Real Estate in Nigeria, like in many parts of the world is an ever-increasing-in-value investment that must not be slept on! Many people are oblivious of this. A few know about this basic fact and have been drinking from its rich and profitable stream.
Today, many people are very skeptical about venturing into real estate investment due to a number of factors. However, Expert Properties expressly states that “real estate has many advantages over investing in stocks, bonds or mutual funds.”
According to Millionacres, there are several ways to invest in real estate, each with different capital requirements, risk levels, and investment dynamics. Let’s dive in!
1. Buy a rental Property
This is one sure way of making monthly or yearly income in Nigeria. It is not enough to buy a home and that’s the end. This is a much wiser alternative to buying a house, especially when there is not enough money to maintain it.
The trick is this, buy from areas with high rent and lower tax payment than the rent. An example is buying a property in the Island part of Lagos Nigeria, such as Lekki, Victoria Island, Ikoyi and the like.
However, there are two downsides to owning such a property, one of which is paying a lot of cash upfront before purchase and after (when it comes to maintenance).
The other aspect is having to deal with tenants. If you are new to this, you will come across different tenants, which you must screen. Some would wear you out with stories that touch others may not. If. However, you are the type that yields to people easily, you may want to outsource these aspects to a property management service.
Thus, depending on who you partner with, rental properties are really lucrative and can serve as a form of semi-passive income.
2. Practice house hacking
You may be wondering, what is house hacking. Wonder no more! House hacking is a real estate investing strategy, which according to Fortune Builders, helps investors earn rental income by renting out their primary residence.
How is this done practically you ask? Now, let’s say you have a duplex, you can rent out one of the units while you stay in the other unit.
This is an easy way of making cool cash you don’t want to sleep on. It reduces housing cost, gives you flexible options, helps you learn how to be both a landlord and property manager easily and helps you grow your wealth passively.
3. Try house Flipping
Perhaps, you’ve also not heard of house flipping. Let’s assume you have.
House flipping is a real estate investing strategy of buying a property. It involves applying some fixes to an old property and putting it back on the market. When done right, house flipping can be very profitable. One tested and trusted method to house flipping success, is applying the 70% rule.
This rule according to Investopedia, states that an investor should pay no more than 70% of the ARV (after repair value) of a property minus the repairs needed.
4. Build a new home on spec
This is another way of investing in real estate in Nigeria. A spec home is one that is built under speculation that a potential buyer would make a purchase.
Many agents and real estate companies in Nigeria are into this. They work with developers to build several types of homes, most of which are in demand and then put it up for sale. Most times, such homes are fully furnished for interested wealthy buyers who do not want to go through the stress of buying home appliances and properties.