The real estate industry is rapidly growing. Even in Nigeria, it is one of the most profitable businesses today. As such, the number of people investing in realty is skyrocketing.
Are you looking to become a Real Estate investor yourself? If so, you are at the right place. In this article, you’ll learn what you should know about real estate investors – who they are and how to become one. So down to the chase.
Basics of Real Estate Investing
Real Estate investment is a strategy that entails the buying, selling, and renting of realties for profit. Thus, real estate investors are people who invest money in acquiring or developing a property.
As you might expect, realty investing comes in various forms. However, the success of your investment strategy (no matter form it takes) boils down to two factors. First is the market value. And secondly, your expenses.
The market value or worth is the expected price of a property. It is used by both sellers and buyers during negotiation. After all, no buyer wants to spend more than the market value. On the other hand, sellers want to reap more profit by selling higher than that.
Your expenses incurred during the purchase or development of realty is another factor. If you’re spending way too much than the market value, you might be inviting loss. Why? As stated above, no buyer wants to spend higher than the market price.
So before spending on a realty, consider its current market value. Is that price likely to increase in the future (appreciation)? Is the property in a popular location? If so, you’ll be able to easily convince buyers to spend more. With all these in mind, what are the different forms of real estate investment?
How to Become a Real Estate Investor in Nigeria
There are different opportunities available to anyone looking to become a real estate investor. Three of the most common effective ones include:
1. Realty development
Developing properties remains one of the most common ways of investing in real estate. But it isn’t just common. It is also one of the most profitable investment strategies you can pull off in Nigeria. Here’s what it involves.
- First, you need to acquire land. Ensure the land you buy is in a good location that’s guaranteed to attract buyers.
- Next, build on it. You can choose to construct stores, houses, or even factories for industries. Whatever you choose, ensure your structure is of high quality.
- Once you’ve done that, you can then start looking for buyers.
All of these no doubt require a large amount of capital. However, with the right planning, you can expect to reap high profits.
Depending on the location, market value, and building quality, you can earn double what you spent.
2. Renting
Renting is another investment practice that’s common in Nigeria. It goes hand-in-hand with property development. You can buy land and then erect a building but rather than selling, you lease it out to tenants. You can also choose to buy the property and then rent it.
It is a way of generating steady income since they pay you a fixed sum monthly or yearly. Here, your only responsibility afterward will be maintaining the property.
3. Real Estate Investment Trust Funds (REITs)
Unlike others on this list, REITs are not a familiar way of investing in real estate. However, it remains an effective strategy. It is a method that allows you to invest by purchasing stocks.
Real Estate Investment Trust Funds are firms that use the capital of investors to buy and manage realties. Then as a stockholder, you’ll be entitled to a share of the income generated from the firm.
In this method, you won’t need to do the buying and selling. Hence, you can generate revenue from real estate without much knowledge of real estate. Isn’t that interesting?
Wrapping Up
As mentioned above, the real estate industry is rapidly growing. And that will not change. The increase in population will only fuel that growth in the years to come. For real estate investors, that growth means more income. So you shouldn’t delay.
After considering the factors discussed above, decide on how you want to invest. Once you’ve done that, click here and get started on your investing ASAP.
