fbpx

How to start a real estate business in Nigeria today (2022)

Date:

For many newcomers, property investment in Nigeria or real estate may sound like a challenging investment to get into, but with just a little bit of knowledge, even you can easily navigate your way to success in real estate. So what is real estate, and how does it work?

Many tend to associate real estate with land, housing, or other forms of buildings and infrastructure. These are aspects of real estate, but it is not the whole picture. Real estate investing is the purchase of property to generate income rather than living in it as a main residence. In plain terms, it is any land, building, infrastructure, or other physical possessions that are usually immovable but transferable. Real estate is an aspect of real property. It varies from private possessions, which are items that are not permanently attached, to the land, such as cars, furniture, and so on. Real estate includes the land and any lasting developments attached to the land, whether natural or man-made.

 

Starting a real estate business in Nigeria

Real estate in Nigeria is recognized as one of the most lucrative and rapidly growing industries. You could easily earn a lot of money today by initiating a real estate business, whether as a real estate agent or as an investor. Starting your own real estate business in Nigeria is no easy path, but its returns can be very rewarding. The market is well organized, with numerous new and established players striving for a piece of the market. However, don’t be overwhelmed by the competition; instead, focus on creating a distinct brand that stands out from the crowd.

 

Build a proper plan

To overcome this market, you need a strategic business plan. Real estate investing is like starting any other business in that you cannot begin on a whim without a specific business plan in mind. There is no point in throwing money into an investment without any proper planning.

A business plan is essential for any business, whether it involves real estate or not, and one of the best pieces of real estate advice you’ll ever receive is to start small and plan, plan, plan! This step is extremely crucial if you intend to become a long-term real estate investor. In this case, you want to strategically expand your real estate investment portfolio.

 

Follow the law

If you truly want to take this business to the next level, you must first legalize its existence by registering it with the Nigerian Corporate Affairs Commission (CAC). If you can’t afford to register it as a Limited Liability Company(LLC), registering as a Business Name with CAC will suffice for now. Also, keep an eye out for the rules and regulations that govern professional real estate bodies in Nigeria to ensure that you are not breaking the law. Association of Estate Agents in Nigeria (AEAN), Real Estate Developers Association of Nigeria (REDAN), and Nigerian Institution of Estate Surveyors and Valuers(NIESV) are some of the popular real estate professionals institutions to keep an eye on. 

As a Nigerian, you have the right to own property. Nonetheless, the 1978 Land Use Act grants state governments control over land within their borders. They will then make it available to you after an extended and administrative process. You will then be given a certificate of occupancy, allowing you to sell or develop the land. Your right may also be denied if you live in a location that is not your place of origin, which can be very subjective at best and can cause ethnic conflict.

 

Envision and plan ahead

You may not have an essential infrastructure where your property of importance is now, but if it is in the path of developing urban areas, you can never go wrong. In a few years, you may well be able to sell it for large bucks more than you paid for it. Make sure this goes well with your business plan.

 

Do some research

Make sure you don’t do business with people you can’t trust. Consult industry experts and a lawyer to ensure that everything is in order, from the federal government’s requirements to the owner’s concerns. Another well-known fact is that property scammers are rife in our major cities, posing as sellers of houses whose owners are away and selling them with forged title deeds. Beware, Seek the advice of experts such as surveyors, who will inspect the property and provide you with recommendations.

Enlist the help of architects and surveyors when it comes to construction. Do not rush things and end up spending more money than you need to. Since you’re interested in learning more about the real estate market, there are a few resources available. The mainstream media, both online and in-person, as well as speaking with residents, are some of the sources for information. I mean, there is also the internet, and many other sites ready to provide you with the information you need.

 

Things to consider before starting real estate a real estate business in Nigeria

There are a few things you need to take into consideration before getting into real estate.

 

Capital

If your business plan is on the right track, you should have figured out how much money you’ll need to get started, depending on the scale at which you want to begin. You can look for alternative funding if your savings and financial capacity are insufficient to get started. Unless you are sure of your financial backings, it is not advisable to start a real estate business. Real estate is a capital-intensive business that necessitates a significant amount of investment. If you don’t have enough, it’s critical to seek out investors. You can look for equity investors who can provide you with enough leverage to get your business off the ground and help you grow quickly.

 

Online Marketing

You cannot afford to ignore the Internet as a real estate investor in Nigeria. Whether you have a website or a social media presence, the Internet is a cost-effective way to drive traffic to your business once it gets off the ground. You might be able to attract buyers or sellers by using online marketing.

