Estimated reading time: 6 minutes
Since time immemorial, real estate has been one of the best ways of making money. The reason? Because land will always appreciate.
Buy a land today, and by the time you are selling it tomorrow (literally) you can bet it would have appreciated.
In spite of the fact that not so many people truly know how to do the real estate business in Nigeria, if you take a good look around you, and you will see there is a boom in the real estate business in Nigeria.
New real estate companies are coming up, and most of them have your favourite celebrities as brand ambassadors. What all that is telling you is that there is, more than ever, massive opportunity in the real estate sector and you should tap into it.
But how? That is the whole essence of this write-up. Read on to find out.
Contents
How To Invest in The Real Estate Business in Nigeria
1. Buy Rental Property
Everyone wants a house they can call their own. People save for years to achieve this. And then some people go as far as acquiring houses 2, 3, 4 and even more. And they spend money every now and then to maintain these properties, which have now become liabilities.
Instead of this, why not invest in real estate by purchasing rental properties. In other words, rather than buying several houses for yourself, why not buy apartments and put them out for rent to make returns.
If you have ever paid house rent in Lagos or Abuja, you will understand how lucrative this is.
It has its downside, however. And that is managing tenants.
From issues of payments to that of house maintenance, tenant management sometimes constitute a headache for rental property owners.
The solution to this is simple – get yourself a lawyer or agent to help manage the property.
2. Put up Apartments on Airbnb
Did you know that one of the ways to start your journey to the real estate business in Nigeria is by starting out by putting up unused spaces like your BQs, Guest rooms, etc on Airbnb for good returns?
There are a lot of agents out there in Nigeria now that would gladly partner with you to help manage your space. They do the dirty work of managing your space and you take a back seat and just take in commissions.
3. House Flipping
Imagine you have been using an iPhone for the past three years. As a result, the smartphone is no longer looking attractive.
If you try to sell the phone as it is, be sure no one will want to buy it for much money.
But if you fix the phone make it new again, then prospects wouldn’t mind paying a reasonable price for it.
This is similar to how house flipping works. It’s a real estate investment strategy in which you fix up an old and probably ugly-looking property to sell for a better price.
And when you want to do house flipping, you must bear in mind the 70% rule.
According to Investopedia, the 70% rule states that an investor should pay at most 70% of the after repair value (ARV) of a real estate property minus the needed repairs.
3. House Hacking
House hacking is an investment strategy in real estate in which you can make money by renting out your primary residence.
If you have a duplex, for instance, you can rent out a unit and occupy the other unit(s).
You can use the money you make from the rent of a unit to maintain the remaining units and still have some cash to keep to yourself.
4. Property/Estate agent
Maybe you don’t have a land or property of your own to sell and don’t have enough money to buy any now. Not to worry, you can still make money from real estate as an agent.
As a property or estate agent, you serve as a middle man between property owners and buyers.
The widely popular standard is that agents get 10% off every property sold.
What most agents do is try to locate a community with great prospects and virgin lands; they then go into agreement the leader of such a community.
Now having the permission of the community leader, they go ahead and advertise the lands available for sell in the community to potential clients and make their 10% on every purchase.
Other ways to make money from Real Estate
Perhaps you don’t have the capital to buy properties or don’t have the time going to communities as an agent; there is still something for you in the real estate sector.
Some of the real estate companies in Nigeria are quoted in the Nigerian stock exchange. That means you can buy their shares and make money from their dividends.
As stated earlier, the real estate sector in Nigeria is currently experiencing a boom, and so it presents an excellent opportunity to make a profit through shares.
Of course, do your due diligence before buying the shares of any company.
2. Land Survey
There is so much opportunity to make money in real estate as a land surveyor.
Of course, you first to be a trained surveyor. Then you will have to connect with real agents and firms to make sure jobs keep flowing in.
3. Architecture
Architects are responsible for drawing building plans for houses before they are constructed. This is another opportunity to make money in real estate in Nigeria.
Buildings don’t get approved in Nigeria until there is a plan which can only be drawn by architects. This goes to show how important this is to the sector and how lucrative it is.
The fees for architectural services are calculated based on the type of property and its location.
Architecture is a special skill that you can acquire from institutions of learning.
4. Legal services
Are you a lawyer or legal practitioner? You’ve been missing a lot if you’ve not been paying attention to making money from real estate.
Since it’s a sensitive business, the services of lawyers are always required in real estate.
One document that is required before a land purchase can be made is the deed of conveyance. The document conveys the ownership of the land from the seller to the buyer.
For a deed of conveyance to be valid, it has to be endorsed by a lawyer or legal practitioner, at a fee of course. And that’s not all.
In the event of issues coming up while ownership is about to change hands, the services of a lawyer will still be required.
Conclusion
And there you have the varieties of ways you can make money from real estate in Nigeria.
While some require some capital, some require some special skills and most just your leg (to walk) and mouth (to speak).
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