Real Estate Business in Nigeria
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 investment choices that are secure and real estate is one sector that never fails to appreciate.
The real estate industry has performed well in the Nigerian economy, especially in property investment. It has become a way of life; people use real estate as a place to live, it is the ultimate asset and gives you a great return.
What is Real Estate?
The term “real estate” can be used to refer to both buildings and land, but 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.
What Are The Types of Real Estate?
Real estate can also be divided into 5 categories:
- Residential real estate
- Commercial real estate
- Industrial real estate
- Raw Land
Residential real estate: These 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
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 farms, vineyards, timberland, gardens, etc or they can be left vacant in their natural state to be developed later in the future.
Real Estate in Nigeria
Over the years, Nigerians have come to trust real estate as a secure and reliable way to hold assets. Land or properties are viewed by Nigerians as a way to save for the future or 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
Who is a Real Estate Investor?
A real estate investor is someone who invests their resources in developing properties and purchasing land or buildings with the goal of making a profit sometime in the future when their property appreciates in value.
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:
- Property Development:
Property development is a major source of income for top real estate companies. They have the capacity to 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.
- 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.
- 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 where you simply refer a potential client and you get paid when the client purchases a property
- By becoming a registered 3rd party agent with them.
Career Opportunities in Real Estate
Common careers in real estate include Architect, Surveyor, Salesperson, Marketing manager, Business development manager, Project manager, Analyst, Realtor, etc. Read our article on real estate investment trust in Nigeria.
Tips for Investing in Real Estate
- 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