Shelter, the second most important need of mankind, next to food and clothing, is fast becoming a channel for rapid revenue generation for the business savvy.
With the mass migration of people from the hinterlands to the metropolis witnessed in recent times, there couldn’t be a better period to invest in the property market than the present.
At the moment, the city of Lagos boasts a population of about 19 million and according to the United Nations Populations Fund, UNFPA, the Federal Capital Territory has a projected head count of over three million people with Kano quadrupling that size at twelve million.
The burgeoning capacity of these urban centers has been linked to the high influx of indigenes from neighbouring states in their search for greener pastures and the population count is not set to take a downward spiral say global census experts.
Only recently, the federal government and World Bank released a statement claiming that the country has a housing deficit of 16 million units with an estimated investment price tag of N59.5 trillion.
The prognosis is that by 2015, more than half of the nation’s inhabitants would be urban dwellers, which makes this the ideal time to invest.
One person who has taken the bull by the horns and is reaping huge profits is the Chief Executive Officer of Lekki Gardens, Richard Nyong, who has successful delivered over 2,000 housing units to his growing clientele in two years.
In a recent interview, Nyong appraised his efforts saying, “There is no magic in what we are doing here; it is just a clear vision about providing housing solutions and far beyond that is the desire to serve the customer”.
This invariably means that it’s a level playing field for takers.
While there are different strategies to be used in ensuring profitability when venturing into the property market, it all starts with finding the best deals and applying some savoir-faire in the mix.
Speaking with Micheal Ejekam, director and principal real estate consultant at the private equity firm, Actis International, the investment strategy for his company is “to tap into rapid urbanization and the growing consumer class by creating inclusive retail centers ranging from small format to large malls that also serve as destination and leisure hubs.”
Even though Nigeria is yet to fully implement a proper housing-mortgage programme, leasing large apartments in Central Business District’s (CBD’s) at a fraction of the prices on rotation around the high-brow regions of the city is also a viable venture especially if the quality of the spaces available for rent is at par with international standards.
A tour of the opulent sections of Ikoyi and Victoria Island reveals unoccupied multi-storied residential buildings running to waste mostly due to the exorbitant rent charged and inadequate maintenance. Addressing the issue, Ejekem expressed, “There is in fact a demand-supply housing imbalance in the metropolis but the reason why many residential homes are lying empty in the city is because of the low up keep of these structures.
“They tell you [a building] is a luxury apartment and when the clients who have traveled the world take a look at the so-called luxury apartment it is disappointing – there are no proper lightening and there’s just too many issues,” he stated.
As an investor, you can draw in a huge customer-base if a little more attention to detail and care is put into maintaining the building.
With private beaches and luxury vacation spots cropping up around the coastal cities and some sections of the hinterland, tactically positioning vacation rentals for use by visitors is a smart way to go says, Yinka Omotosho who is the divisional head and principal advisory at Broll Nigeria – the sub-regional arm of its international affiliate.
He further stated, “If there is one thing this country is besot with, probably due to the low income-earning rate of most of its populace, it’s fragmented buildings of various shapes and sizes that are in need of a complete overhaul. More often than not, the owners of these assets are willing to release the properties at comparatively low values.
“From duplexes all the way to large facilities, investors could buy them, fix it up and re-sell or convert it into a rental,” he finished.
Other means of making money through the property market that many do not know include buying bank-owned assets that were taken back when a person who money was lent to defaults on paying back the loan. Often times these spin-off’s from bad debts can be picked up for significant discounts, as the bank’s are often very willing to get the loan off their books at a token, especially because there is no emotional attachment involved.
Despite the fact that real estate syndication or partnerships are not common in our clime, experts insist that they are highly rewarding. It’s a case that plays out when multiple parties combine resources to buy or manage buildings or pieces of land.
This is an excellent opportunity to purchase large assets such as apartment complexes, shopping malls, or warehouses in conjunction with other people at a value less than the total cost price and usually, the profit gotten from sale or managing the units is divided among stakeholders.
Finally, a person who has garnered some experience in real estate investing can make additional income by sharing the knowledge as a consultant and earn a decent side revenue while at it.
By Rita Ohai
