you either secure a job in Nigeria or start your own business in Nigeria.
Among one of the numerous high paying jobs in Nigeria, a very lucrative one at that is the real estate business. A boom business in Nigeria which has been embraced by many in various part of the country
What Is Real Estate?
Real estate is property made up of land and the buildings on it, as well as the natural resources of the land including uncultivated flora and fauna, farmed crops and livestock, water, and any additional mineral deposits.
Understanding Real Estate
Real estate is a tangible asset and a type of real property. And this includes property examples include land, buildings and other improvements, plus the rights of use and enjoyment of that land and all its improvements. Renters and leaseholders may have rights to inhabit land or buildings that are considered a part of their estate, but these rights themselves are not, strictly speaking, considered real estate.
However you should note the difference between real estate and personal properties, Real property is not the same thing and should not to be taken for personal property. For clarification sake, Personal property includes intangible assets like investments, along with tangible assets such as furniture and fixtures like a dishwasher. Also, even renters may claim parts of a home as personal property, provided you bought and installed the property with the lessor’s permission.
Things you should know about Real Estate
- Real estate is real that is, tangible property made up of land as well as anything on it, including buildings, flora and fauna, and natural resources.
- Real estate has three basic categories: residential, commercial and industrial.
- When it comes to investing, residential real estate is less expensive and more feasible to individuals, while commercial real estate is more valuable and more stable.
- As an investment, real estate offers income and capital appreciation.
- You can invest in real estate directly buying land or property or indirectly through buying shares in publicly traded real estate investment trusts or mortgage-backed securities
Four Types of Real Estate
There are four types of real estate:
- Residential real estate- includes both new construction and resale homes. The most common category is single-family homes. There are also condominiums, co-ops, townhouses, duplexes, triple-deckers, quad lexes, high-value homes, multi-generational and vacation homes.
- Commercial real estate– includes shopping centers and strip malls, medical and educational buildings, hotels and offices. Apartment buildings are often considered commercial, even though they are used for residences. That’s because they are owned to produce income.
- Industrial real estate– includes manufacturing buildings and property, as well as warehouses. The buildings can be used for research, production, storage, and distribution of goods. Some buildings that distribute goods are considered commercial real estate. The classification is important because the zoning, construction, and sales are handled differently.
- Land includes– vacant land working farms, and ranches. The subcategories within vacant land include undeveloped, early development or reuse, subdivision and site assembly.
Why is Investing in Real Estate in Nigeria Important?
For many reasons, real estate in Nigeria is important for many great reasons, like in many part of the globe, real state is an ever growing in value investment which cannot be ignored or overlooked. The very few who recognizes the value that comes with real estate investment in Nigeria has tapped into the immense wealth and financial security that comes with it. No wonder many people once they get their hands on any amount of money which by size is large, one of the first thing they consider doing is real estate investment. No wonder why most of our celebrities and politicians are all into the real estate investment. This is because, unlike when you buy cars, clothes and other related properties, they depreciate; they lose value over time which is not the same with real estate investments. Instead of depreciating, their value constantly grows. A land gotten for One million Naira today gains in value and can be sold in double of what it was originally purchased without anyone raising an eyebrow.
Today, many people are very skeptical about venturing into real estate investment due to a number of factors. However, Expert Properties expressly states that “real estate has Some Nigerians know this and have since dipped their legs into this money-generating industry.
If there is any business in Nigeria that is truly lucrative and extremely profitable, it has to be Real Estate business in Nigeria. Most of the top billionaires in Nigeria are real estate investors. The business is a money spinner to the highest level. Real Estate is currently booming in Nigeria and people are making millions in it.
One thing very good about real estate business in Nigeria is that the investment opportunity is so diverse that there seem to be something for everyone. Anyone who wish to invest can invest whether he has thousands or billions of naira, you can even invest without a dime in your pocket.
Here are some of the areas you can invest and make your own money in real estate investment in Nigeria
- Land Flipping- Land flipping is a type of business which has to do with the buying of lands at a low price and selling them at higher prices to make huge profit. This type of business is very lucrative and profitable in areas that are fast growing or developing. This is because the state of the area makes it easier for you to purchase properties at a very low price. People into this kind of real estate business often make a big chunk of the original money they used in buying the land.
Why land flipping is an incredible form of reaping profits:
- Value Appreciation Of Land
The value of land compared to other forms of investments like cryptocurrency or stocks doesn’t fluctuate over time. Preferably, the value of land appreciates by day. In Lagos in particular, the value of land (depending on the location) can increase by up to 30% in one year. Certain areas like Lekki Phase 1 have seen a 500% value appreciation in the cost of land in just five years.
