What is real estate?
Real Estate is simply land or any other improvement made by it whether by man or by nature in other words it is considered real property that includes land and anything permanently attached to it or built on it, whether natural or man-made.
Nigeria with a population of over 120 Million people with a housing deficit between 17 Million – 30 Million Housing deficits which will gulp a whopping 21 Trillion Naira in investments indicates an opportunity for investors to catch in on the Nigerian real estate sector.
Real Estate Investment is the process of buying land or Houses to make extra income from it. Real estate is one of the investments that can easily multiply your income in the shortest possible time if done appropriately. It is a venture that has created more Billionaires than any other industry and also it is one common investment among the elite so you are doing yourself a lot of good by keying into real estate investment.
CHOOSE A REAL ESTATE INVESTMENT STRATEGY/ PLAN
Rental:
One of the strategies which investors can use to enter into real estate is by investing in rental properties which can be buying land and building it then people can rent so will be earning passive income from it yearly, these properties may be 2- 5 bedroom apartment units, a room and, a parlor self-contain, a room self-contain, bungalows, duplexes, etc.
You can even build short let or hotels for people to log and you earn your money.
Flipping of Land or Houses
This entails the process of buying a particular land or house and making improvements to it and then sell in a higher price in a short period. The advantage of this method is that you get your money in a short while, it doesn’t require a long wait to cash out.
We have some properties owned by seasonal developers like Landwey, Gracias, Ayhomes, Tirbitat, and Zylus homes that interested investors can buy these properties which are already in a good location, and sell them after some months.
Below are some of the property
Property Development
This is when a real estate developing company buys a vast amount of land and development such land for residential purposes or commercial, such land is developed into an estate for which the developer will provide amenities such as roads, gatehouses, electricity, and fencing the estate.
It also includes building of houses in commercial quantity by a developer company and selling or rent to its clients and all amenities may have been provided
The above mention developer company can also do this, you can click the link HERE to view some of their properties.
REITs Funds
Real estate investment Funds Schemes (REITs) are funds pooled together by a company from different persons or companies and these funds are therefore invested into residential apartments, office blocks, shopping malls, and warehouses. These properties are selected carefully in chosen locations so that the end goal which is making a profit for their investor is achieved.
Some of the REIT companies are listed on the Nigeria Stock Exchange.
There are procedures that are required before buying a property which includes
Budgeting
Is the process of planning the amount to spend on a particular project. There is a need for you as a real estate investor to know the amount you will like to invest in that land or house so that you will not spend more than what you have then developing or doing other things will not become difficult.
For lands that are pocket friendly in Ibeju Lekki and Epe Click Here.
- Location
The importance of Location cannot be overemphasized, it is one of the factors for land or property appreciation. There is a saying in real estate that goes like this – Look for where people are moving to and buy land there before they get there. What this primarily means is that we should invest in such an area before development comes there.
Places like Epe and Ibeju Lekki are making the news now because people are moving massively to these areas as a result of development ie Dangote refinery, deed seaport, new international airport, Lagos food hub in Epe, Lekki free trade zone, Alaro city, Yabatech even the road constructions from Eleko junction to Epe is another huge factor and so many other projects.
- Government Policy:
Policies are one of the drivers of development in an economy and this also includes the real estate sector because if it is favorable the sector will thrive take the example of Maroko which is Lekki which was a shanty town some years ago when the Lagos state government decided to relocate all shanty there and make the place to become a mega city people who saw the advantage in such gesture by the government knew that property appreciation is eminent as at 2022 the land is selling between 150 Million and 500 Million.
You can take advantage of some of the properties available for sale in this axis by clicking the link HERE
Another area that the government has moved massively is Epe & Ibeju Lekki which is boosting many government projects that I have mentioned earlier.
You can click the link HERE to see some of such properties
- Get a Trusted Consultant And / Or Real estate Developer
The real estate sector is a very unique industry because knowledge is key ie knowing the property title and performing due diligence is only the effective way to avoid being scammed and getting a real estate consultant who is like a middleman that can link you to a good developer is very paramount in this process either as an individual or corporate investor and they also understanding the various land titles to guide you through the process.
You can go through some of our properties we have partnered with some of the best developers in the industry.
- Land Titles
EXCISION: As earlier discussed all lands are vested in the government according to the land use Act of 1978 to provide amenities for its citizens but the government recognizes that some people have been living or settling on this land from time immemorial for them not to be completely displaced or shortchange the government releases some of those lands 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.
