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4 Easy Ways To Invest In Real Estate In Nigeria

Sixteen (16) Critical Questions To Ask When Buying Real Estate In Lagos.
July 19, 2022

4 Easy Ways To Invest In Real Estate In Nigeria

Investing in the real estate sector in Nigeria has become very common over the years.

Real Estate brings a lot of opportunities for anyone willing to invest in it.

The real estate market has plenty of opportunities for making huge profits. However, buying and owning Real Estate is a lot more complicated than investing in stocks

In this article, I will be walking you through, 4 easy ways to invest in real estate in Nigeria.

1. The Gift of Rental Properties

Investing in rental properties refers to buying a property and then renting it out to tenants. 

You become the landlord responsible for paying the costs of maintaining the property.

Ordinarily, you’d charge sufficient as lease to cover all of the costs related to owning a rental property as well as a benefit portion, hence the have to be do sufficient inquire about approximately the rental esteem been charged by proprietors within the zone, who have the same property. 

Owning a rental property naturally takes off you having a settled rental wage annually or month to month. For the most part, properties appreciate in esteem over time, taking off the proprietor with a more important resource.

There are, of course, blemishes on the face of what seems like an ideal investment as you can end up with a bad tenant who could damage the property or, worse still, ends up having no tenant at all. This could leave you with a negative monthly cash flow.

There is also the matter of finding the right property. You will want to pick an area that is conducive for people to live in, also, choose a place that people will love to rent.

2. Real Estate Investment Trust (REITs)

REITs are a form of collective investment scheme regulated by the Securities and Exchange Commission (SEC), which pools capital from investors and uses the same in the acquisition of income-generating real estate, mortgage loans, or a combination of both. 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.

REITs are bought and sold on major exchanges, just like any other stock.

REITs have been found to come with a lot of benefits. One of these is portfolio diversification, as real estate investment offers an alternative to equities and fixed income securities, especially for investors interested in diversification.

Liquidity is also another benefit derived from REITs as it makes for relatively liquid assets (when compared to direct investment in real estate) that can be sold fairly quickly to raise cash or to take advantage of other investment opportunities.

Much like regular dividend-paying stocks, REITs are a solid investment for stock market investors that want regular income.

 REITs also allow investors into non-residential investments such as malls or office buildings and are highly liquid. In other words, you won’t need a realtor to help you cash out your investment.

3. Land Flipping

This means buying land and reselling quickly for a profit. This is one of the smartest investments and it requires little to no effort whatsoever.

Land flipping involves your money as well as in-depth knowledge of land ownership and the buying and selling process, you are good to go. You would have to have a substantial amount of money however if you want to make hundreds of millions but you can start small by buying just one plot and grow to buy tens of plots and acres of land and keep selling all year round.

4. Property Development

Investing in property development is really capital intensive. This involves acquiring properties in nice locations, developing them into luxury apartments, commercial structures, etc and selling at a very high-profit margin.

For example, if you spend N200 million to develop a property in a very nice location, be sure you are going to sell it for N400million.

The location is key if you are thinking of investing in property development.

These types of real estate investments above have only scratched the surface. Within these examples, there are countless variations of real estate investments. As with any investment, there is much potential in the real estate sector, however, make careful choices, carry out due diligence, and research and weigh out the costs and benefits of your actions before diving in.

It is always noteworthy that the appreciative value of real estate depends greatly on the right location. While investing in real estate, the site should not be too far from the top places of interest in Nigeria.

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