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Investment Opportunities in Nigeria Real Estate

Updated on August 31, 2011

The Nigerian real estate and property market is a fast growing one with Lagos Nigeria population growing rapidly and steadily over the last few years and expected to continue for a long time to come. Following the Nigerian stock market crash of 2008, many investors have moved their money into real estate and properties because they believe it is more secure and profitable than most other kinds of investments.

As a result of this push property values in Lagos Nigeria is expected to continue rising plus the fact that land is becoming ever scarce and population is expected to shoot up. Also foreign direct investment is expected to increase sharply within the next 10 years meaning that accommodation and properties will become scarce and very expensive with property owners becoming rich. In order to profit from this expected boom, would be investors are likely to find the following avenues;

1. Land acquisition

Acquiring Land for no other reason than in order to sell it at a higher price in future is a very sound investment idea. For instance in 2001 land sold for roughly N2 million a plot in Lekki Phase 1, by 2011 for even N12 million you can boast to friends for having made a good bargain. Factors that determine value of Land in some places include location especially when such a place is closer to the hustle and bustle of Lagos and presence of infrastructure especially roads.

2. Property development

Other investors merely acquire land, build property on it and then either sell it or put it up for let. Some other landlords simply enter an agreement with property investors to reconstruct their houses or property into more commercially viable structures. Some landlords have developed their bungalows into multi storied buildings with build and operate agreement between them and the investors.

3. Property Letting and leasing

Some people wisely buy property in order to put it up for let. Houses that fall into this category of investment include; Bungalows, Duplexes, Apartment buildings or block of flats as they are known locally, single or multiple storey block of single room apartments called face me I face you in Lagos Nigeria. Also there is construction of hostel accommodation blocks for students but this is mainly in University towns (towns with large student population in which a university or polytechnic is located). There is no limit to returns on investment because usually within 5 to 10 years after investment, the entire outlay is recouped. Some other people also let out undeveloped land for various purposes such as farming, artisanship, factory use, car parks and many more.

4. Luxury Apartment

With a growing expatriate community, Lagos Nigeria also offers opportunities for luxury apartments that is best suited for high net worth people on short stay in Nigeria. Typically these people want comfort and exclusivity and can also afford to pay heavily for it. The outcome is a chance to make incredibly high profits.

5. Commercial Buildings

There are many commercial buildings in places like Marina, Broad Street and other parts of the Lagos Island but what about Victoria Island and Ikoyi where many corporate organizations would like to have their base? These places also offer the chance for buildings that serve only corporate clients to be erected. Right now 1004 flats in Victoria Island is up for this purpose. What about warehousing or office space lettings even on the mainland?

6. Real Estate Investment Trust (REIT)

If you have the money but lack the experience or skills to invest in the Lagos Nigeria property market, then perhaps you may be interested in Real Estate Investment Trust Scheme (REITS). These investment instruments are offered by property development companies that have the technical manpower to pursue the investment on your behalf. You only invest a certain amount of equity with them and they pay you an interest on your investment annually. Of course you can pull-out anytime you want.

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