Let’s talk real estate!
Nigeria’s real estate sector is a magnet for investors, both local and international.
Investment choices in Nigeria are infinite and for a country that has been struggling with its worst GDP growth in recent times, it is important to rely on secure investment choices.
Real estate is one sector where assets never fail to increase in value
This comprehensive guide will unlock everything you need to know: from property types to investment benefits.
Let’s dive into the exciting world of Nigerian real estate!
For more insight into real estate trends and practices, check out this guide 2024 Real Estate Outlook
What is Real Estate?
The term “real estate” can be used to refer to both buildings and land.
Still, a real estate business involves the purchase, leasing, or selling of landed properties and it is one of the oldest and most lucrative businesses in the world.
Real Estate in Nigeria
Over the years, Nigerians have come to trust real estate as a secure and reliable way to hold assets.
Nigerians view land or properties as a way to save for rainy days.
It is also seen as an asset to pass down to your generation and more importantly, it is seen as a business to earn lucratively from.
It is no secret that people will always need somewhere to live or work, which is why the real estate sector is one of the driving forces of our current economy as it ranks as the 5th biggest contributor to our GDP
What Are The Types of Real Estate?
Real estate can also be divided into 4 types:
- Residential real estate
- Commercial real estate
- Industrial real estate
- Raw Land
Residential real estate
Residential properties are homes or land that people purchase or rent primarily to live in them such as apartments, condos, townhouses, cabins, etc.
Commercial real estate
These are properties used by business entities to carry out their commercial activities such as office buildings, restaurants, hotels, grocery stores, shopping complexes, etc.
Industrial real estate
These are properties used primarily for production, manufacturing, distribution, and storage such as warehouses, factories, etc.
Raw Land
This can be referred to as property that is undeveloped and has no building erected on it.
They can be used for agricultural purposes such as farming, gardening, timber cultivation, etc or they can be left vacant in their natural state to be developed later in the future.
Benefits of Investing in Nigerian Real Estate
Investing in Nigerian real estate offers a multitude of advantages:
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Steady Appreciation: Nigerian property values have steadily grown, making them a good investment.
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Rental Income: Owning rental properties provides a steady stream of income through monthly rents.
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Tangible Asset: Real estate is a tangible asset with a lower risk of depreciation compared to some other investment options.
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Diversification: Real estate adds valuable diversification to your investment portfolio, mitigating risk.
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Hedge Against Inflation: Inflation can raise property values, shielding your investment.
Who is a Real Estate Investor?
A Real estate investor invests their resources in developing properties and purchasing land or buildings to make a profit sometime in the future when their property appreciates.
Real Estate Business Opportunities in Nigeria
There are several ways to earn an income in the real estate industry.
These are the common ones in Nigeria:
1. Property Development
Property development is a major source of income for top real estate companies.
They can coordinate all the various resources, skills, and investments needed to execute the development of a property.
Developers work with various professionals to execute a project such as architects, engineers, surveyors, inspectors, contractors, lawyers, accountants, agents, etc
Their larger capacity enables them to handle projects that allow them to convert a plot of land into a block of luxurious apartments or in the case of Mixta Africa, take hectares of land and develop it into a luxury golf estate like Lakowe Lakes.
2. Build to lease
A lot of real estate investors simply purchase a property and rent it out for commercial or residential purposes.
This can range from Airbnb, short lets, studio rentals, office space rentals, warehouse rentals, apartment leases, etc.
The DUO rent-to-own scheme offers a new innovative way to own your property and rent it out.
As more and more people become investors, rental income is the most common form of income in real estate.
3. Real estate agents
In real estate, this is a less capital-intensive method of generating revenue.
However, you need to have access to real estate investors or potential clients and you can easily earn an income through commission from when they purchase or rent the property.
Mixta Africa offers 2 ways to earn an income through real estate:
- Through their refer and earn program you simply refer a potential client and get paid when the client purchases a property
- By becoming a registered 3rd party agent with them.
Career Opportunities in Real Estate in Nigeria
Common careers in real estate include Architect, Surveyor, Salesperson, Marketing manager, Business development manager, Project manager, Analyst, Realtor, etc.
Tips for Investing in Real Estate
If you’re looking to invest in real estate in Nigeria, here are some important tips to know:
- Be familiar with the essential documents needed.
- Work with a reputable real estate company that has a proven track record.
- Investment returns are higher in areas with potential for development in the near future.
- Check that the property you are considering for purchase isn’t located in an environmentally toxic area.
- Make sure your location has great infrastructure to prevent flood damage to your assets.
- Consider mortgage products to finance your purchase.
- Off-plan properties tend to be cheaper than when they are already built.
- You can easily invest in real estate in Nigeria from the diaspora through Mixta Vest.
- Consider alternative ways to finance your property such as a rent-to-own scheme.
- Seek trusted legal counsel during your real estate transaction.