- GAZETTE: This is a government publication informing the public of their resolutions. Land can be said to be Gazette if after Excision it is published in the Government Gazette for the public to know.
A Gazette land is simply known as an Excision that the government has published
- 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 a legal right to an individual or company to land for a period of 99 years. What will happen after the 99 years has not been ascertained as of the time of this report but it can either be renewed or rescinded?
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, 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.
GOVERNMENT ALLOCATION OR GOVERNMENT-ALLOCATED COFO
This is land that can be in acres or hectares that has been allocated, assigned, and 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 is safe and secure for buyers or investors interested in buying such property.
This is why buyers or investors must have a basic understanding of the property they want to buy or invest in.
- GOVERNOR`S CONSENT: Governor’s consent is 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.
IMPORTANT AREA TO LOOK INTO IN REAL ESTATE INVESTMENT
Take advantage of Free Trade Zone:
Free zones (FZs) are also known as Export processing zones (EPZs). These areas have different rules than the rest of the country, There is a give-and-take relationship between the government and businesses in these zones in Nigeria. Suppose a company commences in any of the free trade zones they are exempted from the customary laws and rules of the government applicable all over Nigeria, especially in the field of taxes and customs duties.
As a payback, it is hoped that such a company will help in boosting Nigeria`s Economic growth and National exports.
There are Seventeen (17) Free Trade zones In Nigeria, some are set up for a particular industry while others are more all-purpose.
By siting your company in the zones you will be enjoying the following benefits
Exemption from any legal provisions relating to taxes, levies, tariffs, and applicable foreign exchange laws
All foreign capital investments, along with their capital gains, may be sent back at any time.
Foreign investors may send any profits and dividends they get back to their home country.
A company does not need an import or export license if established in one of the FTZs.
A business operating in the free zone can sell 25% of its overall output into Nigeria by acquiring legitimate permission and paying the necessary charges.
The company under construction is not required to pay any rent throughout the construction phase. Instead, the rent will be decided by NEPZA once the company starts operating.
Depending on the type of business and the decisions of the relevant government, foreign ownership of a company up to 100% is allowed.
A business founded in a free zone is permitted to hire competent employees and managers from abroad.
The NEPZ has liberalized regulations and simplified the approval and investment processes in EPZs.
In Nigeria, EPZs are close to seaports, have good road connections, and are connected to several airports.
Nigeria has a sizable consumer market, and it is still expanding. Additionally, it has numerous trade agreements with multiple international economic organizations.
One of the main advantages of forming a business in an EPZ is that the Nigeria Export Processing Zone Act forbids employees from organizing any lockouts or strikes during the 10 years of the official opening of a company.
All approved businesses created in EPZ are exempt from the expatriate quota, according to NEPZ legislation. However, according to the expatriate quota, a company can only engage an expatriate if competent Nigerians can fill the post.
Take Advantage of Beachfront Estate
I know some people will say beachfront properties are risky because the water can overflow, for some people ordinary the water fears them but there are many advantages with this kind of property in that you can rent your space for picnic, resort, erect a building or rent it or resell for profit.
If you have an opportunity to buy a beachfront estate at a low cost it is best you take such offers
Because this kind of property appreciates really fast especially when they are sold by developers
You can CLICK this link HERE to get some of our offers of a beachfront estate.
Government Reserved Areas (GRA)
These are places that can be interpreted to be a euphemism for influence and a better standard of living because such areas are mostly occupied by crème the de la crème in the society so while buying property in the area you should know that you are buying into a class and your property will appreciate very fast too because it is mostly the rich that can acquire lands or houses in this area.
Click the link HERE to see the property we have in GRA`s
Buy Property in Urban Areas
An urban area is a region surrounding a city, these areas are very developed meaning there is a density of human structures, such as houses, commercial buildings, roads, bridges, and railways.
As a result, the land or property is a bit on the high side but if you are able to buy one in this area the appreciation rate is very rapid because there are already existing amenities.
Looking to buy land around this area contact us HERE
Buy into mega city projects early
Mega city project is embarked upon by the government or private real estate developer like Landwey, Zylus homes, Gidi real estate investment ltd, chateau royal real estate, Mkh Investment, Ayhomes, Veritasi homes, and so on where vast hectares of land is acquired, and such land is transformed into a mega city by providing world-class infrastructures and amenities like Alaro city, Eko Atlantic City, Ambiance Foreshore, Eko Beach city, Lakowe lakes, Itunu residentials, Isimi Lagos, Hockley, etc.
