If
there is any business in Nigeria that is truly lucrative and extremely
profitable, it has to be Real Estate business in Nigeria. Most of the top
billionaires in Nigeria are real estate investors. The business is a money
spinner to the highest level. Real Estate is currently booming in Nigeria and
people are making millions in it. Today, we want to take a closer look at the
business and see how you can invest in this sector of the economy (irrespective
of how much you have) and make serious profit.
One
thing very good about real estate business in Nigeria is that the investment
opportunity is so diverse that there seem to be something for everyone. Anyone
who wish to invest can invest whether he has thousands or billions of naira,
you can even invest without a dime in your pocket. Let us see how it works.
This
is the first article I am writing on real estate business on this website. So,
I will try to highlight some of the best investment opportunities in the
industry, and expand on the topics in the subsequent articles.
Profit
Potential in Real Estate Business
Before
we proceed, we want to look at the profit potential in real estate business in
Nigeria. I bought a plot of land in Ikorodu area of Lagos State in 2011 where I
had wanted to develop for small hotel. I paid ₦500,000 for the land excluding
some minor egunje to the boys.
In
2013, I changed my mind and decided to sell it. When I asked the estate agents
how much property was going in that area, they told me the current price as at
then was two million naira. And that my own which is very close to the main
road will go for between 2.5 to 3 million naira. If I had bought five plots
that was offered to me for 2.5 million then, I would have made ₦10,000,000 from
that single transaction!
Just
like that, 2 million to 2.5 million gain in less than two years for a green
horn like me who was not in anyway into real estate investment. Then imagine
what the professionals who knows the ins and outs in the business must be
making. I also know a petty medicine seller who is now a multi millionaire
through estate investment he started few years ago. And he started with almost
zero capital.
I
know how some of the millionaires in the industry started. Some of them started
as small real estate agents in a kiosk. Today, they control the finest estates
in Lagos, Abuja and other major cities in Nigeria.
Investment
Opportunities in Real Estate
Investment
opportunities abounds in real estate. Start with what you have. As you grow in
the business, you can expand your portfolio. Or you can start big straight away
if you have access to capital. In this article, I will only deal with real
estate categories that are peculiar to Nigeria. Suffice to say this article is
made specially for beginner real estate entrepreneurs. Here are some of the
areas you can invest and make your own money without tears.
1.
Land Flipping
This
means buying of land and quickly reselling it for profit. This is one of the
smartest investment in the industry and requires no effort whatsoever. Just
your money and knowledge and you are good to go. You will need substantial
amount if you want to make hundreds of millions but you can start small by
buying just one plot and grow to buying tens of plots and acres of lands and
keep selling all year round.
2.
Open Space Leasing
This
works in a simple and unique way. Buy a property in a good location and lease
it out for makeshift use. You can lease it to churches or business that wants
to develop a makeshift outlet such as car wash and mechanics. They will be paying
you monthly rantage while the property still appreciates for future sell. It is
like borrowing money for someone and get paid double interest and still get
your money back.
3.
Real Estate Agency
This
one is the simplest and easiest of them all. It is not investment per say but
service rendering. How it works? Go round and look for properties to let and
for sale, advertise your service and help secure clients for the property
owners, you will be paid percentage as commission base on the amount the property
is sold or rented. You can start with little or no money and if you are smart
enough, you will grow to become a giant realtor.
4.
Property Development
This
is where the big guys in the industry are doing their stuffs. They acquire
properties in nice locations, develop it into luxury apartments, commercial
structures, etc and sell at a very high profit margin. If you spend N200
million to develop a property, be sure you are going to sell for N400million.
5.
House/Office Rent
Build
a house and put it up for rent, get paid all year for a life time. That is
exactly how this work but there is much more to that than I just stated, watch
out for detailed articles on this soon.
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