All About Real estate investment in Nigeria
Even if you're just eager to know all about real estate investment in Nigeria, or you want to really invest in real estate, you'll find this article very useful because it contains the basics of what real estate investment is all about. Therefore read carefully without skipping any word, for better understanding. Alright?
Investment in real estate can be very beneficial to you in on the long run. If done wisely, it will generate lucrative returns.
What Is Real Estate Investing?
Real estate investing refers to the purchase of property as an investment to generate income rather than using it as a primary residence. In simple terms, it can be understood as any land, building, infrastructure and other tangible property which is usually immovable but transferable through documentation.
Some of the examples of real estate are a house, office building, agricultural land, commercial plot, etc. It is considered to be a secured form of investment.
What Are The Characteristics Of Real Estate?
Land: Any vacant land where activities like ranching or farming take place is also a form of real estate.
Retail Space: These properties are used as showrooms, restaurants, shopping malls, retail stores, etc. either individual units or multiple units located in the prime location like your shop.
Residential Real Estate: The real estate which consists of home, i.e., single, duplex, triplex, township, bungalow etc. used for residential purpose. Whether it is a newly constructed property or a house to be resold by the owner example is, the house you're living in.
Industrial Real Estate: A large scale property utilized to build factories, manufacturing units, warehouses, distribution centres, etc. are categorized under industrial real estate. Just like some of that factories and companies you see around your home or place of work.
Commercial Real Estate: The properties or office buildings such as a complex, are parted into multiple small units. These are rented out or used to run various businesses. Therefore, they are known as commercial real estate.
I believe you're understanding this?
What Are The Advantages Of Investing Into Real Estate?
Fix and Flip Properties: You must have seen some residential properties (Houses) which are in a poorly maintained area and are available at a low price are termed as the fix and flip properties.
These properties, when purchased, the buyers involved in renovating and repairs of the properties does the the repairs, and sells at a higher price.
Tangible: Real estate or properties are one of those investments which have a physical existence and can be touched and seen. It's not like Bitcoin or Forex that Can't be touched or seen physically.
Immune to Inflation: The best part is that When economic inflation creates a negative impact on the value of other investments, investing in real estate is a fruitful option. It is the only investment which results in value appraisal in adverse situations.
Value Enhancement: Investing in properties can provide dual benefit to the investors. On the one hand, real estate generates rental income, and on the other hand, its value keeps on increasing in the long run.
Low Liquidity: One of the essential features of real estate is that it is a capital asset.
Therefore, it cannot be frequently bought or sold like stocks or equity.
Allows Use of Leverage: The financial institutions (Banks Or Angel Investors) are attracted towards funding for real estate because of its real or physical existence.
Universally Acceptable as Collateral: Financing the properties by taking them as collateral is very common among the banks and other financial institutions.
Uncertain Maturity Period: Real estate investment does not have any fixed maturity period like in other investments such as fixed deposits and bonds. It is the owner who decides whether to hold the property or sell it.
Needs Management: Real estate investment is buying a physical asset which involves the expenditure on its maintenance. The investor also needs to manage the source of income so generated.
Profitable Even During Recession: Real estate investments have been considered as one of the safest investments. If done wisely, they yield profit or generate income even at the time of recession.
Ways Of Making Money In Real Estate In Nigeria
Appreciation of Property Value: Usually, the value of property keeps on increasing even in the situation of inflation in the economy, therefore investing in real estate is a wise decision. You can enjoy this benefit when you own a land
Rental Income: Renting out premises, whether residential or commercial, is always a good idea for generating a consistent passive income in the long run.
You Can Earn By Commission: The real estate management companies, agents or brokers can make money in the form of commission by facilitating the exchange of property among the buyers and the sellers.
Why Should You Invest Into Real Estate?
Stable Income: It can be seen as the most significant source of generating passive income. The investors can rent out their property to ensure regular and steady cash inflow.
Control Over You Investment: A real estate investor is free to make his or her own decision, similar to running any other business entity. In short, the investor is his or her boss.
Financial Security: As we know that putting money in real estate is a long term investment. The investor has the possession of a physical asset, hence providing financial security to the person.
Value Appreciation: Real estate investment is the purchase of property which encounters capital appreciation in the long run.
Disadvantage Of Investing Into Real Estate In Nigeria
If not done wisely, real estate investment may even lead to poor returns or depreciation of the investment value or worst loosing your properties to 419 people in Nigeria.
Lack of Knowledge: Before investing in real estate, one must have ample knowledge and information about the project he or she is planning to spend in. Most of the investors fail to analyze the right type of investment or potential of the property and are unable to generate good returns on their sum.
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Conclusion
Therefore if you're new in this business you need the help of an expert to guild you. Feel free to chat with me on WhatsApp if you have more questions to ask me. Don't forget to share this article.
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