HOW TO FUND REAL ESTATE INVESTMENT
SAVINGS
One of the ways we can fund our real estate investment is through saving and it can be either personal or company savings which is the most common type of funding because the resources is yours or the company and you can do as you wish or seek approval if it for a company from other board members, moreover investing in real estate is better than keeping your money in the bank where inflation will depreciate its value. Putting it in real estate investment will multiply your return on investment because of its appreciative nature of it.
FRIENDS & FAMILY MEMBERS
Also trusted friends and family members that see your value you can provide them can invest with you by giving you money or borrowing it from you to invest in real estate investment, some of such money can be paid back with interest while some may be as a gift depending on the agreement.
This is a good form of funding because it requires no collateral and nobody will seize your property when you default.
LOAN FROM BANK / MORTGAGE
This is money borrowed from banks or mortgage houses. This kind of loan is usually tied down to a collateral property in case of default of payment of interest and or principal.
It is usually for a particular period of time that interest must be paid on the total sum
SPONSORSHIP DEALS
This is an agreement between two or more people for all parties involved to achieve their objectives. It is usually between a money bag and the owner of land or houses whereby the money bag undertake to perform some obligation in exchange for land or reward ie The money bag can undertake to pay for the survey of their (Omonile`s) land in exchange to get land, their agreement can be upon every acre they surveyed he will get a plot and so on.
The challenge most times about sponsored deals is the failure of one party to fulfill its obligation which usually leads to chaos so if you are doing this kind of deal ensure all loose ends are tired.
COOPERATIVES
A cooperative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through jointly owned and democratically controlled enterprise.
Members of such cooperatives can pull the resources together to get properties from a developer or company at a cheaper rate because of the massive quantity they want to buy, the land can be discounted for them compared to when they are buying it individually.
Therefore land bought through a cooperative is usually cheaper
JOINT VENTURES
This is when two or more people come together to execute a project which ordinary they might not be able to execute individually. One person or company can buy or own the land while the other person or company can build on it while such houses will be shared among the 2 parties base on the agreement
They may rent or sell and make a profit from it depending on what is their desire from the property.
It is a good way to finance a project that otherwise will be daunting for a single person or company to realize because of its capital intensiveness.
PAYMENT PLANS
This is simply paying for a property gradually or install mentally. An investor can buy a property with an initial deposit and spread the balance over a given period of time.
The challenge with this form of funding is that when you default the land or property can be taken from you and your money return minus default charges or the current plan will be increased and it will attract additional money or interest.
FREQUENTLY ASK QUESTIONS ABOUT REAL ESTATE INVESTMENT IN NIGERIA
Where to start real estate investing?
Real estate investment is a very lucrative and capital-intensive business so if you are looking to invest in it you need to be intentional and know at least the basic things required before making a purchase so that you will not land yourself in trouble.
To start a real estate business you need to know the locations that are springing up where you can buy land or houses affordable and improve them then sell higher thereby making a good return on your investment.
Places like Ibeju Lekki, Epe, and Ajah (Lagos) are locations where prospective real estate investors should look for investments in order to make profitable returns
Are real estate investment trusts (REITs) a good investment?
YES – REITs is a real estate investment scheme that pools funds together for the primary purpose of investing in income-generating real estate which includes residential homes, residential apartments, office blocks, shopping malls, and warehouses. The fund managers are dedicated to developing and/ or acquiring high-quality stocks of properties in a selected location. They can also make an opportunistic investment in joint venture developments in partnership with reputable developers.
Some of the REITs Company are also listed in the Nigeria Stock Exchange (NSE)
Is real estate worth it?
Real estate is about only the investment that always keeps appreciation in this crazy and inflationary economy of ours. If real estate investment is done right that is all ends are checked before investing is done. The investment will appreciate over time we guarantee you.
What real estate investment opportunities are best?
I think the requirement for any real estate investment is capital and due diligence once this is done then any investment is real estate is fine because your goal in any real estate transaction is either to make a profit or derivation of comfort from living in your own home.
All of this can be met once the investment is done rightly.
How do real estate investments work?
Real estate investment entails the process of paying for a property to make profitable returns. Funds can be invested into lands or houses as the case may be but make sure that the selected location with development in mind is chosen so that the property will appreciate fast and do your due diligence before buying or investing.
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