The truth is that real estate investments in Nigeria can be really profitable but only when you consider the important factors as you make your decisions. Similarly to other countries, there are some specific mistakes that beginner investors make. It is really important that you consider the following in order to make very smart real estate investment decisions. When Nigeria is your target, think about this:
Real Estate Investment Nature
There are no 2 real estate investments that will ever be the same. If you are a beginner, you are faced with a long term investment that can be pretty problematic in the event you do it wrong. Since you cannot get profit fast, you want to think about the long run. When you buy some land in Lagos you need to basically wait at least 3 years before a return will be made. That is not what happens with other investments. While the return on the investment made can be pretty high, always prepare for waiting.
Focus On One Real Estate Investment Aspect At A Time
In Nigeria real estate you can choose out of various different opportunities. For instance, it is a really good idea to buy old buildings in great places, renovate them and then resell at a huge profit. Some investors will even want to begin their experience as real estate agents. Always start to specialize in a specific field so that you can make the highest possible profit. Then, you move towards another real estate investment type. Especially if you are from another country, you want to be comfortable with what you do and enjoy it so that you can go through all the problems that could appear.
Some people think that in Nigeria real estate investments are not as capital intensive as in other countries. That is completely incorrect. However, no matter how much money is available for the investment, if you can use OPM (other people’s money), it is better for you. Try to find a local partner that knows the market and that offers more knowledge. Banks are also going to offer you more money when you have a partner.
Negotiation Is Vital
Negotiation is a huge part of Nigeria real estate investments. You want to experiment and get the hang of this. Some experts even say that 90% of the success of a real estate purchase is negotiation. The big problem is always paying more than the property is actually worth. Try to locate the actual sellers and avoid the real estate agents. This helps you to negotiate directly and avoid fees. At the same time, do research house selling history. If the property changed hands many times in the past 3 years, there is a big possibility the asking price is much higher than it should be.
Work With Many Realtors
Foreign investors often just find a realtor online and work with them. They do not dig deep to find the very best realtor. You want to check in the locality and find some specialists that are actually living there. This is useful as they have more knowledge. Alternatively, find those that sold many properties like those that you are interested in the past in the location you want to cover. Many fraudulent and greedy realtors exist. You cannot figure out who they are without discussing with more agents.
Carefully Choose Location
One of the main reasons why Nigeria is now considered by international real estate investors is the fact there are so many literally untapped areas that can bring in a very good ROI on the long run. The saying “there are three things important in real estate investment: location, location and location” is even more true here. In so many cases it is better to have one plot in one location than one acre in another. For instance, Osun State land plots can easily appreciate at a rate of 10% per year. A really similar investment in Lagos would bring an appreciation of 200%. The exact same thing can be said about hotels, rental apartments and all other properties.