First and foremost, if you are planning to buy land as an investment or for any other reason, I strongly advise you to enlist the help of a qualified real estate professional.
This is critical if you want to make a lucrative land investment .
For example, a client of mine almost bought a land with fake documents.
Most of the property documents on the streets of Lagos are clones, and they’re being utilized to advertise the sale of landed properties with little or no suspicion of their dishonesty among potential purchasers.
He was shown this land in Lagos’ Aja’ Eti Osa Local Government Area and given the accompanying documents (copies of the C of O and a registered survey) that purportedly belonged to the land he was shown.
The land he was shown appeared to be ideal for his intended use, and after some haggling, they agreed on a selling price.
His wife was convinced that the buyer was genuine and kept insisting that he should pay because the offer was good.
My client almost paid, but on a second thought he decided to verify the title and someone recommended the Real Estate Guider.
He called me and after due consultations and paying for our services, we swung into action and after thorough investigation at Alausa Land Registry, we discovered that the Certificate of Occupancy was cloned.
This client till today is forever grateful to us for helping him avert the terrible disaster that would have befallen him.
It is very important to recognize the value of having an expert on your side when dealing in such transactions as land investment.
Now, if he hadn’t used the services of a seasoned real estate consultant, he would have paid for a land with fake documents, and from there, anything may happen: a court case, time wasted, a major delay and loss of huge sum of money.
Purchasing a piece of land that is currently on the market without first reviewing the vendor’s tale and documents is a recipe for catastrophe.
Simply put, if you get it wrong there, you’ve gotten it wrong. When it comes to the business of land as an investment, there are inherent obstacles that necessitate the assistance of an expert to navigate the landmines.
Despite the frequent hurdles, there is evidence that more people are profiting from land investments on a regular basis.
How To Invest in Real Estate in Nigeria
In Nigeria, the real estate market is currently growing, and people are making millions in it, despite the economic slump.
It may be considered a true money-maker.
The most common ways to invest in real estate are listed below.
Trading in landed properties is one of the most common ways to do this (buy and sell for profit).
Take some time to consider the following information before taking the initial step and investing your money:
Determine whether or not the land has a title and, if so, what type of title it has. Otherwise, you may get dissatisfied with your investment.
Do your homework on genuine ownership, going land rates, the land’s character, topography, and appropriateness.
Take control of the situation and don’t mess around with the paperwork. Keep a detailed account of all expenses associated with the transaction to aid in determining an appropriate selling price.
Before deciding on a selling price, always undertake a valuation and/or research on the value of your house as well as the prevailing rate of similar homes in the area.
This can help you prevent underselling or having your property sit on the market for an extended period of time due to its price.
Purchasing land as an investment makes sense if you have the finances.
As an investor, the main issue you’ll encounter is money. It’s easier to get started if you can finance the company on your own.
If you don’t have the funds to execute it on your own, you might approach the bank or other corporate/individual investors who could be interested in partnering with you.
Be prepared to give up a significant portion of your deal earnings if you use one of these financing options. The disadvantage is that their interest rates might be extremely high, making meeting their loan terms difficult.
Purchase Your Lands from a Reputable Source When it comes to land as an investment, you have the option of purchasing it from the traditional landowners (also known as omo-oniles), a third-party individual, corporation, or the government.
To succeed in land as an investment, my advice is to be aware of the source and make sure it is the proper one.
If you don’t have the cash to buy the land outright, one of the benefits of buying through a third-party corporation is the ability to make a down payment and pay the remainder over time if you don’t have the cash to do so without risking losing your land/investment if you keep your end of the agreement.
When you buy landed properties from omo-oniles, your chances of losing money are substantial, especially if you don’t have the funds to develop them right away.
This is why the majority of people avoid doing business with them. You should seek suggestions from friends or family members while looking for a real estate business to assist you.
Property development is a high-capital-input business. In this situation, lands in desirable locations are purchased and luxury apartments, commercial structures are constructed and then sold at a significant profit margin.
For example, if you spend N300 million to construct terraces in a fantastic location, you could expect to get at least N600 million when you sell it.
When it comes to property development, a suitable location is crucial.
Investing in rental buildings, as well as land ownership, is a time-honored tradition. After purchasing a property, you rent it out to renters.
Basic rent, accounts for the vast bulk of residential property income. Your renters pay a set monthly rent that will rise in line with inflation and demand.
Short lets/Vacation Rentals
In recent years, the demand for home-away-from-home rentals has exploded, as many travelers prefer this alternative to staying in a hotel.
Homeowners can make money by renting out a house or even just a room for a short period of time, especially if the property is in a popular tourist region.
