Investing in real estate in Nigeria can be a lucrative and rewarding venture, but it’s also surrounded by myths and misconceptions that can discourage investors from investing. These myths often create unnecessary fear and confusion, preventing people from recognizing the true potential of the real estate market. 

In this article, we’ll debunk 10 common myths about real estate investment in Nigeria and provide a clearer perspective on what the industry really entails.

 

1. You Need Huge Capital to Start

One of the most common myths about real estate investment in Nigeria is that you need millions of naira to get started. While it’s true that some real estate ventures can require huge capital, there are various ways to enter the market with modest amounts. For instance, opportunities like land flipping, real estate crowdfunding, or even partnering with others can reduce the capital required.

Many investors begin by purchasing smaller plots of land in developing areas, which are often far more affordable than properties in established urban centers. These properties can appreciate significantly over time, allowing for substantial returns.

 

2. Real Estate Investment is Only for the Wealthy

This myth goes hand-in-hand with the idea that you need large sums of money to invest in real estate. While wealth can provide access to high-end properties and developments, real estate is not only for the rich. This is why there are options like fractional ownership and flexible payment plans, if you are looking to earn a steady income can start building their real estate portfolio.

The key is starting where you are, even if that means beginning with smaller properties or less developed locations.

 

3. Real Estate Investment is Risk-Free

People see real estate as a sure means to generate wealth with little to no risk. Although it is true that real estate can offer stability compared to other investment types, it’s not entirely risk-free. Factors such as economic downturns, fluctuating property values, legal disputes, or environmental issues can impact returns on investment.

So, as an investor, you need to conduct thorough research, seek legal advice, and evaluate the market before making any commitments. Proper due diligence is key to managing risks.

 

4. Land in Rural Areas Doesn’t Appreciate

Some believe that only properties in urban centers or developed areas will appreciate in value. This is far from the truth. In Nigeria, land in rural or less developed areas experience significant appreciation, especially as infrastructure expands and new developments emerge.

Cities like Lagos and Abuja were once considered ‘no-go’ areas. Today, areas like Ibeju-Lekki (Lagos) and unpopular areas in Abuja are now prime real estate hubs due to government projects and private developments. Some investors who bought land early in these locations have seen huge returns.

 

5. Real Estate is a Quick Way to Get Rich

Another popular myth is that real estate investment guarantees quick and immediate profits. The truth is, real estate is more of a long-term investment that requires patience and strategic planning. While some opportunities might offer fast returns, most investments take time to mature.

You need to understand that real estate requires a long-term outlook that can help you temper expectations and avoid disappointment.

 

6. Once You Buy Property, It Will Manage Itself

Many people assume that once they’ve bought a property, it will automatically generate income or appreciate in value without any further involvement. However, like any other business, real estate requires ongoing management and maintenance.

If you are renting your property, you need to ensure your tenant satisfaction, handle repairs, and keep up with the market news, as they are necessary for maintaining and increasing rental income. Even vacant land requires oversight to avoid issues or legal disputes.

 

7. All Real Estate Agents are Trustworthy

While there are many reputable and professional real estate agents in Nigeria, the sad news is that the industry also has its share of unscrupulous individuals. Some agents may misrepresent properties, increase the prices, or engage in fraudulent activities.

This is why it’s important to work with registered agents or well-known real estate companies like MeritAbode Nigeria Limited. Verify their credentials and check reviews or referrals. This can help you avoid falling into the wrong hands.

 

8. The Property Title Isn’t Important

Many investors, especially first-time buyers, underestimate the importance of having a clear and legitimate title to the property. They often rush into deals without confirming the title documents, thinking it’s a mere formality.

However, proper documentation is highly necessary in Nigeria’s real estate market to avoid future legal disputes. Always ensure that properties come with valid titles, such as a Certificate of Occupancy (C of O) or Governor’s Consent, before purchasing.

 

9. You Only Make Money Through Rent or Sales

While rental income and property sales are common ways to make money in real estate, they are not the only options. Investors can also explore opportunities like land banking (buying and holding land for future sale), joint ventures, and real estate investment trusts (REITs).

Additionally, with the growing trend of short-term rentals such as Airbnb, property owners can diversify their income streams beyond traditional rental arrangements.

 

10. Real Estate Investment is Only for Experienced Investors

Some believe that without experience or deep industry knowledge, they cannot succeed in real estate. While experience is beneficial, it’s not a needed skill for you to get started. In fact, you’ll see that many successful real estate investors began without any formal experience but educated themselves along the way.

With the abundance of information available today, through books, courses, seminars, and mentorship programs, anyone can learn about real estate investing and make informed decisions.