Are you new into the real estate business and you are not sure of eye openers to look out for before purchasing any real estate property? We’ve got all you need on this page as we will be talking about to 7 factors to consider before investing in real estate property in Nigeria.
This surely will be all you need to get yourself fully stacked when you finally join real estate full time or even part time as an added side hustle.
Information on this page will be short and straight to enable you find just what you are looking for in time.
Without wasting much time, let’s get started in understanding real estate.
Understanding Real Estate Business in Nigeria and Beyond
Real estate is simple a piece of land including to the permanent structure attached to it. Permanent structure here could be natural and/or man-made structure provided it is inclusive to the land (property). Example of real estate properties include the likes of; water, trees, mineral resources, fences, homes, bridges and building constructions.
Real estate is a permanent form of property and it differs from personal properties like; jewelries, cars and machines.
Investing in real estate means acquiring some real estate properties and using them to boost your ROI as time goes by. We have a detailed guide on our blog on how to start a profitable real estate business as well as easy ways to making money from real estate.
You might want to check them out if you haven’t.
Well, below are our key takeaways on factors to look out for before buying any property in the real estate field. This surely, will help you in reducing the high rate of risk of loss of fund in real estate.
Top 7 Factors to Consider Before Investing in Real Estate
Location(s) of property in real estate is the first thing to look out for before going ahead investing (acquiring) your money any real estate property, be it land, building or garden.
For instance, let’s say you have a plan for short time investment in real estate and you go ahead purchasing a piece of land in a very far distant land in the jungle. When do you think your invested money can roll over?
The chances of getting a better offer in short time investment here is low which might further result to a reduce in expected profit returns which surely is not a dream of any investor.
Property Evaluation Checks
Property evaluation in real estate deals with the general concept and ideas on what is expected in that particular property mostly related to money. Property evaluation checks can help you as a real estate investor know the right property to go for and also the right time to dive into the opportunity.
Basically, there are three key notes to look out for here and surely, they should help in opening your eye to see and know the right property to buy.
- Sales Comparison Approach (SCA): The Sales Comparison Checks (SCA) is all about comparing other properties which are similar in nature and scope to the property you plan on investing. This will help you in knowing what to expect in the future of the property you want to invest in.
- Cost Approach: Cost approach has to do with cost determining of the property you want to invest in. The SCA method mentioned above can also help in determining the worth of a property which makes the SCA method very crucial in real estate business.
- Income Approach: This is all about the expected income approach within a stipulated period. Proper evaluation of properties can help you as a real estate investor knows what is expected to come in returns as profit from your investment.
The above property evaluation checks are broad so you might want study them more to fully understand the concepts.
Neighboring Environment Checks
Surrounding checks or neighboring environmental checks in real estate is yet another key factor to consider before investing in real estate property.
What would you think of, investing in a Restaurant which is located 100km from township or residential environment.
The returns won’t be that great or do you think majority of people will travel over 90km just to have a meal?
Well, that’s just an example so as to bring about full understanding to why studying environment is very crucial for real estate investors.
Security Checks Consideration
Security is everything. Checking on security background before investing in any real estate property can be a very important option for your career as a real estate investor. This is important if you are a smart investor who is looking at getting high returns in his invested fund.
Checkout this fact;
Are you aware that real estate properties e.g housing is more cheaper in North Eastern part of Nigeria where there is high rate of terrorism activities?
Investing in real estate in a place like that is not a bad idea though but returns will be low compared to when you invest in areas which are highly security cautious. This is because people will like to live in area with tight security over area where security is not stable.
Hoping you understood to the main idea behind this point on our listing of 7 factors to consider before investing in real estate properties
What are my Plans on this Property
Planning has to do with extensive setup of the future which is yet to come. Planning will help you in knowing the best option for the future of property you plan on investing.
What would you think of someone investing on property he have no strategic future plan on. Sure the result is on a high chance of being disastrous which is why we advise real estate investors have future planning about a property before investing their money as that will surely limit the rate of loss.
How do I Monetize
This is part of planning but in a different dimension. Knowing how you will monetize a property does not only assist you in knowing how to make money with the said property instead, it also open you eye to see the correct worth of the particular property.
Knowing this will help you in identifying lucrative money making opportunities in Nigerian real estate business field
Alarming Rate Signals and Growth Potential
Are you aware that real estate property close to urbanized environment tends to yield more of revenue to the owners? Surely, this is why you see buying properties in Lagos and Abuja are far more expensive than buying properties in other parts of the country.
Now here is the eye opener.
As a real estate investor, it is wise to identity growth potentials and urbanization extensions before anyone else. This will sure help you in acquiring properties at cheaper rate and within few months or years; you flip or rent and keep enjoying high commission for a lifetime.
This is the end section of this article on top “7 factors to consider before investing in real estate property in Nigeria”. This will sure help you in understanding the risk and opportunities involved real estate business for starters and will also help in scaling the income of existing real estate investors.
We have articles about Real Estate which will be of benefit to you on our blog. Try checking them out.
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