HOW NIGERIAN REAL ESTATE MAKE MONEY
HOW DO NIGERIAN REAL ESTATE MAKE MONEY.
Real estate, I would say is one of the most secured businesses in the world, though in some part of the world it takes time for return on investment. That is not the same for Nigeria. Some would say Oil and gas is the most profitable business in Nigeria but I’d beg to differ. In my opinion, real estate remains the best and most profitable and secured business in Nigeria.
My reasons are not far-fetched and I will take a little time to state them.
- Unlike oil and gas sector that is encumbered by a lot of government policies and regulation bottlenecks, same cannot be said about Real estate. Of course there are government requirements to float a high scale real estate business in Nigeria but it is not as hard to meet and financially huge like that of Oil and gas.
- There is fair in Nigeria real estate business but that is not the same for oil and gas business. Oil and gas sector in Nigeria is mostly controlled by a cabal and if one does not have the right contact and connections, scaling and profitability will become an uphill task. In most cases it could take 10 years or more for an investor to have return on investment. This is not the case for real estate business which does not come with these baggage and guarantees quick profit.
- Competition. In Nigeria, the business that comes to the mind of almost every individual with good sum of money is Oil and gas; running a filling station business. In fact filling stations have become so common that there are more than 10 filling stations in most major streets in Nigeria. Real estate business does not have this level of competition but rather, I would say that real estate need is yet to be filled in Nigeria and the need keeps growing by the day because of the increasing population
Wow, sorry we digressed again on the topic, but never mind we will deal with this topic with more analysis in the future, for now let’s look at how Nigerian real estate make money which is the subject at hand.
There are actually more than 15 ways to make money in Real estate in Nigeria but I’m going to focus on the major ones and summarize it in 5 ways…so here goes…
- Buying, renovating and flipping houses
This is one of the most interesting ways of making money in Nigerian Real estate which I think is under-explored. There are dilapidated houses in almost every major city in Nigeria selling at cheap prices. The cost ranges from thirty five million Naira (about $90,000) and above depending on the city. These are buildings that could instantly sell double or triple of the buying price when giving a face-lift. So if you’re the kind of investor who likes buy and flip real estate, this could be the one for you. And by the way, I forgot to mention that it could just take only ten million Naira (about $28000) or less to give a massive face-lift on such buildings depending on the type of building. Isn’t that a good deal? I think it is.
- Housing estate development
This for me is the best way to make quick tons of cash from Nigeria real estate market that is valued at almost N80 trillion which is over three times bigger than the local stock market, valued at N28.26 trillion. But this type of real estate business requires a lot of money too. But don’t be afraid, if you do have money to take advantage of this huge income opportunity, you’d be glad you did. I know you may wonder why I said this. The reason is that, at the moment you can count any real estate company in Nigeria that does full scale housing development. What most of them does are basically land trading. They buy huge acres of land, passilate it and then sale. Though this is very profitable as well, it is important to note that this is not real estate housing development. Real estate housing development comprises of buying of lands based on your development agenda and building houses on it and sale. There are areas still areas in the suburb of many cities that can be bought at a cheap price, that will sale like cheese. Trust me, if you pull this off, you will make over 100% of your investment. You mean 100%? Yes I’m serious I mean 100%. You may even sell off all the units before the completion of the project.
- Buy and hold of Land
This is another way you can earn money in Nigeria real estate market but it takes a long time in most cases for the profit to come. This is a form of land speculation, where you buy land in certain areas that you think could get huge value in few years and hold it, hoping to sale when then price appreciates.
This is yet another area of money making stream that is yet to be tapped to the full. Nigeria is a population of over 206,000,000 million people and it needs no explanation that the need for housing in huge. One thing about Nigeria is that no matter how bad the economy is there is always tons of building constructions going on. This is a huge opportunity for construction companies to plug into. Suffice to say that there are more unprofessional builders in Nigeria than professional and corporate construction companies and builders. I’d say the percentage is 70/30. This presents vantage for professional construction companies and builders…in fact there’s tons of money to be made in this space.
- Building Materials trading
Because of the constant building construction work going on in Nigeria, building materials trading is a very good income stream. Especially if you can establish that quality product brand for yourself or company. More also I think there’s a huge opportunity for anyone who’d introduce innovation in the way building materials is traded in Nigeria to take over at least 30% of this business space which runs into billions.
- Property Agent
Don’t be fooled to believe that there’s no money to earn from property agency, or that it is overly crowded. Even though this could be true to some extent, experience has taught me that there is huge opportunity to make good money from real estate agency if you can make yourself and your product visible for you potential customers. You have to create a brand for yourself; you can start by advertising your properties on Instagram, Facebook and a host of other mediums. Just find out what other agents are not doing or doing right and provide a better service and you will definitely earn big time. Of course you’ll earn…real estate deals are closing every day in Nigeria and agents are closing it not rocks!
Conclusively, you can make money by building a house(s) and renting it out. Renting income stream in Nigeria real estate is very good but I didn’t want to bore you with that because that stream is well established and doesn’t need too much explanation. There are also other ways one can earn from this business sector, like Architecture (designing and selling of building plans), Land survey (surveying land for land owners, clients, etc.), welding and fabrication, etc.
I’m sure your question have been answered if you’ve been wondering how Nigerian real estate make money.
Feel free to leave us a comment if you’ve learnt something or have any further questions.