Real Estate is one of the most thriving industries in Nigeria to invest in. To this end, many individuals have seen the need to invest in this industry. One factor that has motivated people to invest in real estate is the time value of land. Land is one of the factors of production that never seems to depreciate. Instead, the more land stays, the higher the market is worth!
As a Nigerian based abroad, there is no better time to invest in real estate! Investing in real estate is not subject to change, unlike the financial market. This write-up discusses the steps to investing in real estate in Nigeria. It also highlights the main reasons you should invest in real estate today. Have a good read!
Reason You Should Invest In Real Estate From Abroad
Here are a couple of reasons you should invest in real estate from Abroad:
• Increased ROI:
Real Estate has been proven to provide a high return on investment to investors. Investors are sure to receive a steady cash flow in the long run. In Nigeria, many states have the potency to offer high ROI in the long run. An example is Lagos State. Lagos State is one of the most visited states in Africa. Due to this, there is more likelihood of people to settle down in the state.
• Growing Housing Demand
There is a high demand for houses in Nigeria. Nigeria is a very populated country. So, more individuals need houses every day. Statistics have also shown that there is a housing deficit of about 20 million. This shows that there is an urgent need for houses, even in the most remote parts of the country!
• Exchange Rate
Nigerians in foreign countries can take advantage of Nigeria’s depreciating currency. How? Since the naira is falling against major foreign currencies, this is the best time to take advantage of it. Nigerians in the diaspora can make it an aim to invest in real estate. In no time, you would see the benefit of doing so.
• Diversified Investment
Real Estate is the only business that appreciates with time. Investing in real estate provides an avenue where your initial capital would multiply. Financial markets are prone to changes and volatile conditions. As a result, your money can easily become valueless when kept for a long time. On one hand, the real estate investment can give some level of financial security and appreciation of funds.
Steps To Take In Investing In Nigerian Real Estate From Abroad
Here are the steps to take when investing in Nigerian real estate:
Step 1: Set Out Your Investment Goals
It is vital to set out your investment goals. Your objectives need to be clear so you know what you are into. You should be clear as to the type of investment you want to make. It could either be rental, reselling or personal use. In addition, you should also determine the amount for the investment. In some areas, investing in real estate may attract some additional fees like tax and agency fees.
It is also important to be certain of the duration of the investment. Do you want to go into long-term or short-term investment?
The answer to this question lies in your budget!
Step 2: Analyze the Nigerian Real Estate Market
The next step is to analyze the Nigerian real estate market. Just like any market, you need to know what to purchase and sell. Similarly, in the real estate market, you need to know what the particular area is all about. Take, for instance, Lagos State.
Luxury and Exotic houses would sell in the Island section of Lagos State. On the other hand, affordable houses on the mainland would generate more income for you. So you need to analyze sections of the market and understand them.
Oftentimes, many have fallen prey to investing in the wrong project. This is commonly due to wrong information. The next section discusses some sources to get information on real estate investment. Have a look!
Resources For Analyzing The Real Estate Market
These are some helpful resources for analyzing the real estate market:
• Property Portal
The property portal on the internet offers a long list of sources to get information on. You can visit different sites to get ideas on some reasonable real estate projects.
• Land Bureau
Of course, the land bureau tools are helpful mediums to get information on. Each state in Nigeria has a bureau on the Internet. Carefully research the state you are interested in investing in. For example, you can access the Lagos State Bureau here.
Step 3: Work With Reputable Professionals
The next step is to work with professionals. In Nigeria, there are three professional individuals you should work with. These include the surveyors, lawyers and property agents. A property agent is responsible for searching for available properties in an area. Of course, agents connect prospective property owners with available lands. This service would attract 5% at the cost of the property.
Moreover, a surveyor is responsible for planning and determining the positions of the property. The purpose of surveyors is to make sure all properties comply with the government plan. One of the benefits is that it prevents encroachment on government properties. However, you need to be careful when choosing a surveyor.