Major Real Estate Mistakes Investors Should Avoid
You wouldn’t want to gamble with an investment that is worth millions, so if you want to invest in real estate, you have to take the right steps so that you don’t make the wrong investment.
Real estate investment mistakes you shouldn’t make:
Getting Started Without a Goal:
The biggest mistake anyone can do is to get into real estate without a certain purpose in mind.
Are you purchasing for your own personal use? Are you purchasing as a secondary source of income? Whatever the reason, you must have a clear objective in mind.
Another common real estate investing blunder is making a purchase without taking environmental considerations into account.
Is there a risk of cultism in the environment? Is it vulnerable to armed robbery attacks and other forms of crime?
Nobody wants to acquire a home that they’ll have to sell later due to threats. Prospective tenants will avoid renting an apartment in such areas.
Every reasonable person wants to stay in a safe and secure environment devoid of threats to life,
Choosing the Wrong Developer
Working with the wrong developer could jeopardize your investment. Because of his greed, a shady developer would choose to use inferior materials, putting your investment at risk in the long term.
Always engage the services of a professional and seasoned developer because he will provide you with expert advise and comply with building regulations.
Lasy year in Onike Area Lagos State, a three storey building under construction, collapsed killing two people. The collapse of the building was as a result of non compliance with building regulations.
The developer was asked to stop with construction by Government, because he was not complying with building regulation but he broke the Government seal and continued with the construction without official authorization.
This resulted to the collapse of the building and death of two people. These losses could have been avoided if a professional developer was in charge of the construction.
Investing In A Bad Location
The value of the property you intend to invest in will be heavily influenced by its location.
For example, you can’t compare the value of a property in Lekki to a similar property in Mushin.
If you want to make a lot of money renting, Lekki is a good option, but you must be prepared to pay the price.
Failure To Make A Physical Presence On A Property
Erecting a building or fencing in Nigerian cities such as Lagos, Abuja, and key state capitals is one approach to demonstrate ownership.
Make sure you don’t leave a property unattended for longer than required.
Establish a presence on a property even if you want to keep it for a long period.
Using Real Estate as a Way to Get Rich Quick
Real estate is not a ponzi scheme. Anyone who claims you that your investment would yield 200 percent interest in a month does not know about real estate investment.
Property grows in value over time. Though appreciation in a few months is feasible.
It is unlikely to quadruple your investment in a month.
Don’t think of your investment as a way to get rich soon. You will definitely yield returns on your investment but you have to be patient.
Failure To Investigate Land Titles
The importance of due diligence cannot be over emphasized. There are several incidents of counterfeit land titles, such as Certificates of Occupancy (C of O), Governor’s Consent, and other vital documents.
While considering the property’s long-term return, be wary of paying for something you can’t independently verify.
If the seller says that the property has a certificate of occupancy, you can investigate the title at the Lagos State Ministry of Land’s Registry Unit in Alausa.
Regardless of how much money you’ve put into the property, if the titles aren’t genuine, the rightful owner will force you out or, if the land belongs to the state, the government will take over.
Not inspecting the property:
Many investors make the severe mistake of not inspecting the property they intend to buy. If you cannot visit the site, ensure you send a trusted relative or friend to go for inspection.
Do not pay for a property on the assumption that the company will fulfill their end of the contract.
Unfortunately, things don’t always work out that way, so make sure you inspect the property you’re thinking about buying before payment.
Also, once you’ve paid, request your property’s allocation and, if possible, begin fencing right away. This step will help you to secure your property.
Another common first-time real estate investment blunder in Lagos is, investing based on emotional reactions and biases.
A client told me of the horrible experience she had six years ago when she was new in real estate business.
She had bought a land worth eight million Naira at Aja, Lagos state because a church member who she perceived as a smart and true Christian, had told her about the land and convinced her that he had done his due diligence and is giving her hundred percent assurance that it was authentic.
She invested based on trust without doing her due diligence and one year after, the true owner of the land surfaced armed with the right title documents.
The matter was taken to court and of course she lost the case.
She lost a whooping eight million naira, wasted her time and money in court for nothing.
If your goal is to invest in real estate that will provide a profit, it’s best to avoid sentiment.
Another example is buying a house in your village that you know will not rise in value in the coming years because a relative told you otherwise.
In conclusion, Land as an investment is one of the few things in life that makes sense if you want a good return. But to succeed in your real estate investments, you have to avoid these mistakes and your investment will bring you great returns..
The key to successful investing is to employ the proper specialist to assist you in your quest for the right piece of land to invest in.
We have the experience and qualifications at Real Estate Guider to meet and satisfy your real estate needs. Contact us right now. 08082023568
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