9 THINGS YOU SHOULD KNOW ABOUT REAL ESTATE INVESTMENT IN NIGERIA

Did you know that Nigeria has a housing deficit of 17-20 million? Which makes it a hungry market for real estate investors because of the country’s ever-increasing population growth. But Nigeria as a real estate investment is worthwhile because of the market opportunities real estate investors can take advantage of.

Talking about real estate investment in Nigeria there is a need to appreciate and realize the peculiarity of our situation here in Nigeria because in Nigeria real estate developers paint with the same brush as is done in other developed countries. But as an investor you have the choice to choose the right investment strategy and how to implement these strategies here in Nigeria successfully.

1. UNDERSTAND THE ROLE OF THE GOVERNMENT

To avoid being taken unaware, you have to understand that in Nigeria government plays a vital role when it comes to investing. The land use Act of the Nigerian constitution empowers the governor to have unrestricted access to all land in the state.

For every single land transaction to be legally binding, it has to have the approval of the government. Therefore, to avoid getting into trouble, you need to understand the roles the government play in ‘rectification, ratification, giving of titles and approving transaction’.

To add to your advantage; befriending the government and government officials by following due processes in the land bureau is a required strategy depending on how far you intend to fly.

2. UNDERSTAND LAND LAWS AND TITLES

As a real estate investor, there are certain titles you should look out for when buying a property, which are; The Certificate of Occupancy (C of O), Excision, Governor’s consent, and Gazette.

All these titles are important when investing in real estate in Nigeria, but the major title you should always look out for in a property is the C of O (Certificate of Occupancy).

As much as you need these titles you also need to understand that legally binding property transactions can only be done on a titled property that is registered at the state’s registry. Now let’s look at these land titles in a jiffy;

• The C of O; Is a document that confirms the lease of a land to an individual for a long period of time usually 99 years.
• Governor’s Consent; Can be considered as a title because it confers authenticity on a land. It is a duly signed and stamped deed of assignment by the governor of the state. This shows that a land with a C of O title has been transferred to another owner duly recognized and backed by the state and the power of the governor.
• Excision; Is the process by which the government carves out area of places it deems urban areas and officially released and recognized the ancestral owners as the lawful owners of that portion. Therefore, an excised land is a land that has been legally released by the government to the ancestral owners. Wherefore, the said area of land is no longer under government acquisition and so processing of the C of O is possible.
• Gazette; The excised portion of land is subsequently recorded in the government official journal called the gazette. A gazette is an official record journal that clearly spells out all the details of an excised land- the accurate record of the numbers of plots that belongs to the government and the record that belong to a particular community. It states things like size, location, position and date of record.

NOTE: A registered survey and a free hold land is not a title, but a freehold land and a registered survey is free from government acquisition and processing of the C of O perfecting the title is possible.

Per the land laws, if a land is not registered or the survey is not lodged in the land’s bureau and duly approved by the governor through the C of O or allocation you have no enforceable legal right over it.

(Copied from ownahome.ng)

3. CHOOSE THE RIGHT LOCATION

Whatever, type of investment you choose in real estate, location is what matters most. The ability of an investor sighting the perfect location to carry out his investment plans is what makes him an expert in the market.

But as real estate investors should know; property’s situated at prime locations always sell itself and they are usually very expensive because every one wants to live in such an environment, thereby, causing inflation on property prices due to increase in demand. But what happens if you can’t afford a prime location— then you can as well consider areas that share boundaries with these prime areas.

As a real estate investor, you can also make a lot of money and save massively on your initial investment by spotting auspicious locations that can do very well within a few years. You can take the opportunity to buy at cheaper prices and maximize your profits when you either see, rent, or put out in the shortlet market.

4. PROPERTY RENTALS IN PRIME LOCATIONS

Delta State was recorded with a population of 5.6 million people with a housing deficit of 40,000 which makes the state a hungry market for real estate investors.

The population of Asaba the state’s capital is gradually growing as it serves as an attraction to investors, experts, vacationers, people on official visit and the likes.

Wherefore the rental industry is struggling to meet up with the demand for rent as most immigrants looks places to stay and do not want to put up with hotel accommodation which gives rise to a serviced apartment.

A serviced apartment — is a completely built and furnished home (it can either be a one, two, three or more-bedroom apartment) that is rented out for a short period of time.

As to this end a lot of developers are positioning their property development for the market to take advantage of the shortlet market. But since the demand for such services are new and few in Asaba, CONIC HOMES AND PROPERTIES LTD is one of the few real estate companies in asaba that offers such services, and with budget friendly prices you can get a sophisticated fully serviced apartment of your choice.

5. FOLLOW AREAS OF GOVERNMENT INTEREST

As a real estate investor in Nigeria you have to actively follow the government’s policy, direction and areas of interest. The government now have a blue print for every single square meter for specific purposes— Residential, Commercial, Industrialization, roads etc.

6. TAKE ADVANTAGES OF URBAN AREAS

Urban areas are area of land marked by the government for infrastructural development and massive projects. Per the land use act— government takes a large portion of these land in such areas for its use now or in the future.

Thus the remaining part of these land is free and by the legal process of regularization, ratification or excision ownership of these free portions can be transferred to their ancestral land owners for whatever use they deem fit.

7. TAKE ADVANTAGE OF GRAs

GRA in Nigeria stands for Government Reserve Areas. These areas usually house residential buildings— they were exclusively created originally for the white colonial administrators. However, after independence, first-class citizens of the country started occupying administrative positions which usually were meant to be used exclusively by colonial masters.

At present, GRA is usually one of the well-serviced areas with good roads network and other sophisticated facilities which have the president and state government houses, politicians, celebs and other influential citizens of the country.

Real Estate Investment in such areas yields a high return on investment not withstanding any plan or strategy adopted (rentals, development, flipping etc.) as prices are always in premium demand.

8. TAKE ADVANTAGE OF FREE TRADE ZONES

Free trade zones also called FTZs are special commercial zones in a country where there are little or no interference from any level of government authorities. It is driven heavily by the private sector with lots of barriers and bureaucracy involved.

Trade zones are attractions to both local and international investors and they also drive massive foreign direct investment (FDI). Benefits of investment situated in free trade zone include;

• Zero withholding tax on dividends
• Zero corporate income tax on free zone income
• Zero VATs on purchases made within the zone
• Zero custom duties on imports
• Exemption of Fx controls and DE dollarization policies
• No strike, longer stay of goods in the port.

(copied from ownahome.ng)

9. BUY INTO MEGA CITY PROJECTS EARLY

Megacities don’t just start from being a mega city, it starts from a piece of empty land and then into developed cities. As a real estate investor, you need to buy into such projects early and be amongst the few with unlimited equity.

Asaba is currently turning into a mega troll—- A real estate hub with hundreds of real estate projects springing up every month.