Nigeria real estate industry is one of the biggest in Africa.
In fact Goldman Sachs Group, a leading global investment banking, securities and investment management firm rated Lagos as the no. 1 city in the whole of Africa to invest in real estate.
Ahead of cities like Johannesburg South Africa, Nairobi Kenya, Kigali Rwanda amongst others.
This puts you in a very rare and enviable position. You are in the best city in Africa for real estate investment. Congratulations!
However there are many ways to invest in real estate, both directly and indirectly. There are many strategies out there.
SO which one is best for you? Which one is the easiest for you to start? Which one can you start today?
In this article I will discuss the various ways you can and should invest in real estate so you can be able to make a more informed decision.
№1: Rentals/cash flow real estate
This is a real estate investment strategy that involves you developing or buying property then renting it out for either residential or commercial purposes.
This is a common real estate investment strategy adopted by many people. They are popularly called ‘land lords’ in Nigeria and they collect their rental income on an annual, monthly and more recently with short-lets, daily basis.
This type of real estate investing enables you to eat your cake and have it at the same time as it enjoys the both of the two real estate investment worlds which is capital gains and cash flow.
As the property has the capacity to appreciate in value over time while at the same time generating a predictable, consistent cash flow via the rental income.
The cons of this real estate investment strategy is that it requires a lot of capital especially now that building materials are at an all time high and it is very hands on.
This means that apart from the money you will invest getting land and developing, you will still be required to pay with your time and attention to ensure completion of the house, furnishing if necessary and getting people to rent the property.
№2: House Flipping.
This real estate investment strategy mainly involves 3 activities.
First is buying old, run down houses at prices that is well below the market value and renovating them to meet all modern requirements, finishing and selling them off for profit.
This has to be done carefully for it to be profitable as in some cases the cost of renovating to meet modern standards is more expensive that completely pulling down and building the new from scratch.
Another way to easily house flip is to find houses whose owners urgently need cash maybe for a medical emergency or they want to relocate abroad.
More often than not because of the urgency of the situation, the owners are willing to accept offers than are below the market value. As long as you got cash.
Sometime in 2021 one man put his Ikoyi mansion valued at $2M for sale at $1 million because he was battling cancer and needed funds urgently.
It was snapped up immediately. Few months later the new buyer put it back in the market at its market value of $2M and it sold.
Another way is to buy off plan properties. Off plan properties are houses that are still under construction.
This is a common strategy by real estate developers to raise money to complete their projects. They usually put these properties in the market at prices that 40% or 30% below the actual market price.
You can key into these properties and when they are delivered you re-sell the houses at their actual market value and walk away from your profits.
For example I have an off-plan real estate deal that is current selling for 160M, however the actual market value of this house on completion is 200M.
If you key into this project now, when it is completed and delivered in October, our team of sales executives and a network of over 1,000 realtors will put the property back in the market for you and resell it for you at 200M.
You will make 40M without doing a single work in a matter of months.
To learn more about this offer, call or Whatsapp us on +2349030998148
Buying off plan properties below market price and reselling at the actual market price is the easiest way to house flip with profits.
You will make 40M without doing a single work in a matter of months.
To learn more about this offer, call or Whatsapp us on +2349030998148
Buying off plan properties below market price and reselling at the actual market price is the easiest way to house flip with profits.
As it is not as risky as buying old, run down houses and renovating with no guarantee of making profits because like I have already mentioned above, at times renovating is more expensive than completely pulling down and building anew.
At the same time it is not as capital intensive as buying houses that are under distress sale. The first rule of distress sale is that you have to make an outright payment.
Unlike off-plan deals where you can pay conveniently over a period of time.
№3: Land Banking.
This is my favourite. Am a preacher and disciple of land banking. This real estate investment strategy simply means acquiring a piece of land and allowing it to appreciate over a period of time then selling it off for massive profit.
At times as much as 50X, 100X what you originally bought it. This investment strategy works on the basis that land is a very very limited scarce resource with unlimited demand.
The land you buy today for 26M in 5 years time could be selling for N300M.
The father of Paul Adefarasin bought land for just £2,000. Many years later that land sold for $5 million. What other real estate investment will give you that kind of return?
The lady above bought land for just N1.5M, 15 years later she sold it for N90M.
Once again I ask, What other investment strategy will give you this kind of return?
NONE!
The best thing about land banking is that it is the easiest real estate investment strategy out there that will give you extra-ordinary ROI. All you have to do is buy land and go to sleep.
Your land will be appreciating on it’s own.
It is less capital intensive too.
N2M, N5M, N10M will get you a piece of land. The only thing is that you have to be very careful buying these cheap lands. You have to make sure of who you are buying from and the title document of that property to avoid bad situations later.
If you want to get properties with genuine titles that are guaranteed to appreciate massively, call or WhatsApp +2349030998148.
If you want to learn more about land banking I wrote a book a the topic.
Send us a message on WhatsApp by clicking on this link https://wa.link/hg38qw to get a copy today.
№4: Developing to sell.
This is an advanced way of investing in real estate whereby you build houses and sell it off to people who need it for either residential or commercial purposes.
I used the word ‘advanced’ because it requires a lot of cash and has so many other factors involved like assembling the right team, marketing, getting realtors to sell your finished properties amongst other things.
I will go into details of this type of real estate investing in another article.
These are the 4 main ways you can invest in real estate here in Nigeria.
I am Ugochukwu.
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