- Budget: This is the process of planning / knowing how much you intend to spend on the property you want to acquire.
If you don’t have enough money to do everything you would like to do, then you can use this planning process to prioritize your spending and focus your money on the things that are most important in buying the property.
Budget is simply to balance your expenses with your income. If they don’t balance and you spend more than you intend to in the transaction, you will have a problem. Many people don’t realize that they spend more than they earn and slowly sink deeper into debt every year. In buying a property budgeting allows you in advance to know how much you want to append on the desired property so if a property is above your budget the best thing Is to abandon such land / house and go for the one that resonate with your revenue.
It let you not fall into the debt trap just because you bought a property. It is best you disclose this to your realtor so they can look for what suits you. Other than just bringing any property that tickle their fancy.
Steps for Budgeting In Real Estate
When buying a property be it land or house set Goals that are attainable with the amount of money you want to spend for your desired property. Ask yourself what the features or location I want to buy the property and will the amount am budgeting be enough.
Step II : Identify your Income and Expenses
Before acquiring a property you probably should know how much you earn each month if you intend to pay piece meal or installment so that there will not to be pressure if you don’t meet up or fine as a result of default. The best thing is to buy a property that’s within your budget or income range so that if there are other expenses required before you can take possession of the land or effect repairs in the house.
Step III : Separate Needs and Wants
Ask yourself: Do I want this or do I need it? Will spending this money get me closer to my home ownership goals or further away? Can I live without it? Set clear priorities for yourself and the decisions become easier to make.
Make sure that you are not spending more than you plan or budgeted. Balance your budget to accommodate everything you need to pay for. One easy way to do this is to make adequate enquiries about what additional cost will you be incurring as a result of buying the property or what major repairs will be requiring to achieve your desired test regarding the house or property you intend to buy.
Step V: Put Your Plan Into Action
After conclusion of your plan you need to put it to action by doing all you have establish to execute because it is only by execution that it will come to reality. You need to contact a realtor and communicate your plans to him or her. And ask him to adhere to your budget when getting you a property. After he has showed you a property you need to negotiate in area that you feel it too high, we know that it not all that you want that will be discounted for you but you will be surprise at what may come out of it.
Ask yourself: Have I allocated money for the necessary things that needs to be put in place (Fencing & gate house if it a bare land and if it a house you need to ascertain the cost of minor or major repairs).
This will protect you from going into debt.
These are expenses that occurs in certain period of time like tenement rate paid to government, ground rent, utility bills if you are buying a house. You know that things will “just come up” – Set money aside to pay for these expenses so you can afford them without going into debt.
Adhering to a budget can be a daunting tasks without discipline, so you need to discipline yourself against impulse spending and execute the budget according to plan. Especially if it something you are not use to.
2. Location: In real estate investment or acquisition the area / location you are buying the property is a a very important factor in the acquisition journey because it determines property appreciation or return on investment.
Let talk areas like Lekki in Lagos which was formally known as Maroko before the government demolish the area and turn it to a city – lekki.
Land was being sold in these area in the 90`s as low as #500,000 but getting a plot there now goes as high as #175M and houses there now sells around #500M.
Imagine the capital appreciation if you have investment in that location in the 90`s, you will be smiling to the banks by now.
Another example is what is happening around ibeju lekki and epe corridor now. Land in these area is selling as low as #2M rights now but in the coming year these property would have appreciated immensely because of different government project around that axis.
- 3. LAND TITLE: This plays a crucial role in property acquisition or investment because it is what determines whether a land is free or under acquisition.
A land that is free simply implies that government does not have any interest in the said land and it further title can be perfected while a land that is under government acquisition means the they have interest in the land or has intention to use such land in the future and some of such land can be committed to a project while some may not even be committed to any project it can be general acquisition, this type can be bought from the government. With regards to land use Act 1978 all land is vested on the government, they can ascertain what can be release to the traditional settlers or Omonile as we call them in Lagos.
5 GENUINE TITLE TO A LAND
a)EXCISION: As earlier discussed all lands are vested on the government according to land use Act of 1978 to provide amenities for its citizens but the government recognize that some people have being living or settling on this land from time immemorial for them not to be completely displace or shortchange the government releases some of those land to the indigenous owner (Omonile) for them to do whatever they please with it.
Excision is simply part taken out of a whole and given back to the indigenes (Omonile) of a community to do as they deem fit.
b) GAZETTE: This is a government publication informing the public of their resolutions. A land can be said to be Gazette if after Excision it is publish in government Gazette for the public to know.
A Gazette land is simply known as an Excision which the government has publis
c) COFO: A Certificate of Occupancy is a legal document issued by the government that proves that a person owns land in Nigeria. The Government reserves the right to seize any plot of land or property without a C of O at any time without any compensation paid.
It gives legal right to an individual or company to a land for a period of 99 years. What will happen after the 99 year has not being ascertain as at the time of this report but it can either be renew or rescind.
The purpose of obtaining a certificate of occupancy is to establish that the house or building is in a livable condition according to the law. Such a certificate is usually required to occupy the facility on a daily basis, to sign a contract to sell it and to close a mortgage on the property.
IMPORTANCE OF HAVING A CERTIFICATE OF OCCUPANCY
The following are the benefits of having a C of O;
- Having a C of O ascertains one as the owner of a plot of land or property.
- It prevents the Government from confiscating one’s land or property without compensation.
- Having a C of O increases the value of one’s land, particularly in Lagos & Abuja.
- It prevents a situation where multiple owners claim a single property.
d) GOVERNMENT ALLOCATION OR GOVERNMENT ALLOCATED COFO
This is a land that can be in acres or hectares that has being allocated, assigned, approved by the state government to a registered real estate company to start selling to people across the globe.
It is a legit document that shows that the parcel of land you bought from a real estate company is genuine and secure and has no Government acquisition on it.
Government releases the land to an individual who owns a real estate company duly registered with CAC. As it is the Government that releases such land it safe and secure for buyers or investors interested in buying such property.
This is why buyers or investor must have basic understanding of the property they want to buy or invest in.
e) GOVERNOR`S CONSENT: Governor’s consent is a consent obtained from the governor of a state on a land transaction, without which will be deemed illegal in the eyes of the government and the law. Governor’s consent in Lagos and every other state in Nigeria are absolutely necessary where the holder of a Certificate of Occupancy over land or any other title decides to sell or alienate the land to another person. Every subsequent transaction on the land cannot be perfected until the governor’s consent is gotten.
4) NEGOTIATING A FAIR DEAL: This can be a tricky task in a real estate transaction if the negotiator do not have the basic reasons as to what makes the value of a land / property appreciate or what is the current value land or houses are selling in the area.
It also includes knowing the kind of amenities that is provided by the developer or available in the house or building.
When you are arm with this information’s this task can be as easy as eating a cup cake.
We have highlighted some of this information in this article so there is no need to go through them one after the other again here.
5) PAYMENTS: Before making payments ensures that all necessary document has being viewed and ascertain to be correct including all necessary search in the appropriate departments has being carried out and we advise you make it into the bank account of the titles owner because of future purpose.
6) COLLECTION OF YOUR PROPERTY DOCUMENTS: Upon completion of payment it is imperative to collect all your land document from the seller like receipts, invoice, and contract of sales, allocation letter, survey plan and deed of assignment
7) ESTABLISHING A PRESENCE ON THE PROPERTY: This process involves erecting a structure on your land i.e. perimeter fencing, gate house, drainages etc., this will make encroacher to know that the portion is own by a person other than just buying and leaving it like that for years. Omonile can resell your property/ land