How to start real estate business in Nigeria? How profitable is it? If you are interested in these questions, then you have chosen the right article.
Nigeria is a member of the Economic community of West African countries (ECOWAS), representing 15 West African countries. It has a considerable domestic market, which needs technology, machinery, equipment for mining and processing industry, the availability of fossil resources to create attractiveness for business.
Business in Nigeria: main features to bear in mind
- Huge consumer market consists of 180 million people;
- The abundance of natural resources and minerals stimulates the presence of international companies, that is why there is a demand for the goods and services of a high quality;
- Residents of Nigeria are people with entrepreneurial spirit and are focused on doing business;
Real estate business in Nigeria
Today, it is a widely known fact that the capital of Nigeria, Abuja, is very attractive from the point of view of real estate investment.
In recent years, the investment potential of Nigeria has become more and more attractive, with the growth of business activity. Therefore, the demand for real estate will only continue to increase.
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How to start real estate business in Nigeria?
Most crucial steps to start real estate business:
– Conduct certain research of Nigeria market.
This implies your knowledge of laws of Nigeria real estate market functioning. All the factors, including major risks, expenses for setting up real estate business, new tendencies, guidelines which take place in real estate business.
– Work out best business plan.
Such a step means that you need to write a list of things you are intended to do to achieve success in real estate business in Nigeria. In addition, if it is written correctly, you may use it as an attraction way for future investors.
– Make your real estate business legal.
You just need to register your business to avoid further problems and possible fines. Turn to Corporate Affairs Commission so as to sign and get all the documents.
– Provide yourself with office and workers.
This means that you need to hire the best employees and rent some not so expensive office.
– Seek for investment.
You may opt for a loan in a bank or try to attract foreign investors.
– Provide 24/7 functioning of your web-site.
– Make useful advertising.
Your business is in your hands
Important! Take into account this information
- You should always be on the lookout. It is not advisable to deal with the companies if you know absolutely nothing about their reputation.
- Sometimes you may come across ‘tempting’ offers from Nigerian companies that attract you with exorbitant profit from the incredibly low investment. Life teaches us that greed and quality are two completely incompatible things.
- You need to give preference to the companies that have good reputation, and experience in the sphere of real estate business in Nigeria.
- At the property market, there are not any seasonal sales. Investments can never rely on fashion. The main things here are reliability, reputation, and presence.
You need to follow some very important tips:
– Do not invest in foundation pits
Each novice investor knows that the object at the initial stage of construction has the smallest price, and by the time of putting apartments into service, the price can rise by 30-40%. At the time of crisis, it is not advised to invest money in foundation pits: buying at a higher stage of readiness will help you avoid getting unfinished apartments and loss of a significant part of income because of inflation.
The best time to invest your money is the stage of construction of exterior walls when the building frame is ready. According to the experts, if you invest money in an object at the initial stage, return on the investment can be reduced due to the slowdown in price growth or even its freeze.
In fact, investing at a more advanced stage of readiness, not in one, but in several objects, in turn, will bring you less income. A person is investing money during a more advanced stage of construction and faster implements an object passing to the new one. The yield from the resale of each project may be lower if you buy it not at the stage of excavation, but later. The total profit for a certain period of time may be the same, the investor is not working with one object all the time, but with two or three consistently.
– Learn secondary market
To see how much you can earn on
This is especially important if you follow tip # 1: when the apartment is bought at a high stage of construction, it is important to understand whether this new building will give a considerable profit later.
– Rely on infrastructure
In order to earn more, you may rely on the development of infrastructure, therefore, you should study the plans for the construction of kindergartens and schools or large shopping centers. You need to look at forecasts for two or three years in advance, but remember that all projects can be implemented later because of the crisis.
– Earn on rent
If the idea of constantly selling and buying real estate is not the one you were dreaming about, you need to look for those objects that are cheaper to be granted on leases, such as studios or apartments.
In a crisis, this type of investment can be particularly attractive. Many people have postponed the purchase of apartments “until better times” and continue to rent apartments.
If you have a lot of money, you can invest in hotels, where instead of rooms are separate flats.
– Trust big players
It is especially important to consider the information about the developer. You should always know whom you’re going to take your money.
Experts believe that small developers can leave the market, and medium — can group into larger companies.
In order not to make a wrong choice, you need to study previous projects of the developer carefully, paying attention to deadlines, whether they are the same as were declared. You should read news about the company paying attention to cases of court claims for bankruptcy.
The Common Law of Business Balance adopted by John Ruskin hasn’t gained popularity in the last few decades. However, it is a general law, and it applies to all the principles of doing business in the international market. It says: “When you pay too much you lose a little; when you pay too little you often lose everything because the thing you bought was too cheap for the realization of the original goal.” The basic law of business balance prohibits paying a little and getting a wrong move, but if you do this step, you have to be willing to take the risk to be left with nothing. No guts, no glory!
How profitable is real estate business in Nigeria?
You need to know one important thing – if you are experienced in this sphere or at least interested in this field, this way real estate business in Nigeria will be extremely profitable.
There is a point in studying the most profitable kinds of real estate business:
– Land flipping
This means that you buy some land from an owner who isn’t interested in real estate business, and then you sell it for the much bigger price, thus making the profit. Such business opportunity doesn’t require any serious efforts. The only things you need are money, some knowledge, and experience in the following sphere.
– Property development
Such type of real estate business implies buying some property and then developing it in such a way that you may sell it for a better price. You only need to acquire real estate in a pretty place and make it look much more attractive than it was before.
– Open Space Leasing
First, you need to buy some property in a nice place, then lease it to some church or business. This way, you may take rent from them at the same time having an opportunity to sell this land. It means that you will not only get your money but also you will acquire some double interest.
– Opening real estate agency
This option is believed to be one of the simplest. The job implies helping people to find suitable for them property for a reward – a kind of percentage or commission. If you aren’t experienced in this sphere, it is advised not to demand high payment of your services at the ver beginning, but later when you are in this business for some years, you may earn a lot of money.
– House or office rent
You may buy some property and then offer it for further renting or you can build a house on your own. Such industry will be always profitable due to the fact that population in Nigeria is constantly growing.
Hope, you have read the article carefully and have found something useful. The listed opportunities and business ideas will help you to start real estate business and make it really profitable and rewarding. You always should remember that any kind of business requires risk!
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