Over the years real estate investing has become lucrative and extremely profitable over the last couple of years and thus become a common investment trend.
Investing in the real estate sector in Nigeria has become increasingly popular over the last couple of years and has become a common investment thread. Real estate investing involves the purchase, ownership, management, rental and/or sale of real estate for profit.
In Nigeria today the real estate industry can be said to be one which has produced lots of millionaires irrespective of inflation or a pandemic. The beauty of real estate investing is that it has various opportunities and everyone has an opportunity to invest, irrespective of whether you are a millionaire or not.
According to, Pison Housing Company (2010), there are 10.7 million houses and we regard this statistics highly inadequate when compared to the size of the nation. In Lagos alone as of 2013, the commissioner for housing put the figures to 4.75 million houses. This surely is a huge deficit.
There is an increase in the urban population and there would be a need for shelter, retail shops and office spaces. This has made the sector a honey pot for investors as it is the fifth-largest contributor to the Nigerian economy thus, the rise in real estate development companies too.
Many investors are plagued with doubts, wondering if investing now is the right call. However, the intelligent ones are not moved by pondering but taking action to secure assets that they perceive to appreciate on a long-term basis.
Real estate investments in Nigeria hold a lot of opportunities, below are just a few to consider if you’re looking to break into this lucrative industry:
- Land Flipping: Land or property flipping takes place when a property is purchased and resold quickly for profits. This requires little or no effort and is regarded as one of the fastest ways to make money selling real estate in Nigeria.
To get good returns on your investment you would need to have an in-depth knowledge of the property and your profit from sales. There are also a number of factors you need to consider before buying a property in Nigeria to ensure you’re not on the losing side.
You can start with a half plot, then move to a plot and slowly work your way to acres then hectares of land. Land flipping is a short term investment opportunity as properties are not held for so long before they are sold.
- Rental Property: This form of investing is as old as real estate. You purchase a property or properties, get it in rent-ready condition and make it available for rent. You become the landlord responsible for paying the costs of maintaining the property.
The urban population would continue to be on a rise in Nigeria and the need and demand for shelter would always be a given. Therefore providing an affordable housing unit for rent is a very profitable real estate business opportunity in Nigeria.
Owning a rental property automatically leaves you having a fixed rental income yearly or monthly. Generally, properties appreciate in value over time, leaving the landlord with a more valuable asset.
- Property Development: Property development, also called real estate development involves the acquiring properties in nice locations, developing them into luxury apartments, commercial structures, etc and selling at a very high-profit margin. It is a multi-faceted business which can encompass any of the following:
- Buying land and building property on it;
- Renovating, extending or improving property;
- Converting property from one use type to another.
This form of real estate investing is capital intensive and location of the property or project is pivotal.
- Real Estate Investment Trusts (REITs): Real estate investment trusts are not really known by most Nigerians. Real Estate Investment Trusts (REITs) are a form of collective investment scheme regulated by the Securities and Exchange Commission (SEC), which pools capital of many investors to purchase and manage income property and or mortgage loans.
Just like stocks, REITS are purchased and sold on the major exchanges. The portfolio of underlying assets is placed under professional management to maximize returns to the investors, who are able to hold an indirect interest in real estate on a flow-through basis, placing them in a position as if the property were held as a direct investment.
Having knowledge of the opportunities in the real estate market, it’s time for you to decide on which real estate investment opportunity suits your budget. Start somewhere and grow because real estate investing is a business for long-term investors.