How you can start small scale rental estate in Nigeria
Buying and selling of land in Nigeria, especially in the urban and suburban cities, is the most risky aspect of real estate investment. At least, 50 per cent of cases in Nigerian courts are land related. Building house for rent is the most troubling issue in Nigeria as tenants will make your life miserable. And the chances of getting your rent when due is less than 3 per cent.
The most profitable niche in real estate investment anywhere in the world, including Nigeria, is building houses for sale. An instance is, if you invest N100 million to build one house, be sure of selling it for more than N200 million. It may take time to sell but when it finally does, you will be in money. There are countless people looking for houses to buy in Lagos, Abuja, Port Harcourt and other major cities in the country.
Real Estate Agency is another powerful aspect of real estate business that is generating money for the operators without much effort. Sometimes, little or no investment is required to get started. For starters in real estate business in Nigeria, you may not have huge sums of money to get started. This is because a lot of people would prefer to build two-bedroom flat at a time and rent, come again with three or four bedrooms and rent them. As time goes on, and with judicious finance management, he grows to make it an estate. Most people become lethargic when it comes to building estates because those who have deep financial pockets carry the projects in such a way that those venturing into the business with lean purse get frightened.
Those who want to venture into real estate business without huge capital have got some factors to consider to make a smooth dive into it. One of these factors that will make you succeed in this career include your ability to have little knowledge of the real estate terrain in Nigeria. Just as you have to carry out a thorough research on any business you are starting, you need to do so in this sector. How does the sector work? Who are the big players? What exactly do they do? How do they serve their clients? What laws guide operations in the city/state where you want to operate in Nigeria? And so on. Your research may include learning from those whose real estate business is thriving. You can get books on real estate business or follow a mentor in real estate. Getting adequate information will feed you with the preliminary information you need to succeed.
It is no gainsaying that anyone who wants to start a project, whether a bedroom or three-bedroom flat, is sure to make some spending. If you did your research well, you must have known the minimum amount of money it will require to get you started depending on the scale at which you choose to start. It is advised that you don’t take a loan to start a business because of the uncertainties that may arise when starting a business. Businesses are toxic risks and it will not be advisable to start a toxic business with loaned money. That is capable of sending you to the world beyond. It can also cause high blood pressure and lead to eventual incapacitation. The best bet is to start on a small scale and then rise gradually.
For you to start the project, it is very advisable to draw the plan and remember all the little things that are part of the project. That will give you clue on whether you are good to go or you need little savings to get started. You are not yet in business if you don’t have a written plan. It shows you where you are going and how to get there and if it is viable to go there in the first place. Let your business plan include your business goals, units of the business, stages of growth, source of funds and every other relevant thing that will get you focused on your goal. If your business plan is well written, you may attract investors.
The saying that anything worth doing is worth doing well is a wise saying when it comes to property development. This is because a single mistake that is noticed even after the project is completed could result in demolishing of the entire building. This is why one should secure all authentication for every single document. That will make your real estate business legal and recognised.
Business registration is important, especially in this sector. You must register with Corporate Affairs Commission (CAC) and get a certificate to operate as a business. There are also associations and agencies that regulate real estate operations in Nigeria. For example, Real Estate Developers Association of Nigeria (REDAN). You must align with the authorities that are related to real estate for you to operate well.
Your corporate personality is critical to your business success. The image you project will tell whether your would-be clients can trust their investments into your hands. You cannot be a player in the real estate sector and have your office in a shanty. You must get a good office facility and ensure that it is well furnished. Although this is necessary, you also must be careful where the office is located as paying too much on rent can eat too deep into what profits should have been ploughed back into the business for expansion.
You know that right professionals manage the activities of their profession better so you must also higher the right professionals. This is a business and it is definitely not one you can run alone, even if you are the one with the idea for the business. You will need the service of professionals to carry out daily operations so that things can move seamlessly. Office and field staff, marketers, engineers, architects, electricians, surveyors, and the rest of them. Apart from the office and field staff, others can be hired on a contract basis.
Real estate business is capital intensive and requires huge investment. If you do not have enough, it is imperative that you seek investors who can partner with you. You can look for equity investors or talk to mortgage or commercial banks for long term loans that can give you enough leverage at the start and accelerate growth. There are different ways of playing in this sector. You can be an agent or developer. If you are into development, you need to get landed properties and start actual construction. Some real estate operators re-sell some portions of the land to clients and help them build and build other portions and sell houses outrightly.
How do you intend to do yours? You must decide. It is no longer news that not having a website for your business is digging the grave of that business from the onset. Quite a number of the people you might want to serve are likely to be checking out the internet for credible real estate companies they can do business with.
Hire the service of a website designer and Site Executive Officer (SEO) consultant, to get a good website running. The work of the SEO consultant is to ensure that your site ranks high in search engine searches.
Have a functional and interactive website where prospective clients can make enquiries and see photos of available options of property when you begin to have them or likely ones that would come up later. Also ensure that the site has contact information and someone is available to monitor and respond promptly to enquiries.
There should be days of the week where you (and your staff) will be dressed in branded shirts. Your marketers should often wear the branded shirts for marketing purposes. If you have cars, brand them in the name of your company. You should also have other branded materials as souvenirs to give to prospective clients who come in to make enquiries.
One additional thing you will also have to do is to advertise. You must blow your trumpet and announce to the real estate buying market that you are here and here to stay. Announce your arrival in the real estate market. Use handbills, local/national newspapers, real estate journals, radio, television and as much as your budget can permit to advertise. Bottom line is, don’t wink in darkness. If you do, no one else will notice except you.
According to Mr. Oluwakemi Adeyemo, an enthusiast of real estate, said real estate investment is something very many people are interested in even though they don’t know how to go about it. “It is absolutely important to have investments in real estate. I tell people that it is a fundamental human right backed by Nigeria’s constitution to have real asset anywhere in Nigeria.
A handful of Nigerians, home and abroad, want affordable property to own as homes and also as investment for cash flow. However, we also need to look at the profitability and appreciation of the investment over long, short and mid term periods. Nonetheless, before choosing a location to invest in, one should consider a whole lot of other factors. To invest in real estate, there are some perspectives to this to guide investors on profitable, good titled investments especially in Lagos,” he said.
According to Amos Eguabor, property agent, who is glad that more and more people are beginning to appreciate the industry, “one fact we need to know and accept is that business is like a wheel barrow. Nothing happens until you start pushing. Money loses value over time, particularly in a period when a nation is experiencing or has experienced recession. However, if you invest your money in real estate, your investment will help you save money. It also helps you grow your money.
For Robert Kiyosaki, an American businessman whose large portion of his business empire and wealth is concentrated in real estate investing, the philosophy of the rich and the poor is this: “the rich invest their money and spend what is left. The poor spend their money and invest what is left. To be rich, remain rich or help save your money, please, invest in real estate,” he stated.
For Taiwo Adewale, staff of first Real Estate Network Marketing Company in Africa, “real estate business is the only business today that can assure you of 200 per cent return on investment just because you can never go wrong with it. Mind you, real estate in
Nigeria today requires careful evaluation, so be at your best while searching for which real estate firm to work with. To start, there are a lot of tutorials you can lay hands on for you to be an independent consultant and earn a reasonable amount consistently depending on your level of commitment to the business,” Adewale said.