Nigeria’s economy is booming, and as the need for housing, office, and retail space continues to record steady growth, the local real estate market is rapidly becoming an attractive destination for both African and foreign investors looking to win peak profits fast. Property values are rising across Nigeria, and realtors have already awakened to the benefits of well-timed investments in residential and commercial property, such as quick turnover, low return variability, and greater investment safety compared to other high-yield industries such as gas and oil. For this reason, tapping into the Nigerian real estate sector promises quick gains with minimal investment risk and short sale wait times. Here are a few tips on how to start investing in real estate in Nigeria for maximum ROI over a relatively short period of time.
Residential property development is where the big boys of Nigeria’s real estate industry are already getting the biggest bang for their buck. Based on market research and distribution of current property development projects, you can acquire real estate in a hot location, transform it into luxury apartments or commercial space, and resell with a high profit margin quickly. In many growing cities such as Lagos, snail-paced residential property development and dynamic growth in demand for housing have created a lucrative gap for investors who know that time is money and have the financial muscle to see property development projects through to the end with no delay.
Scarcity of commercial outlets such as warehouses, shopping malls, stores, and offices in growing business hubs opens the door to high lucre and maximum investment safety for realtors who can recognize an opportunity when they see it. As demand for business space continues to grow, investors developing retail-oriented property in strategic areas are looking forward to high rental fee calls and competitive market prices immediately upon project completion. To tap into the power of commercial property development, you should examine plans for future access infrastructure construction: retail and office space built along new transport routes will gain value as soon as people settle in the area.
If you do not wish to jump onto the property development bandwagon, you can turn to land flipping for quick and clean real estate profits. Investing in land is smarter and easier than being a developer: you buy estate in a hot (or the next hot) location, and resell it for sometimes even double the initial price when property values in the area increase. Of course, land flipping requires insight into infrastructure development trends, location research, and financial brawn, but it comes free of extra charges such as construction costs, property taxes, and maintenance fees.
If you have a modest investment budget and cannot afford acres of land, you can still capitalize from Nigeria’s realty by launching a real estate agency. This is a slightly riskier playground, but it does hold immense profit potential, and property dealers across Africa have already leveraged their way to high commission-based revenues. In recent annual reports, 20% net returns have been recorded in Sub-Saharan Africa, thanks to population growth and urbanization, making African countries (Mozambique being one of the brightest examples) a good representative of untapped real estate potential. As a realtor, you should keep an eye out on property for rent or sale, offer assistance to property owners to help secure clients, and finally receive a percentage-based commission for the service on grounds of estate value.
Another way to amp real estate profits in Nigeria, buying property in strategic locations and leasing it for makeshift use is very simple as it requires basic realty knowledge and ready-use funds. Many local organizations are looking for vacant property to convert into business-related space (i.e. car washes, mechanic workshops, outdoor storage space, warehouses, etc.), and granted you do your research carefully, you can hope to return the investment through monthly rent in a year or two and still hold onto the property the value of which will continue to increase over time.
Of course, you can also earn your Nigerian property profits in the traditional way: buy housing units or commercial space and rent them out. But be warned: property taxes, renovation costs, and long-term property maintenance expenses in Africa are likely to increase in the foreseeable future, so if you want to go in and get out fast with your hands covered in gold, buying, flipping, and reselling realty is still the easiest trick in the book.
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