Nothing has the potential to mess up the financial trajectory of your generation more than bad and unsolicited, worst real estate advice from people. be very very careful about the people you take advice from.
So you have been thinking about buying land for some time, you know it is the best investment on planet earth.
Finally you are ready to buy land and exactly like backseat drivers, your best friend or family member transforms into a real estate investment guru and starts dropping their hot takes.
Out of nowhere everyone around you have suddenly become a real estate guru.
While it is advisable to listen to your family members and friends in some matters, listening to them on matters such as real estate investment advice is not wise.
Unless they themselves have previously and on more than one occasion made very lucrative real estate investments in the past.
The reason is that many of them will give you advice that seems to be common sense but if you follow it, I guarantee you in a few years time, you will regret it.
Below are 3 real estate advice that you may have heard from either a family member or friend but you should never follow.
Don’t buy that land, it is a bush:
This is the worst real estate advice and by far the most common.
Most people are advised to shy away from buying any land that is not fully cleared and developed or in an area that is not yet developed but the actual truth is that those lands will give you the highest ROI.
Real estate investments is about Vision, about seeing what will be not what currently is.
The people who became mega-millionaires from investing in Bitcoin are those people who saw the potential and bought it when it was selling for less than $1,000.
Between the guy who bought Bitcoin when it was selling for $1,000 & HODL and the guy who bought at $20,000 who made the best returns?
Of course the guy that bought at $1,000.
Why? The answer is simple, the guy that bought at $1,000 saw the potential and bought early, thus buying it when it was still cheap while the guy that bought at $20,000 bought late and expensive because he has no vision, he bought out of hype.
Same thing goes in real estate. Dr Paul Adefarasin of House on the Rock church bought almost 10 acres of land at Lekki Peninsula in the 2000s for just 25 million naira when that place was still bush.
Today, Lekki is one of Lagos most developed area with a very high concentration of HNIs and that land is worth over N5 billion naira.
The land alone, without the structures he has built on it. Below you will see a screenshot of a story of a lady who bought a plot for just N1.5 million 15 years ago, only to sell it now at 90 million naira.
Remember this next time anyone advises you to not buy land for no other reason other than it is bush and undeveloped.
Don’t buy that place, it is far:
This is the second worst advice to take when starting your real estate investment journey.
At times it seems like common sense but the truth is that it is more folly than common sense. Distance is relative.
I always advice my clients to buy land anywhere they can in Lagos, no matter how far it is from where they themselves reside because the truth is that you are not buying the land to go and build your family house on it.
You are not buying it to built a house and relocate your parents from wherever they are to the house.
No! You are buying it purely for investment.
The only time that distance is a factor in the decision making process of buying land is when you are buying that land for the purpose of building a house you yourself or your family want to live in.
Otherwise distance shouldn’t be part of the discussion because the truth is that no matter how “far” anyone says the land you want to buy is, especially in Lagos, development will still get to it.
Lagos is growing by over 6,000 people on a daily basis, according to some statistics.
Nothing drives urbanisation more than population growth and with Lagos growing by more than 6,000 people per day, no matter how remote the location you bought.
It is only a matter of time before development gets to it and your land is selling 50X, 100X what you originally bought it.
This is why Goldman Sachs, which is a leading American multinational investment bank rated Lagos as the best city in the whole of Africa to invest in real estate.
Spread your payment for as long as possible:
This one is an industry secret that am about to reveal to you right now.
I know the current economic conditions and how it may not be all too convenient financially at the moment for people, however spreading your payment for a property for too long is not advisable.
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The reason is that some developers oversell their estates, for example let’s say that an estate only has 1,000 plots but they sell 1,200 plots of that estate.
This means that they collected money for extra 200 plots which they can’t allocate because the estate only has 1,000 plots.
What they do is that the extra 200 plots which they have collected money for, will be allocated elsewhere.
How do these developers choose the people that will be allocated elsewhere?
They choose from the people that took the longest to finish paying for their property.
This is because allocation happens on who finished paying first basis.
If you make an initial deposit but is spreading your payment for let’s say 12 months, someone that makes an outright payment 6 months, 8 months after you started paying in installments will be allocated their land before you.
This leads to a situation where you buy estate A, but you are getting estate B. For no other reason than you took too long to complete your payment.
There are even horror stories of people who got their money refunded minus 30% because they didn’t finish paying up on time and the developers found someone willing to buy the land at a higher amount.
So when thinking of buying a land and the developers are telling you that you can pay installments over 24 months, 14 months, 12 months period.
Think very well before going for a very long payment plan. Go for the 6 months or at worst 8 months payment plan and whatever you do, make sure you DO NOT DEFAULT, this is for your own sake.
These are the 3 worst advice you may get when trying to buy a land that you should do well to not listen to.
I am Ugochukwu.
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