• Tuesday, March 05, 2024
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5 critical steps for buying property in Nigeria

5 critical steps for buying property in Nigeria

Over years, in the cause of selling Real estate, I have come across many prospective investors who come to me with question such as;

I want to buy a property in Nigeria but I really don’t know how to begin. Looking at these constant enquiries from Nigerians within and outside, one can easily see that many of these questions or enquiries are generally made either out of fear, out of losing money to scammers or out of sheer ignorance of the various processes or rudiments of owning a property.

This remains a major problem for real estate investors in Nigeria because, it is hindering real estate investment despite the avalanche of literature that seeks to provide guidance for investors.

In the course of my real estate consultancy and brokerage, I heard people speak of how they quit a property buying process simply because, according to them, the process was rather too tedious for their liking.

It is in a bid to proffer solution to this problem that I have put together five very critical steps for every real estate investor, particularly for those intending to own properties in 2023 and beyond.

These practical steps are a product of years of experience in selling real estate across Nigeria. They are very simple, yet effective, making them the easiest known guide to real estate acquisition in Nigeria. I confidently guarantee that a strict adherence to these steps can enable any prospective investor to invest in properties in Nigeria without stress.

  1. Have clear objectives

The first step to having a seamless property acquisition in Nigeria is for the investors to have a clear purpose of what they intend to do or achieve with such properties.

This is very important and must be clearly stated from the onset. Having a clear objective gives the investor a clear direction of which product to choose over another that best suits the investment objectives.

By investment objectives, I mean that the buyer must decide if such property should be; a buy and build land, land for future investment, off-plan housing projects with instalment payment, a finished buy and move in apartment, just to mention by a few. Having a clear objectives is very critical to the success of the property purchase of an investor.

The client’s investment objectives will further influence other factors such as location, budget, price etc. i.e a client whose investment objectives is to buy and build immediately, will surely require a buy and build land, which implies that such property must be located in an environment with active neighbourhood where people already live. This is necessary since the buyer cannot go and live alone in the bush, without a vibrant neighbourhood that will also form or compliment his security.

However, for a client whose investment objectives is a land for future investment purposes, would require a land in a developing area. This is because such investment objectives being a land banking process will require the buyer to buy properties from an under-developed or developing location, with highly affordable prices, which the buyer can resell in the future for premium returns on investment. A close look at the above examples shows different investment objectives which calls for different locations at different price scheme.

2. Budget

Budget in Real estate refers to the minimum and maximum amount of money the buyer or investor is willing to pay in exchange for the possession of pieces of land or home specification. Having a clear budget before beginning a property buying process is key to the end success of property acquisition in Nigeria.

Such budgeting is however predicated on the objectives of investors as earlier mentioned. Many times, investors come into the wide market like Real Estate with a wide range of choices without a clear budget.

This happens for both property sales and leasing services, and many times, investors or property hunters get frustrated because they came in with assumptions rather than having a clear budget.

Your budget also helps to give a clear direction of your choice location. The budget of an investor can also serve as another means to derive a client’s investment objectives. The issue of having a clear budget has made many property acquisitions impossible, where money available is below the price of property needed.

In deciding a budget for your property purchase, investors are advised to put up a budget that will suit their investment objectives. i.e if an investor decides to buy and build land in an already developed area or prime location, such buyer should set a realistic budget for the said location in line with the investment objectives.

Furthermore, given the fact that the Nigerian Property market is broad and constantly changing, I will also advise any buyer to have a clear but flexible budget that can fit into the prevailing market environment. Budget is very necessary whether for property purchase, leasing or rent.

3. Location

Location here refers to the geographical environment where-in the property is situated. The importance of having a choice location for your property acquisition cannot be over emphasised. This is because in many cases, the location of a property shall influence prices of that very property.

As we already established, upon clarity of investment purpose or objectives, such objectives will serve as a guide for the most suitable location to buy a property in line with the objectives. It’s also important to note that; in the Nigeria Property market and indeed all over the world, different locations call for different prices.