Ensure that your surveyor is registered with the approved body. He should be duly registered with the Nigerian Institution of Estate Surveyors and Valuers (NIESV).
In Nigeria, lawyers play an important role in securing property. The service of a property lawyer would ensure you meet all legal requirements in securing land. Do well to make sure he reviews every document and item.
Step 4: Property Search Documents
Do you know you can search for property status in Nigeria anywhere you are in the world?
Now, you can search for the status of a property anywhere you are. Although this platform is only available for Lagos State. It is possible to search for the property titles and ownership details of a particular project in Lagos State.
If you are abroad, this app can make things seamless for you. The amazing part of this platform is that it is approved by the Lagos State Government. Do well to use this service to improve your property search.
Step 5: Invest Strategically
There are different strategies to invest in Nigeria. If you live abroad, you can easily finance any project without hassle. Most investors prefer the mortgage loan offered by different Nigerian banks. Others prefer the instalment payment plan. Anyone you choose can be accepted by property owners in Nigeria.
Step 6: Property Documentation
There are different property documents needed after purchasing a property. Your lawyer would help you obtain the necessary papers for your property. Any property that does not have the necessary documents may attract punishment from the government. So, ensure your lawyer obtains the documents.
These are the documents needed when purchasing the property:
• Certificate of Occupancy
This is a certificate designed to show the ownership of a particular property. These are the most important documents in a property transfer.
• Deeds of Assignments
The Deeds of Assignments establish the legal transfer of ownership to you. Your lawyer should force the landowner to give you this document. It shows that a property is not stolen and went through the right channel of transfer.
• Survey Plan
This plan establishes the plan of a particular property. It carefully shows the boundaries of a particular property. This plan is usually issued by the surveyor.
• Governor’s Consent
This is another document needed to transfer property. It usually shows the governor’s consent to transferring a property.
Step 7: Investigate The Property
It can be hard to investigate a property physically if you are abroad. The stress of travelling to Nigeria may not be easy. You can ask a trusted individual to help you physically inspect the asset. This is one of our core services at CPack 01. Make sure that the required details you want in the property are clearly, spelt out, request for professional footages of property such as videos and pictures for your perusal.
Step 8: Management Services
The next step is to manage the property. It is advised to hand the property to a trusted and reliable builder or construction engineer. In the case of tenancy, you can ask your lawyer to handle the property. Property lawyers are trained to act as agents to represent the seller of the property.
It is important to note that lawyers would handle the rent collection and maintenance. As you know, the services of a lawyer attract legal fees.
Step 9: Negotiate
Negotiation should be done with your budget in mind. Express your desire to the owner of the land and confirm that the original owner of the land expresses his price via a contractual agreement that is mutually agreed.
when it comes to handling payment, you should involve both your lawwyer and banker for further risk assessment before finalising the transaction.
Step 10: Close the Deal
Ensure that the deal is amicable. Ask your lawyer to sign all relevant documents on your behalf. Ensure there are three or more witnesses when closing the deal. Later on, instruct your lawyers to inspect all property documents.
Types Of Real Estate Investment In Nigeria
Here are some types of Real Estate Investment in Nigeria:
• Rentals
You can purchase a property solely for rental purposes. Of course, this kind of house is in high demand in Lagos State. Prepare a tenancy agreement to bind your tenants. Additionally, ensure your lawyer is in charge of the house on your behalf. This kind of investment would generate cash flow for you in the long run.
• Commercial Spaces
There has been a recent spike in the prices of retail outlets in Nigeria. This is an opportunity that needs investment in Nigeria. You can purchase a group of retail stores in commercial areas like Yaba in Lagos State or Onitsha in Anambra State. These areas are a commercial hub in Nigeria. In no time, you would even yield more ROI than your investment Capital.
Lots more.
Kindly check our this land and house buying guides for more information.
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CPACK01 is your reliable building consultant. You can contact us on (+234) 8167474150, 08165000990 or email us at info@cpack01.com.
