How to invest in real estate in Nigeria is a question that many people ask. The truth of the matter is that there is no perfect answer to how to invest in real estate in Nigeria. However, we can still give you some pointers on how to go about it.
Investing in the real estate market is one of the best ways to invest your money to secure your future and provide for your retirement. It is a very lucrative business to get into, but you need to know how to invest smartly to get good returns.
If you are an individual who wants to invest in real estate, there are various ways through which you can do so. We all know that investing in the stock market is not for everyone.
There are some people who do not understand how it works or they don’t have the time or interest to learn about it. However, real estate investments seem to be more accessible to many people than investing in the stock market.
4 Smartest Ways To Invest In Real Estate In Nigeria 2022
Do you have the money you’ve been meaning to invest in real estate but don’t know where to start?
Here are four ideas for investing in real estate, with little or no money up front. These ideas are easy enough that even beginning investors can try them.
1. Real Estate Investment Trusts (REITs)
Real Estate Investment Trusts (REITs) represent an intriguing option for investing in real estate. REITs allow you to get the benefits of real estate ownership without having to be a hands-on landlord.
Most REITs invest in apartment buildings, office buildings, and shopping centers. There are also REITs that invest only in mortgages, which are known as mortgage REITs.
The primary advantage of REITs is that they offer diversity and professional management at a relatively low cost. They also allow you to take part in real estate appreciation while maintaining liquidity.
However, there are some disadvantages when compared with other investment options. The most obvious disadvantage is when compared to direct real estate ownership: when you own real estate directly, you may enjoy or rent your property for personal use or manage it yourself. In exchange, you give up liquidity since it’s more difficult to sell your property if you need cash in a hurry.
Other disadvantages include income stream: Unlike owning a piece of property, which provides rental income from tenants, investors in a REIT can’t take advantage of this option since REITs rarely make any money from their tenants. Instead, they distribute dividends based on their profits from investments and sale of properties
2. Property Development
Property development is gaining, planning, and constructing a real estate project. It is the stage of the real estate investment life cycle that starts a change of use of a piece of land from one purpose to another.
Development involves the preparation of the construction budget, determining budget costs, getting financing for the project, hiring an architect or engineer to prepare construction drawings, awarding contracts for demolition and construction, arranging construction loans with a construction lender, hiring a property manager if necessary, and arranging sales efforts with brokers or directly with buyers.
Properties developed into leasehold developments are often developed by property developers known as developers in many Commonwealth countries.
This is one of the most expensive investment schemes in the real estate investment opportunities out there. It requires huge startup capital, overhead, and experience to succeed. They can sell a project that was completed with N100 million Naira for as high as N250 million Naira.
3. Building And Renting Properties
“Landlords and tenants renting” is very common in most parts of the world. If you own a property, either house or apartment, you may ask yourself if it is possible to rent it out to another person, and if so, how do you go about doing that?
Landlords and tenants renting is a simple process and you can start looking for a tenant if you do not have someone lined up already.
This is the oldest model of real estate business and it’s a lifetime business, no doubt. It can be fun in the long run and also give you residual income in a timely manner.
4. Property Flipping Model
Land or property flipping is buying under-valued land or real estate and reselling it for a profit. If you are looking for a lucrative business opportunity, then consider land or property flipping.
The profits that can be made from land or property flipping are certainly not insignificant, but it is important to remember that the risks are also very high.
The average profit margin on this type of business venture is around forty percent, so if you sell one piece of land or property for N50,000,000, then you could make N20,000,000 as profit.
How Much Do I Need to Invest in Real Estate in Nigeria?
Once you have your business plan, your next task is to see how much capital you need to start.
If you are planning to buy raw land, then the amount will be minimal. Because you are buying raw land with no physical structure and that is in a less developed area. However, if you are planning to purchase a used structure at a lower price, then you will need capital.
So how much do I need to invest?
This will depend on what type of investment you want to make (direct or indirect). To make a direct investment, you should have at least N1 million naira (N1,000,000) cash available since this amount covers deposits, stamps, and every necessary business document.
However, if you are investing in REITs, your investment startup capital can be lower than N500,000 (Five hundred thousand Naira) which can be one of the affordable investment opportunities in real estate.
How Can I Invest In Real Estate With Little Money In Nigeria?
You can still invest in real estate with little money in Nigeria. You can do it by getting on the right side of one of the real estate investment companies in Nigeria. These real estate investment companies will provide you with all the information you need to succeed in the world of investing in real estate with little or without money.