There is a lot of chatter about real estate investing in Nigeria. Everyone says it is the safest and easiest way to make big returns in Nigeria. There are constant claims that you can strike it rich very quickly if you just buy land or a property then sell it for a profit.
Can this happen? Sure it is possible, but is it guaranteed? Or, is it commonplace? We are going to get to the bottom of this, and list the 7 reasons for investing in Nigerian Real Estate.
Why Invest Real Estate?
Real estate has and will always be a preferred vehicle for investment. The main reason is that it is tangible. We can touch it, sleep in it, and control it. It is not like investing in the stock market, where you can not really touch your investment, and you are not in control.
This is why the majority of wealthy individuals choose real estate as a means to invest, store and grow their wealth.
7 Reasons to Invest in Nigerian Real Estate
(1) Real Estate is Safer
While no investment is completely risk-free, real estate tends to be safer since it can serve as collateral, and it is usually in high demand (especially in Nigeria). If you buy property in a good location, you are likely able to make money when you re-sell or if you rent it out. Investing in Nigerian real estate is safer than other opportunities because the housing market tends to be stable and predictable.
(2) Real Estate is Tangible
You can see it, you can feel it and if all fails, you can live in it. If you invest in stocks, and the stock collapses you are left with nothing. A big reason people like real estate is that it is simple to understand and you don’t have to be an expert. Everyone can grasp the basic concept of real estate investing in Nigeria. You buy property or piece of land, which you will have seen prior to purchase, you know where it is, you have the key. It is yours. This just makes sense to most people.
(3) Real Estate Appreciates in Value
Real estate more often than not appreciates in value or it becomes worth more as the years go by. So if you buy a property for 50,000,000 in two or three years it may be worth 80,000,000. There is a lot that determines appreciation, such as location, condition and market forces (supply and demand). In general though, housing tends to go up in value and not down. Do not expect all real estate to jump in value immediately as some sales sharks will tell you. It may go up, or it may not. You will just have to wait and see.
(4) Cash Flow
Cash is king. Investing in real estate in Nigeria allows you the ability to earn monthly/yearly cash flow from your investment. Your tenants will pay their rent and that money goes into your pocket. In Nigeria, it is common for renters to pay a full year or more in advance, so you may end up with a large sum of money to use for more investing. Cash flow is a major reason investors like real estate, not many investments give you this kind of return.
(5) You Can Pass Real Estate to your Children
Real estate can give solid returns for multiple generations. When you pass on, you can give your property to your wife or kids so they can also benefit from cash flow and appreciation. It can create generational wealth. Set your children and grandchildren up for success, and in the process teach them about real estate and how it can impact wealth building. This is a great reason to invest in real estate in Nigeria.
(6) Technology is Making It Easier
The internet age has transformed real estate investing. Now you have access to thousands of properties at your fingertips when you look online. There are several apps that make it easy to search for a property and to see pictures and details of the place. This saves you time from having to travel all over to different properties. You can make your selections online, then set up tours with your agent.
(7) Short Term Rental Business
Airbnb and other short term rental companies are making waves in real estate world. This has given the average joe the opportunity to jump into real estate investing in Nigeria. These business allow you to rent your property for short periods of time (like a hotel) and make profit throughout the year. This can accelerate your earnings and elevate your investing game. This is becoming popular in Nigeria and is our favourite way to invest in real estate.
Real Estate Makes Sense
Those are just 7 reasons to invest in real estate in Nigeria, but there are more. So do your research and get prepared. Be on the look out for our investing series which will give great tips for real estate investing.
Real estate has the ability to transform and grow your wealth for years to come. It is relatively safe, easy to understand, and can give you solid cash returns. It is not foolproof though. Don’t be tricked by the thousands of so-called real estate “gurus” that will ask for your money and promise you that you will be a millionaire overnight. Be smart, and remember this is a marathon and not a sprint. Invest wisely.