Real estate investment in Nigeria has been and continues to be one of the safest ways to amass riches for decades. In other parts of the world, the real estate sector brings in trillions of dollars every year. Real estate has shown to be a reliable source of wealth creation and preservation over time.
This essay clearly explains why and how you may join the many people who profit from Nigeria’s real estate market.
What is Real Estate?
Real estate is defined as property that consists of lands, buildings, and any flora, fauna, and other natural resources that are present on the aforementioned property.
So why would one invest in real estate?
Nigeria’s real estate market is one that is constantly expanding. Given the increased urban migration and the rising population of Nigerians, the need for housing will rise as a result of the country’s growing population. It is safe to assume that an investment in real estate is preparing for a predicted future in light of this prognostication. An excellent financial option is to rent to purchase an apartment in real estate.
In Nigeria, a severe housing shortage exists. In Nigeria, the housing shortage is at an all-time high. According to the Centre for Affordable Housing Finance in Africa, barely 25% of Nigerians were homeowners in 2016. By entering the real estate market for this reason, many Nigerians will be able to purchase homes.
1. Offers capital appreciation
The real estate market is vulnerable to fluctuations in a home’s value. Real estate is a business where people buy and sell real estate as well as rent out their properties to others. Additionally, if one has the means, investing in real estate shouldn’t require much persuasion given how much of an investment it is for one’s future descendants.
One of the numerous benefits of investing in real estate is the consistent income it generates.
It’s important to understand the main forms of real estate in Nigeria before learning more about how to invest in them so that you can focus your attention:
2. Commercial Real Estate
Commercial real estate, as its name suggests, is a type of property only used for commercial activities. Such as offering offices, retail stores, hotels, and restaurants. Residential use is not permitted on commercial property.
3. Residential Real Estate
Additionally self-explanatory is residential real estate. It is a type of land that has been developed for living. It is the most popular and well-known type of real estate, as well as the one that people are most at ease investing in.
4. Industrial Real Estate
This real estate includes buildings utilized by businesses, such as farms, factories, business parks, mines, and garages. Usually, the properties in question are larger and located in better areas.
Compared to commercial real estate and the others, residential real estate is less expensive and more accessible to individuals as an investment.
Real estate should be subject to adequate due diligence.
How to Invest in Real Estate
6 Steps To Investing In Real Estate In Nigeria
1. Do extensive background research and fact-finding
The use of the internet has made it simpler and quicker to find the appropriate information about real estate investments. To stay up to date on the most recent information, you can also set up notifications from online service providers.
Aside from the internet, interested parties in the real estate market can find information on a variety of other platforms like the print media and the residents in the area (real estate agent)
Before you begin, you must have a basic understanding of it. This will help you sort through the many possibilities accessible and find the reliable information you need.
2. Select a real estate market based on your needs and goals.
Prior to getting started, a prospective real estate investor must decide what goals investing in real estate can help them reach. Choose a portion that will be more profitable to you over the long or short term depending on your ambitions. Determine prosperous real estate markets.
3. Your investment decisions should be in line with your objectives.
Finding a growing real estate market does not always need making investments with high rates of return. There are many profitable activities and earnings in potential markets in real estate investments.
4. Monetary capabilities
Before investing in real estate, it is important to establish your income pattern because every person’s source of finance is different. It will guarantee that you reach your intended objective of purchasing real estate in the first place and maintain sound financial standing in the short- and long-term.
5. Keep your business operations inside the bounds of the law.
Understanding the regulations that control the real estate sector will help you avoid many legal disputes, fines, and financial losses. The Land Use Act (1978) grants state government’s strong control over land that is located inside their borders, despite the fact that you may have the right to own property in Nigeria as a Nigerian.
6. Always look to the future
There should be a chance for future financial gain when investing in real estate. It doesn’t matter if your property of interest is not near any necessary infrastructure. You can never go wrong, though, if it’s relatively close to the rapidly growing urban centers.
When investing in Nigeria’s real estate market, mistakes can be made. The aforementioned criteria, along with many more, must be met in order to become a successful investor. A crucial point to remember is that Nigeria is a developing country with a lot of potential for real estate investments. You can count on getting a good return on your investment.