Investment itself comes with a lot of risks that can be jeopardized as a result of bad decisions and investing in real estate is not exempted but taking calculated risk helps you make better investment decisions. One thing that is riskier is not investing at all.
Below are 9 POINTERS that will help you make better decisions when it comes to Real Estate investments in Nigeria;
1. Understand the importance of due diligence so as to avoid real estate scams
Many have fallen victim to fraudulent real estate agents. It was late last year when a client of mine shared his terrific real estate experience with me. Unfortunately, the incident happened between him and his cousin. This cousin of his introduced him to a land up for sale in Sangotedo area of Lagos in 2010. The said land was four plots which were selling for four million Naira per plot. Being his cousin, he felt there was nothing to be afraid of. So he sent the sixteen million Naira to his cousin for the four plots of land without a physical site inspection because he was quite busy with work during that period. This client of mine just watched the videos of the land that his cousin sent to him and felt it was a good investment. To cut the story short, his cousin absconded with his money some months later. His line was not reachable, none of his relatives nor friends knew his whereabouts.
2. Find out what is expected of you to know before buying a property
Buying Land in Nigeria today can be a very hard decision to make. In this article, I will enlighten you on the necessary factors to consider that will make it easy for you to decide wisely.
As a Real Estate consultant here in Nigeria, based on previous experience, I have come to really understand that before buying Land, you need to do your due diligence before parting a dime of your money regardless of the person you are investing with.
3. Understand the importance of Zoning ordinance
I remember reading on Vanguard website about an incident that happened last year, 2018. It was in Osapa London in Lekki area of Lagos where The Lagos State Building Control Agency (LASBCA) demolished a nine-story building. What was the reason for that? The demolition happened because the structure was contravening the building plan regulations which permit a maximum of four floors. The building had no certified plan approval and the structural stability of the soil could not carry such a high-rise structure which could lead to the destruction of properties and loss of lives. So the Government would not let such damage happen. To cut the story short, Several notice was given to the owner and the developer to remove the structure at their own cost but they didn’t comply and once an illegal building has been demolished by the government, the owner would be given 90 days to pay the demolition cost, failure to do so means the government would seize the landed property.
4. Know your land titles and the necessary documents to look out for
In property law, a title is a bundle right in a piece of property in which a party owns either a legal interest or equitable interest. The rights in the bundle may be separated and held by different parties. It may also refer to a formal document, such as a deed, that serves as evidence of ownership. Conveyance of the document may be required in order to transfer ownership of the property to another person. Title is distinct from possession, a right that often accompanies ownership but is not necessarily sufficient to prove it. In many cases, both possession and title may be transferred independently of each other. For real property, land registration and recording provide notice of ownership information.
5. Discover viable locations to put your money in
Ibeju-Lekki is a local government area of Lekki, Lagos which is about a 30-45 minutes drive from Ajah. It is popularly referred to as the “New Lagos” due to the ongoing projects that are situated there.
6. Understand the returns that come with off-plan properties and the risk associated with it
Off-plan property is a property that is yet to be built or a property that is still undergoing construction. Many are always sceptical about keying into such investment but only good investors with great foresight understand the benefits of buying off-plan properties. Once you have done your due diligence on the track record of the Real Estate developers that you are buying from and you can verify the quality of their work as well as their ability to deliver as at when due, then you can be assured of getting.
7. Understand the shocking secret of beachfront properties
At times I just sit and admire the beautiful beach resorts we have in Nigeria most especially in Lagos to be precise. Experiencing this beauty of nature gives a memorable feeling. These beach resorts serve as tourist attractions to both citizens and foreigners. It’s a location for a weekend getaway or vacation for families, friends, couples, and even retreats for corporate organizations. On the financial aspect, owning a beach resort as well as owning a business around a beach resort is a good investment with high returns and demand.
8. Find out what no one will tell you about commercial real estate
There are different ways you can benefit from investing in real estate one of which is commercial real estate investment. Commercial real estate is a property that is mainly used for business-related purposes which are mostly leased to tenants to conduct income-generating activities. One key factor to consider before engaging in commercial real estate investment is LOCATION depending on the type of commercial activities you have in mind. Building a warehouse for example is highly suitable in a location that is close to a port.
9. Engage in crowdfunding a Real Estate investment
2019 was the year I met Mr. Charles (not his real name) who happen to be a well-known public figure in the Venture Capital Space here in Nigeria. This was at a business master class that hosted twenty of us in Oriental Hotel, Victoria Island. His story was quite admirable and rich in value. He shared his failures with us and how he was able to pull through, his failed businesses, startups that he invested millions of Naira in but ended up failing as well as those that yielded massive returns. One thing that struck me the most was his thought process during a personal conversation with him after the masterclass and a major statement I remember him saying during that conversation was “Sheriff, many entrepreneurs today like the fact that they own hundred percent of their business that generate ten million Naira profit monthly but what they fail to understand is that with more people coming together to put their resources for the same business model can generate.