Introduction.
This article tends to analyze the major problems or reservations associated with property investment in Nigeria by prospective investors. It seek to proffer solution, by proving right guidance to key considerations for property investment in Nigeria.
Price.
One of the key features of business is constant change in the prices of products and services. This is caused by lots of socio-economic factors and it of course affects both the buyer and seller. The price of a property is influenced by lots of factors .Often time people question the rational for specific price of properties. Truth however remains that one key factor that decides the price of a property is Location. Yes, the location of a property is key. The price of a property situated in a popular high brow, or Urban area will surely be higher than a property located in Semi-Urban area, Village or Outskirt of a city.
This is why every investor must be clear on the objective of every property investment because such objective will influence the location and price as well as the budget of the investor. Another key influence of Price of a product is the finishing.
The quality and features of a property also influence the price of the product. i.e it cost more to provide certain basic infrastructure of an estate. The quality or finishing of an apartment will also determine the price of the product. i.e, the price of an fully furnished 4bedroom duplex will surely be higher than that of an unfurnished 4bedroom Duplex. This is because the Furnished one will have items like a standard family size bed, Smoke extractor, fully fitted Gas cooker etc and all of this cost money.
Again, an apartment in Victoria Island that has a private Sweeming Pool And Private Cinema for example will surely cost more money to build that one without such luxuries.
For More Details On this, See… Volume 1 Of RealvestGuide Titled: Budgeting For Your Property.
Economic variables such as inflation can also affect the price of a property. The rate of Naira to Dollar exchange certainly affects the price of equipment or building materials in the market and this surely reflects on the finished product price. Another reason under economic factors is the issue of demand and supply. The inter play of forces of demand and supply affect price. In Nigeria of today, there are few quality homes being chased by many citizens who is in need of accommodation. Lagos alone has a population of about 22,000 with a daily rural-urban migration of about four thousand, all of this people are in demand of accommodation, which is surely higher than supply.
So the general state of a nations economy affects or influence the prices of goods and services, since the Real Estate is only but a subsystem of the general socio-economic system.
Location Is Far.
Another major objection and concern i have received so far is the issue of location. Some persons have asked me for example why they should own a property in Lagos when they live in Port Harcourt. My answer is simple, the real estate investment does not care about your location, its only concerned with rewarding your investment through value appreciation. Location is not and should never be a barrier to your investment.
As matter of fact, there are 3 major cities in Nigeria today, and that is Lagos, Abuja and Port Harcourt and others. This cities always experience huge demand for land and housing for both commercial and residential purposes. This makes them a very viable and rewarding market in Nigeria.
Some other people will say, location is far, however, the truth remains, no location is too far for development. All that’s is required is fore-sight.
The ability to buy land wait is key. Maroko was ones far impenetrable location for some persons in Lagos Mainland some years ago, but people like Late Chief Adebayo Adeleke, a Civil Engineer saw the future prospect of that same Maroko location that has been transformed into Banana Island, a center of Lurxury through a strong combination of human and technological know-how.
Land Appreciation.
Land appreciates over time. Although some lands appreciates faster than others. However, to know the prospects or level of appreciation, investors should look out for and take cognizance of the neighborhood of the property. The neighborhood can provide you an insight of what is bound to happen in the future.
An investor must also anticipate growth of the area. Times comes with growth of anything, land inclusive. No matter the location, a land or property surely appreciate over time in value. Major economic investments can also trigger land appreciation. i.e the siting of Lekki Free Trade Zone project and Dangote Refinery along the Eleko area of Ibeju has increased the value of properties that location.
Again, one major Basic infrastructure provided in an area can increase the value of a product, i.e the construction of Peter Odilli road in Port Harcourt some years ago made the place a hot bird for Property acquisition and Value Appreciation. Same story for Kubwa are of Abuja in 2012 via the expansion of the Umaru Musa Yar’ Ardua And Murtala Mohammed (Kubwa) Express road that connects Kubwa from the Abuja city centre opened up and increased the value of land in the area as viable alternative destination for city dwellers.
So, an investor must see the big picture, be willing to commit the needed resources to own and be patient enough to see it appreciate over time to gain massive return on investment.
I Do Hope I Made Sense To You, Its Always A Pleasure To Provide You The Needed Guide, You Don’t Have To Make Mistakes In Your Real Estate Investment Journey Because It Is About The Future.
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Bright Peterside.
Lead Consultant
Lagos Real Estate Broker and Investment Expert
Afri Shelters Ltd