This is one of the major reasons why the cost or prices of properties in different locations differ over time. i.e the cost of buying a plot of land located at Admiralty way area of Lekki, a prime location in Lagos will surely be higher than buying the same 600SQM land in Ibeju-Lekki or Epe, a fast developing area of Lagos, Nigeria.

Same thing applies to Abuja. The cost of buying a 4 bedroom fully detached Duplex in Prime areas such as Maitama, Asokoro areas of Abuja will surely be higher than buying same fully detached duplex in developing areas of Abuja such as Kubwa, or Lokogoma.

Same thing applies to Port Harcourt where the cost of owning a plot of land today in places like old/new GRA, Peter Odilli Road or Ada George would be higher to buying same plots of land or finished apartments in uprising development areas such Rukpokwu-Eneka or Igwuruta. So the point here is that different locations call for different prices.

With this said, it becomes obvious that a buy and build property within a city will surely cost more to buy when compared to a land banking investment in developing areas.

4. Price

This is another major factor to consider when planning your property purchase. Like I mentioned earlier, different locations call for different prices. It therefore becomes very necessary for every prospective investor or property buyer in Nigeria to do underground research, to know the prevailing market prices of properties in different locations before embarking on a full-scale buying process. This property hunting process will surely help to make your purchase very easy.

It is also important to note that prices of properties in Nigeria are never stagnant. What this means is that prices of Real estate products in Nigeria, both land and apartment changes over time beyond human imagination.

This is however not strange given the fact that originally, by nature of real estate, properties appreciate in value per second. This is a holistic truth and unique feature of properties in Nigeria.

Prices of Properties in Nigeria therefore many times usually witness constant increase in prices, both for lands and houses, and this can be traced to lots of socio-economic factors such as rising inflation, exchange rate, cost of development, demand and supply among others factors. (See also; 4 Factors that influence prices of Real Estate Products in Nigeria by Bright Peterside)

As a real estate broker and investment expert, my suggestive solution to this therefore remains for prospective real estate investors to have a flexible budget, as well as timely purchase or acquisition.

Buyers can also look out for seasonal discount promos from developers which come up across the various months of the year. i.e December Discount Promos, Independence Day or Sallah Promos. (See also; 10 Top Promo Seasons to Buy Properties in Nigeria)

Another avenue to buy and escape constant price increase of properties in Nigeria in 2023, is to always take advantage of properties with instalment payment plans, through an initial deposit.

This is because, making an initial deposit for such properties especially in places like Lagos, Abuja and Port Harcourt, ties you to buying at current prices of property before any possible price increase.

Property hunters in Nigeria can as well look out for newly launched projects. One of the best times to also buy properties in Nigeria at an affordable price range is when such property is newly launched or introduced to the market.

5. Use a Real Estate Agent/Broker/Realtor

Many times, one of the reasons people experience failed property acquisition is due to the issue of self-reliance. Lots of prospective investors without adequate knowledge of the working of Nigeria Real Estate Industry often try to buy real estate without the help of a broker, agent or realtor. One reliable easy way to buy properties in Nigeria in 2023 is to use a Realtor cum agent.

Research has shown that a greater percentage of those who use property agents for their Real Estate have a greater success story than those who choose self-reliance. A professional real estate agent will provide you with necessary details, helping you carry out due diligence on the said properties, saving you from both cost and time. Use a property agent to help you for your property search, verification, purchase, and after purchase processes.

Real Estate agents have a better understanding of the market to help you make informed decisions.

A professional realtor understands the market and guides you to make the best choice suitable for your Real estate acquisition.

I can guarantee that if you apply the above recommendations, you will have a smooth purchase of any property in Nigeria for the year 2023.

Summary:

When it comes to buying a property in Nigeria, all that is basically required is the right information. Proper information is very important in the Nigeria property market. This is because it is a dynamic market that requires basic guidance for right decisions by investors.

I therefore gladly recommend the above brief, concise and practical procedure for anyone desiring to buy or increase their real estate portfolios in Nigeria within 2023.