- Lower Maintenance Cost
Land unlike other forms of real-estate investments require minimal maintenance. With buildings, you’d need to renovate frequently to maintain the integrity of the property. With land, you can let it sit fallow for years without spending much in maintenance and it will still appreciate in value. Land flipping is the ideal business for people who have low start-up capital and still want to reap huge profits within a short time period.
- Ease Of Managing The Investment
While in other forms of real estate investment where you have to deal with the challenges that come with tenants, tax issues, and other issues associated with maintaining buildings which can both be energy sapping and money draining We all know the stress that property owners face when it comes to relationships with tenants, government, etc. One bad tenant could cause a landlord to incur unnecessary expenses or deal with delayed payments. Flipping lands cut off all these contingencies. Plus, it’s easier to sell lands.
To make huge profits in flipping lands, follow these tips:
Research thoroughly, pick out areas that are rapidly developing, have the potential for developing in future or already developed areas. Depending on the location and economic viability, certain areas mature faster than others. If you’re opportune to acquire land in a more developed area at a fair price, go for it. More developed areas are the easiest to flip in a couple of months and earn profits compared to developing areas. Developing areas may require a couple of years to fully appreciate.
Ensure that the seller is the rightful owner of the land and has complete land documents including a Certificate of Occupancy or a Governor’s Consent. Avoid lands with inconclusive land titles like Excision in Process or Gazettes. Since you’re reselling, you must avoid getting caught up in land title issues. Go for clear, genuine lands with the appropriate land titles.
If you’ve secured the perfect land at an ideal location, do some work on the land. Clear the land, create a path or road to the land. Get a surveyor to get the area marked and craft a brilliant description of the area; highlighting advantages to cajole a potential buyer to opt in.
If you cannot write professionally, employ the services of experts in the field and then, run adverts on the land, utilizing the numerous social media sites and other forms of advertisement.
Avoid getting attached to any property, so it’s easy to let go and sell to someone else. Always keep in mind that it is business, and you’re out to make a profit.
- Open Space Leasing
This works in a simple and unique way. Buy a property in a good location and lease it out for makeshift use. You can lease it to churches or business that wants to develop a makeshift outlet such as car wash and mechanics. They will be paying you monthly rantage while the property still appreciates for future sell. It is like borrowing money for someone and get paid double interest and still get your money back.
- Real Estate Agency
This one is the simplest and easiest of them all. It is not investment per say but service rendering. How it works? Go round and look for properties to let and for sale, advertise your service and help secure clients for the property owners, you will be paid percentage as commission base on the amount the property is sold or rented. You can start with little or no money and if you are smart enough, you will grow to become a giant realtor.
- Property Development
This is where the big guys in the industry are doing their stuffs. They acquire properties in nice locations, develop it into luxury apartments, commercial structures, etc and sell at a very high profit margin. If you spend N200 million to develop a property, be sure you are going to sell for N400million.
- House/Office Rent
Build a house and put it up for rent, get paid all year for a life time. That is exactly how this work but there is much more to that than I just stated, watch out for detailed articles on this soon.
Starting your Own Real Estate Business in Nigeria
- Have a good Business Plan- this does not only pertains to real estate business but also every other business that you intend starting. The success of a good venture depends on how well you plan for it. You must ensure that there is no stone left un-turn before starting a real estate business in Nigeria. Ensure that you have all the required and necessary information before starting it. Don’t start base on assumption as it will lead you nowhere. You need to strategically plan your business to be able to conquer the market. A business plan is important for any real estate investor.
- Build a brand- this is another factor that you must take as important as having a good plan is also important. Branding is all about creating a good perception of your business in the mind of people. What people think about your business is important, this is because from them comes your prospective clients. Your business credibility hinges on how well you brand your venture
- Register your business- you must understand the need for you to have your business legally registered if you truly want to ensure the growth and expansion of your business. People feel assured when doing business with a legally registered business. This you can do by registering with the CAC, Corporate Affairs Commission
- Union Registration- Every business enterprise has it own union, that is body or association which is responsible for safeguarding and protecting the interest of the members. Ensure that before you start operation as a real estate investor, do well to associate with this body, get to know the rules and regulations that binds the association, pay your dues, obey the rules and do your business.
- Raised the Required Capital to Start- if you do your business plan research well, then you will definitely know the minimum amount that you can use to starting a real estate building in Nigeria
- Get Started and Get Working- this is the last step in starting a real estate business in Nigeria. After you have done all that is required of you by the association and your business is fully registered, then you can start executing the plans you have on your business plan, this includes closing of deals, marketing, networking, client orientation, human resources etc.
Starting a real business in Nigeria is not just an ordinary business that you can start or jump into without having sufficient information about it, it is one that you must be intentional about, and you must prepare your mental mind to get ready to face the hassles and challenges that comes with the business in Nigeria. It has been established that the business when rightly done has the ability to turn your financial tide around for the better. You must bear it in mind that real estate business requires patience and might not instantly bring the desired results.