 

Proper Branding

In Nigeria, brand credibility is critical for establishing a successful business, especially when millions of Naira are at stake. Branding is all about instilling a positive image of your company in people’s minds. To build a relationship with your customers and turn your real estate business into a trustworthy brand. You must give them more than enough value for their money and engage with them on a personal level. Also, invest in premium branding identities such as a logo, website, advertisements, and more. This will help to set your real estate business apart from the competition.

 

Proper Execution

Execution is the final step in forming a real estate holding company. If you are done writing out your business plan, start working on bringing it to life. Countless businesses have failed or suffered great losses due to improper execution. Execution refers to the day-to-day operations of your company. This includes things like deal closing, marketing, networking, client orientation, and human resources, among other things.

It’s not for the faint of heart to start a real estate business in Nigeria. Sometimes there will be mishaps, nothing can be guaranteed. So, if you want to be successful in real estate, you must be willing to take on challenges. Develop your aspirations and become a value-driven professional on a personal level and as a business owner.

 

Career opportunities associated with Real estate

The real estate market is huge, and those interested in helping with the purchase, management, or sale of properties can find a variety of real estate jobs. You can work in either residential or commercial real estate, or a combination of the two. Understanding the various real estate occupations will assist you in determining which aspect of the industry best suits your skills and preferences.

Although working as a residential real estate agent is one of the most widely known professions in the real estate industry, it is far from the only one. Yes, most high-profile real estate career opportunities involve purchasing and selling residences. However, the industry is dynamic, and a real estate license can lead to a variety of other opportunities.

Here are some other career opportunities associated with real estate:

 

Real estate managing broker

Even though the terms are often used interchangeably, being a real estate broker is not the same as being a real estate agent. A broker differs from an agent in that a broker is a licensed real estate professional who has completed additional training and is qualified to handle a real estate office with multiple agents. If you’re in the process of becoming a real estate agent and want to know how you can advance your career, a real estate broker might be a good option. It is one of the jobs on this list that requires a real estate license. 

 

Commercial real estate agent

A commercial real estate agent’s day-to-day activity may entail more research than a residential real estate agent. A commercial agent assists businesses in selecting and securing locations that will increase their profits. While sometimes this means finding the ideal location where a product is mostly sold to build a store there, it could also involve leasing an office space. As a result, commercial agents must often place a greater emphasis on gathering statistical data about the location before making a deal.

 

Leasing Consultant

The job of a leasing consultant is to ensure that the building is occupied. Although this job frequently requires you to work long hours, it also usually comes with some flexibility. This could be a great role for you if you relish marketing and negotiating. Leasing consultants often throw promotional events. They frequently represent property owners by meeting with prospective tenants and giving tours of the property. The leasing agent qualifies tenants, screens applicants, and processes lease documents.

Foreclosure Specialist

Foreclosure specialists work with homeowners who are facing foreclosure. They look at liabilities, inspection reports, insurance policies, bank statements, billing histories, appraisals, and other documents to see what options are available to the client. They may be able to assist the client in applying for a reorganized loan to avoid foreclosure in some cases. A foreclosure specialist is someone who works for a bank or a private lender and oversees all the documentation and steps to be taken when an asset is foreclosed on. They will analyze the client’s financial statements and manage foreclosure cases to resell the property as soon as possible. A foreclosure specialist must be well-organized and able to meet deadlines.

 

Property Consultant

A property manager oversees managing the administrative tasks associated with marketing, negotiating leases, and maintaining a rental property. A property manager oversees finding the correct rental rate for the area, collecting rent, and overseeing the property’s budget to ensure profitability. In addition, the manager will hire maintenance and landscaping companies, as well as schedule renovations and routine maintenance.

 

Mortgage broker

When a mortgage is being executed, a mortgage broker acts as a middleman between the lender and the borrower. The real estate broker represents the buyer and assists with the loan application process. A broker will assess their client’s financial situation and be among several lenders and loan programs that are best suited to the buyer’s needs. The buyer’s broker then arranges with the lender on the buyer’s behalf.

 

Real estate developers

Real estate developers are those who purchase land and develop it into a residential or commercial property. This can range from a four-bedroom family home to an office building. A real estate developer oversees organizing the development of these structures, as well as financing and assembling a team to carry out the plan. This means that in addition to working with architects, engineers, contractors, construction teams, leasing agents, lawyers, and other professionals, real estate developers collaborate with architects, engineers, contractors, construction teams, leasing agents, lawyers, and other professionals involved in the various aspects of the property.

 

Commercial appraiser

A commercial appraiser, like a residential appraiser, spends part of the day in the office and the rest of the day assessing properties in the community. While a residential appraiser may depend largely on what they learned in their licensing curriculum, a commercial appraiser relies heavily on experienced appraisers to teach them how to evaluate a property’s value. Both disciplines necessitate the acquisition of a license.

