Real estate companies are one of the most vilified businesses in Nigeria. As Nigerians, we have a tendency to vilify things, people and businesses based on emotions as opposed to hard, concrete facts or data.
This vilification is starting to spread across the entire real estate industry. At the moment the people taking the most heat are realtors and property consultants for the price of real estate properties, mostly houses.
So much so that just a couple days ago, Bridget Adeyemi of LekkiAjahIkoyi, one of the oldest real estate agency and development company took to her Instagram page to knock back at the people attacking realtors all over social media for listing and selling highly priced real estate properties in $$$.
This vilification didn’t start today, like I said, Nigerians like emotions and sensational stories so much and nothing gets their attention faster than telling them someone is taking advantage of them in one way or the other.
This is why the best and easiest ways in Nigeria for companies to attack and plummet the sales of a competitor’s product is to start unverified rumours about how the competitor’s product has become deadly and dangerous overnight.
Before you can say, “Jack..”, the whole news will be all over WhatsApp and Facebook, of course without anyone being able to trace the source and origin of the story, not that Nigerians care about verifying it in the first place.
No other industry in Nigeria has been the victim of these baseless attacks more than the real estate industry and all its stakeholders. From developers to property agents, consultants amongst others.
Are there bad players in the industry? Of course, without doubt, but like any parent will tell you, it is quite a grave and unforgettable mistake to throw out the baby with the bathwater.
One of the properties we have on the market at the moment is a wonderful cash flow property at Ikate, Lekki and about 2 weeks ago I was talking to a client who wanted 6 units, he is not in Lagos and his main purpose for the property is to use it for investment, cash flow investment, short-let to be specific.
His only concern was who would manage the property for him? I told him that I can connect him to short-let property management companies who will handle the whole thing for him, every aspect of it.
His next question was,”but how will I know if they are being honest with me? What if they tell me they got 20 guests in a month when they got 25?’’
This brings me to the topic for today, when it comes to investing in real estate, should you make use of real estate companies or DIY investing?
DIY stands for do-it-yourself investing.
Now in case you are still confused and not sure of what I am talking about, permit me to clarify the two scenarios for you.
✔ Working with a Real Estate Company:
This means partnering with a real estate brokerage company, a real estate developer, an investment firm or a property management company that will handle sourcing the property for you, deal with all the paperwork that is involved in the acquisition stage, and sometimes even manage the real estate properties for you post acquisition.
They provide unmatched expertise, market savviness, and deep industry connections which they can leverage gladly to get you exclusive and lucrative off market deals, exclusive discounts and other perks.
Or would you rather do;
✔ Independent DIY Real Estate Investing:
This involves personally handling every aspect of the real estate investment process yourself —finding properties, negotiating deals, managing tenants (if applicable), and overseeing maintenance.
This option obviously offers more control but what does a sick person need? More control over their medication or a qualified doctor to take control, and recommend best medications based on his expertise that will lead them back to health?
What does someone accused of murder need? More control over their trial process or a qualified lawyer to argue their case and hopefully get them acquitted?
Now that I have presented the matter to you side by side, my question to you now is, is it really a question?
As much as real estate companies are catching all kinds of bad press, do you really want to go about sourcing for land, negotiating and dealing with customary land owners yourself? The dreaded Omo oniles who can sell the same piece of land to 5 different buyers?
As much as realtors and agents are being accused of selling highly priced real estate properties, do you have the time, energy and I dare say, a touch of shamelessness to go wandering all over Lagos looking for that dream house of yours to buy?
What are the realtors supposed to do when a developer tells them the price he has set for his property? Tell the developer they won’t sell because he priced his property too high?
As much as Lagos developers are being crucified daily on Instagram for managing space too much, not incorporating enough green spaces in their projects and a host of other things, do you have the time to start and build your own dream house by yourself?
As much as you don’t trust property managers and are scared that they will get 25 guests in a month but only report 20 to you, do you have the time to be checking in and checking out your guests by yourself just so you know how many exactly come in every month?
Most importantly, do you really want to be taking your Nigeria real estate market analysis and investment advice from Instagram, self-made “ Nigeria real estate experts”, and self crowned “luxury connoisseurs”?
People who have all the data, know the price of materials and the cost of clearing a container of imported tiles at the wharf. People who can tell from just watching a property tour whether a house is “overpriced” or not, yet have never undertaken a building construction even once in their life.
As much as all the different real estate companies in different sectors of Nigeria real estate are catching bad press, my question to you is, do you really want to do-it-yourself?
Do you want to buy that land, that house and manage it yourself?
Unless you totally have nothing going on, at which point you wouldn’t be able to afford the properties in the first place, I believe your answer is a big NO!
Now that we have established that you need real estate companies and can not successfully do-it-yourself invest in real estate, what then should you do?
The answer is quite simple, invest with and through genuine & reputable real estate companies. I will say this again for emphasis, invest with and through genuine & reputable real estate companies.
When you are buying lands, buy through genuine and trusted real estate companies. When you are buying a house, make use of genuine and reputable real estate brokerage and agency companies. Make use of genuine realtors.
Now I can hear your mind working, I can hear what you are thinking. “But Ugochukwu, how do I know genuine and reputable real estate companies and realtors to help me with my property investments?”
I could tell you but the truth is that I already wrote extensively on these topics previously to learn what to look out for when looking for real estate companies to buy land from, you should read my in depth article on the topic by clicking here.
To learn the dark trick that some, please take note, some not all realtors use to inflate the price of real estate properties, read my in depth article on the topic by clicking here.
Real estate companies or DIY real estate investing? How about the two?
The ideal scenario for you as an investor is to incorporate a mixture of the two. This means that some of the investment process you can hand over to real estate companies while the other process you can handle yourself if you have the time.
For example, when buying houses, you leverage the expertise, connections and indepth knowledge of a realtor or real estate brokerage company to handle the property sourcing, price negotiation and finally, the acquisition while you take care of the property management post acquisition depending on what exactly you want to do with that property.
If it is the traditional rental, then this will be easier for you as you can easily put a “for rent” sign on the gate with your number and contact details and start getting and screening tenants.
If on the other hand you want to use the property for shortlets, then you have 2 choices. Either let a real estate company that manages shortlet properties come in or assemble your own small team who will be taking care of and managing that shortlet property for you because there is just no way you can do-it-yourself.
Another example of successfully combining working with real estate companies to leverage their expertise and then DIY investing to maintain control and maximise your returns is to buy off-plan properties from real estate developers and after a successful completion and handover of the property to you, you can handle the resale of the property yourself instead of asking or relying on the developer to resell for you.
Do not look at my above examples and think that this combination of working with real estate companies while still DIY investing is exclusive to residential real estate. It applies to commercial real estate too.
I like to break down my points and make them easier for you to understand with examples.
So for commercial real estate, you can acquire commercial properties like shops and offices from real estate companies and then handle the leasing and rent collection yourself.
I could go on and on giving examples but there is no need. You already got my point.
Now permit me to cap off with a big disclaimer so that tomorrow if something goes wrong, as it surely will if things aren’t done properly, you won’t say it was Ugochukwu that told me to manage my own property myself.
Before choosing to handle some parts of your real estate investment process yourself, make sure that you have the time and mental space to handle it otherwise my advice is to let a real estate company handle everything because if you already have a lot on your plate growing your business or your company, do you really want to add getting and screening tenants to it?
I am Ugochukwu.
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