Real estate investment in Nigeria is has proven over time to be a lucrative investment with relatively low variability of returns. With an investment in real estate, you are sure your investments are protected from inflation, guaranteed cash flow, and have a source of passive income. In Nigeria, the real estate market presents diverse opportunities and this is one amazing thing about it. This diversity creates an avenue for everyone to invest and grow in the business, and also expand your portfolio.
However, the real estate market provides a wide range of investment opportunities for generating returns. It can also be very complicated, and without proper understanding can cause an error. Below are a few opportunities to be considered if you’re looking to break into this lucrative industry.
1. Investment in Rental Properties: This investment opportunity Is a very common one and it has existed for so many years. This has to do with the purchase of a property or properties for the sole purpose of renting to tenants. You automatically become a landlord responsible for paying the cost of maintaining the property.
When investing in rental properties, there is a need to carry out ample research on the rental value been charged by the landlord in the neighborhood who have similar properties. This is done so you have an idea of how much to charge on all costs associated with owning a property as well as profit portions.
Rental property investments provide an avenue for passive income. What this means in simple words is “you make money in your sleep”. Owing to a rental property automatically leaves you with a fixed income either yearly or monthly. Properties appreciate over time, leaving the landlord with a more valuable asset.
2. Land Flipping: This is a type of investment that involves the purchase of landed property and reselling quickly for a larger profit. This form of investment is one of the smartest real estate business opportunity in Nigeria as it involves little or no effort. What is required is the capital and ample understanding of the buying and selling process and land ownership. You can begin with a plot and move slowly to tens pf plots and then acres of lands and keep growing. Land flippers don’t hold on too long to a property before they sell, as soon as a viable opportunity presents itself, the land will be sold and used to acquire another.
3. Property Development: This form of real estate opportunity I highly capital intensive. It involves the development of properties or land into higher use-value. To get a good profit margin from this investment capital I essential as it a very capital intensive investment. For instance, if you develop a property for 300 million Naira, you may decide to sell the said property for 500 million Naira. It is important to state that, for this investment to be successful, the location is very pivotal
4. Real Estate Investment Trusts (REITs): Real Estate Investment Trusts (REITs) are corporations or trusts that use the combined capital of many investors to acquire and manage income property or mortgage loans. They are traded on NSE just like stocks and can be bought or sold through a stockbroker as with other types of shares.
Real estate investments have proven over time to be one of the most profitable business ventures there is but, like every other kind of investment, it has its associated risks and that is why it is very important to exercise caution while investing. Also, real estate is versatile hence, there is no reason to keep waiting for that large capital to begin investing, you can start with what you have.