Residential real estate is only a small part of the real estate industry. It refers to a wide range of job opportunities that require different skill sets. There are so many paths you can take in your career should you be interested in real estate.

 

Pros and cons of Real estate investment in Nigeria

In any business venture, just as there are upsides, there will always be downsides. The same thing can be said for real estate. Real estate is a vast topic, and it is hard to believe that not one thing can go wrong when investing in it. This is why we will be discussing the pros and cons of starting real estate in Nigeria.

 

Pros

  1. Security: Because the price of real estate does not seem to fluctuate, it provides a sense of security. The return on investment is observable. In most cases, the value increases over time. Even though that’s not always the case, the likelihood of a property’s value decreasing over time is low. That is why thorough research of an area is necessary before investing.
  2. Easy to Understand: It can be difficult to comprehend everything you need to know to make money when you first start investing. Many types of investments are based on abstract concepts and complex algorithms that are particularly difficult to grasp, not to mention the many different processes involved. Real estate, on the other hand, is concerned with the acquisition of physical property, and most people are more familiar with it to some extent. Real estate investment can be much easier to comprehend than complex mathematical investments. Although it is still highly recommended you make your research before making any big moves in real estate investing.
  3. Good income stream: This serves as a source of income, or better yet, one of several income sources for a person. To match the financial stress in the Nigerian economy, one must have multiple sources of income. The owner of real estate benefits from a consistent stream of income. Keep in mind that the property’s income is primarily determined by its location. Learning how to find a good location can go a long way toward assisting you in making a sound property purchase decision.
  4. Immunity against inflation:  Among the few assets that react proportionately to inflation is real estate. Housing values and rents rise in lockstep with inflation. This could help you gain a financial upper even during an economic crisis. Because of this, real estate is one of the most effective ways to protect an investment portfolio from inflation. Though real estate is a good inflation hedge, rental properties that are re-leased every year are particularly effective because monthly rents can be adjusted upward during inflationary periods. Not to mention that landed property does not depreciate but appreciate, and Nigerian property is no exception.

 

Cons

  1. Maintenance: A property’s upkeep can be quite costly. Aside from the financial cost, the physical and mental effort required may be considerable. If the units are being rented, keeping them in good repair so they can be occupied could be costly. The owner may have to spend a considerable amount of money on repairs, electricity bills, and other expenses. A property must be repaired, maintained, and managed after it is purchased by an investor. Payments on the mortgage, property taxes, insurance, management costs, and cost of maintenance can quickly add up, especially if the property is vacant for long periods.
  2. Low liquidity:  Many investments, such as high-frequency stock trading, are highly liquid and can be purchased and sold at a profit in a split second. Real estate investments, on the other hand, are comparably illiquid because properties cannot be sold quickly and easily without suffering a significant loss in value. Investors in real estate should expect to own a property for months or years, especially if it will be leased out. There is no guarantee that your property will be purchased, even after taking all the necessary steps needed to maintain it.
  3. Liability and loss: Real estate investors must be willing to take chances. They should also be ready to handle the associated losses and liabilities. The circumstance of the local area where the property is located has a significant impact on real estate.
  4. Higher Transaction costs: When buying stock, the transaction cost is usually very low, only a few dollars. The transaction costs of buying real estate, on the other hand, are significantly higher. Unlike other kinds of investments, real estate transaction costs can have a significant impact on the investment’s value and make profiting more difficult.

 

Conclusion

Starting a real estate business in Nigeria is no easy feat, which is why it is more rewarding when it pays off. It takes a lot of determination, effort, financial backing, and carefully planned steps to be successful in real estate. Without a doubt, there may be challenges (most of which can be foreseen after having read this article). Nevertheless, there are still people struggling to take a piece of the market share that real estate has to offer. There is a lot of profit to be made in Nigerian real estate market and you could be the next successful agent. 

━ more like this

Experiencing a failing relationship? Here are eight reasons why

If you're reading this, you probably asked, "Are relationships hard?" or "Why is my relationship failing?" You're in a long-term relationship, and you've been...

Low Self Esteem: Meaning, Causes, and Solutions

Each of us has felt that we do not measure up at one time or another. We make a mistake at work, get ignored...

What is self-awareness and why is it important to you?

Let's presume you're about to say something hurtful or impolite to someone who has offended you. But before the words leave your mouth, you...

What are life goals and how do I set them?

Setting and accomplishing objectives is stressful today. From life goals to everyday goals, these goals are especially true in business, where the "hustle and...

10 profitable home-based small business ideas

Renting office space, warehouse space, or commercial real estate can be extremely expensive for a startup company. In contrast, many opportunities for home businesses...

LEAVE A REPLY

Please enter your comment!
Please enter your name here