Determinants of a Successful Real Estate Investment in Nigeria: A Focus on Lagos Property Market.

 

 

INTRODUCTION:

Real Estate investments are physical assets with real returns. It has been proven for thousands of years as one of the safest and most consistent investment vehicles in the world today when properly ventured into. As long as needs for places to live, work, play, e.t.c. persists, there would forever be people getting paid for meeting these needs.

Lagos has always been a choice investment location for numerous real estate investors. A lot has been said and publicised on investment in the Lagos real estate market as security for hard-earned resources, e.t.c. However, many seem not to have accomplished these highly anticipated goals. Aside satisfying land verification, these unaccomplishments are because they are not aware of the imperative factors to consider, prior to making that very significant decision. The decision whose impact would either make or mar the investors’ expectations.

This article would briefly show some of these imperative factors that must be considered and examined in the face of numerous available options in real estate investment to enable investors finally achieve their dearly anticipated goal(s).

 

 

1.0 IDENTIFYING YOUR INVESTMENT PURPOSE:

In Lagos many prospective investors tend to be distracted by the huge variety of available opportunities in the market, thereby lose focus on what they really want. As an investor, the purpose of your intended real estate investment needs to be identified, defined and established to enable its actualization within a projected period. It could fall within the category of long, mid or short-term investment purpose. Within which are of various specifics as you desire.

For example, It could be an investment for long-term purpose where the investor intends to acquire a property as a legacy to pass on to future generations, among other secondary reasons, or a mid-term purpose where the investor intends to hold a property for leverage or to wait a while till it appreciates before disposal, e.t.c.

 


2.0 YIELD  RATE:

This is the annual percentage rate of return on your capital investment, which varies from one location to another, subject to many determining factors, considering the fact that your investment in one or more properties is an integral part of the macro real estate market. It is wrongly perceived that high yielding real estate investments are only domiciled in the Lagos highbrow areas, but the truth is that, it takes discerning expert minds to cross-examine your available financial resources with realistic market data analysis, among others to depict true high yield real estate investments. There are many unpopular locations in Lagos with very impressive latent values. These untapped opportunities are lying fallow, yet to be explored. Some of these property investment options need to be well considered before decision making

 


3.0 ASCERTAINING THE HIGHEST AND BEST USE:

This is a technical exercise that requires expert assessment to arrive at the most profitable use of the available property options, having considered many other factors. In Lagos, due to the existence of many business ventures coupled with dense population in every location, a typical investor thinks profitability is inevitable. To be very realistic, that is mostly far from the truth, because most investors delve into investments without having these due diligence carried out, hence they pay heavily with huge capital losses. Engaging an Estate Surveyor and Valuer (ESV) to carry out a feasibility and viability appraisal to determine the best use, and parting with a fee, would have been another step to prevent such huge losses.  

 


 

4.0 VALUING THE INTENDED REAL ESTATE INVESTMENT:

This is the art and science of determining the monetary worth of the available property options, and some other information on your proposed property investment to reveal whether the price of the investment is worth venturing into or not. The absence of this factor could be disastrous as the investor is prone to be vulnerable to make an uninformed decision. This ought to be carried out by an Estate Surveyor and Valuer (ESV), whose expert opinion of value guides you in your negotiation with proof of the true worth. Even when all seems green, it helps to reveal an opportunity to take the best position.

 


 

5.0 DECISION MAKING:

As an investor, it is highly encouraged that you take advice from an Estate Surveyor and Valuer (the only competent and accredited professional in real estate investment appraisal). Their advice is in your best interest, as they have considered your purpose in line with your available resources and opportunities, and would advice based on these factors to help achieve your expected goal(s).

 

 


6.0 MANAGING YOUR REAL ESTATE INVESTMENT:

Making the right decision in your real estate investment choice is one step in the right direction towards achieving your desired goal(s), but getting the technicality of how it functions right is another huge step closer to that dearly desired achievement. This most often is too rigorous for the investor to handle, because they do not know the nitty-gritty involved, hence consistently losing income. Having successfully carried out all the above stated, and so as not to ruin all the positive efforts made so far, entrusting that investment in the hand of a professional Estate Surveyor and Valuer is your best bet, as they are also the only accredited professionals with the expert knowledge and training in property management, even in facilities management. They have systems in place to protect your investment from bad tenants, fundamental and complex challenges that could wipe out your returns. Engaging them as property and facilities manager of your real estate investment, reduces risk and increases your returns, and you are automatically positioned for not just good but the possible best results. He engages in the day to day running of the investment, ensures it functions smoothly and that there is an uninterrupted inflow of income as and when due, except in a force majeur. You can always be rest assured when your property is in the hand of an Estate Surveyor and Valuer, as you stand to enjoy timely remittance of income, periodic performance reporting, high efficiency, investment appreciation among other benefits, provided that you yield to his professional advice. He is trained to explore all possible techniques to improve on your investment performance from time to time, and would not rest until your goals are achieved, because your success is equally his success.

 

 

CONCLUSION:

Generally, many prospective investors nurture the ideology of investing in the Lagos real estate market, because of the numerous potentials it holds. But the real fact is that, it is imperative that the intended purpose of investment needs to be a perfect match with the property choice, with very strong consideration of the available financial resources, and the factors explained above.

To establish the perfect matchmaking, the expert judgement of an Estate Surveyor and Valuer, is extremely inevitable, even to the investment management stage, if the investor must achieve the desired goal(s).

 

 

 

 









 

 

 

 

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 ABOUT THE AUTHOR:

Temitayo O. Nuga is an astute real estate expert, an Alumnus of the prestigious Federal University of Technology Akure (FUTA) where he bagged his bachelor's degree with honours in Estate Management. He is a professional member of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), also a Certified Project Manager by the International Project Management Professionals. So far, he has amassed ten years of tremendous and rich practical experience in the Nigerian real estate sector, which he considers as just the beginning.

Contact: tayonuga@gmail.com

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