How to Invest in Real Estate in Nigeria

  | 7 min read
how to invest in real estate in nigeria

Investing in real estate has become a necessity because it is one form of investment that keeps you out of reach of inflation over the years. Land or property investment is definitely worth it over the years.

This article will show you how to invest in real estate to make a lot of money in Nigeria, or conversely, how to save a lot of money on your real estate deals because a lot may go wrong quickly.

Nigeria, with its rapidly growing population, is a top investment location and a ready market for a variety of investments, including those in technology, financial services, and real estate.

However, it is important for us to understand and recognize the uniqueness of our situation in Nigeria while discussing investment in real estate.

Before we proceed, it is important we understand what real estate investment is.

What is real estate investment?

Buying, managing, and renting out or selling real estate for profit are all aspects of real estate investment. A real estate entrepreneur or investor is someone who makes active or passive real estate investments. To increase the value of their investments, some investors actively develop, upgrade, or remodel real estate.

Check: Land for Sale in Nigeria

Things you should do to Invest in Real estate

1. Make Research

The media, the internet, and other resources are excellent places to go for information if you’re interested in the real estate market. Also feel free to  Speak with local, friends and families. Visit Google and appropriate Nigerian property listing websites for real estate. Make search term alerts on Google. You will always be informed in this manner. Before you can engage with it, you must comprehend it. It is significant to remember that finding real estate information in Nigeria needs work on your side, whether you are in the nation or otherwise.

2. Decide your preferred property sector

Choose a sector that will help you more depending on your goals. It could consist of commercial or industrial space, shopping malls, apartments, or offices. For instance, investing in the residential market might not be the best choice if you seek quick returns.

3. Get the correct details

Take caution not to do business with somebody you don’t trust. Consult industry professionals, a lawyer, and be sure to get everything sorted out, from the obligations of the federal government to the owner’s concerns. Another well-known reality is that real estate con artists are rife in our major cities, trying to sell homes whose owners are away and even including phony title deeds. Beware. Consult with necessary experts, such as surveyors, who will examine the property and provide you with appropriate recommendations.
Employ architects and service engineers when it comes time to start building. Don’t rush things and spend money you don’t need to.

4. Choose rising real estate markets

They might not be experiencing a boom right now, but thanks to infrastructural improvements and convenient access to core business centers, that could soon change. Where a motorway is developed, it eases traffic and the working class tends to move in that direction, making it a noble cause to build high-rises to rent out to them.
Why does this matter? If residential real estate is your area of interest, you should concentrate on the middle class. Nearly half of the middle class in Nigeria (those earning an average monthly salary of N80,000–N150,000) are acquiring items or planning to do so to enhance their life as years go by. This suggests a significant consumer boom.

5. Know Nigerian property law

As a Nigerian, you have the right to own property. However, the 1978 Land Use Act grants state governments control over land that is located inside their borders. After a lengthy and bureaucratic procedure, they in turn make it available to you. After that, you’ll get a certificate of occupancy so you can start using the land, like selling it or developing it. Your right may also be restricted if you reside outside of your place of origin, which is at best very debatable and may lead to ethnic strife.

6. Invest for the future

Your property of interest may not currently be near any basic infrastructure, but if it is near one of the rapidly growing urban districts, you can never go wrong. You might sell it for millions more than you paid for it a few years from now. Avoid having a narrow perspective.

7. Market your properties online

In this day and age, you cannot afford to ignore the Internet. The Internet is one of the more cost-effective ways to drive visitors to your business after it is up and running, whether it be through having a website or keeping up a social media presence. Online marketing may be your best option if you want to draw buyers or vendors.

The Nigerian real estate market is no different from other real estate markets in that mistakes can be made, thus one must learn patience and good decision-making. Keep in mind that Nigeria is a growing market with enormous potential.

8. Decide how you will fund your investment

The source of money may differ depending on where you are in life. It might come from financial institutions or from friends and family. You might potentially possess the funds. 
As you approach the bank or other establishment, be sure you are prepared. To convince them to grant you the money, your investment strategy must be convincing enough.

Let’s take a look at several ways you can fund your real estate investment in Nigeria.

SEE ALSO: Properties for Sale in Nigeria

1. Personal funding

According to your budget and the scale, you can simply fund Real Estate projects from savings and wages in this region of the world—there is something for every budget and every size!

2. Use Payment plans

There are several payment plans available to you even if you are unable to pay millions up front.

You can spread out the remaining payments after making a required down payment, which represents a small portion of the total price, over a period of one month, three months, six months, twelve months, twenty-four months, or even two to four years.

After the third month, these often have a small amount of interest connected, however some are interest-free.

3. Use Bank Loans

Possibly not that well known among individuals, but many real estate developers and businesses use this tactic. It all revolves around using OPM (other people’s money) to fund real estate developments.

Even in this region of the world, where banks are typically reluctant to lend money to individuals and businesses, they are happy to open their checkbooks for real estate projects and developments.

Even after receiving earnings from their real estate investment projects, most corporations still meet up. The interest rate may be a topic for another day.

4. Cooperatives

This is particularly common in Lagos, where groups of people, businesses, and organizations come together to pool money and finance construction projects. The payment conditions are flexible, and by working together they can buy land in large quantities, begin development concurrently, and protect the land rather than acting alone in a pack of wolves!

5. Sponsorship deals

When ancestral landowners (also known as omo ni ‘ile) with a sizable parcel of property wish to raise money for themselves, they occasionally collaborate with developers and sponsors to develop and sell their land.

This strategy is known as sponsorship.

They then reward you with plots in proportion to the amount of land you really work on.

Major real estate businesses like Landwey, Pwan, Veritasi, Revolution Plus, and others acquire large tracts of land in Ibeju Lekki and Epe in this way.

6. Joint Ventures

Another method of financing real estate businesses and investments is through joint ventures. Usually, there are two, three, or even more parties engaged;

The property’s owner (usually owned in a prime area or a massive expanse). the person or company interested in building infrastructure and developing the land or property. The investor; frequently, the developer and the investor are one and the same, but occasionally, the investor gathers funds to either carry out the project or contribute to the project in exchange for an anticipated return upon the sale or rental of the property.

In conclusion, Investing in real estate requires you to step several steps like the ones listed above but it still remains the best form of investment. Take that step today and invest.

Christian Nduaguba