Nigerian real estate property investments have so increased in popularity in the last few years that they have seemingly become a trend in the business today. But while there is no shortage of opportunities to make enormous profit, the process isn’t always simple.
The practice of investing in rental properties is about as old as land ownership itself. You purchase a have it rented out. You will become a landlord, who is responsible for the maintenance of the said property. To cover the costs of doing so, you would charge your tenant a monthly amount that is enough to give you a decent profit at the same time. By owning a rental property, you automatically have a fixed rental income ever month or every year. Properties generally appreciate in value as time goes by, meaning your asset as a landlord will increase its value.
Real Estate Investment Trusts
Not a lot of Nigerians have some knowledge of Real Estate Investment Trusts . REITs are a collective investment scheme under the regulation of the Securities and Exchange Commission (SEC), where capital is pooled from investors and he money is used to acquire real estate properties, mortgage loans, or a combination of the two. The portfolio of underlying assets is handled by a team of professionals whose job is to maximize the profits of investors, who will be able to hold an indirect interest in real estate following by way of a flow-through set-up, and it will be as though the property were a direct investment. Like any other stock, REITs are bought and sold on major exchanges.
In land flipping, the investor purchases land and sells it fast for a profit. This may well be one of the smartest ways to earn with real estate, because it returns a big profit while demanding little to no work from the investor. All you need is your capital and a good understanding of land ownership and the buy and sell process. The more capital you have, the more properties you can “flip” and the faster your profits grow.
Investing in property development is capital-intensive. You must purchase properties in prime areas and put up apartments, commercial buildings and the like, before selling them for huge profits. So for a N200 million property investment project, most companies will sell it for twice the capital. When it comes to property development, keep in mind that location is critical.
The above are only four types of real estate investments in Nigeria, and we have only scratched the surface. There can be a lot of variations under each of these examples. The best news is, there’s huge potential in Nigerian real estate investments, but you need to be wise with your choices, practice due diligence, and weigh costs against benefits and benefits before jumping in with your capital.