How much money can you lose if you don't use the right real estate investing tips? A lot of money. In fact, millions of Naira. One thing you will discover is that buying a home is about the most important and most expensive investment you will ever make. A house is the most expensive single item you will ever buy in your life time.
Buying even a small bungalow in Lagos Nigeria run into millions of Naira. For example, a bungalow in Ogba cost about 15 million Naira (approximately 107,000 US Dollars). This is certainly not a small amount of money.
Since real estate investing is pretty expensive, it is important that you devote some time to learn how to invest in real estate. The goal is not to make you a super investor (there's nothing wrong with that) but to help you appreciate the benefits and risks associated with real estate investing.
Sure, the benefits outweigh the risks. That is why we are having this conversation in the first place. But you also need to be aware of the risks.
Smart real estate investors always evaluate the benefits of investing in a particular location vis a vis the risks . . . the pros and the cons. That is the smart way to invest in anything including real estate.
So, what are the risks associated with investing in Lagos Nigeria real estate? What are the benefits?
The following section provides some free investing tips . . . free investing tips on how to invest in real estate and secure your investment.
- Investing Tips - The Risks
The first risk that comes to mind when investing in Lagos Nigeria real estate is the potential to fall into the wrong hands.
What do I mean by the "wrong hands"?
Well, there are people who perpetuate Nigeria real estate fraud. These people pose as genuine real estate agents or as genuine home owners. Then when you trust them with your hard-earned money, they disappear into thin air.
The second risk is the risk of buying low growth real estate.
Low growth real estate refers to real estate that has ridiculous year on year growth rate. That is, the property has a small margin growth year on year compared to some properties with high margin growth.
The term low growth real estate has come to refer to single digit growth rate.
For example, a friend decided to invest in a developing neighbourhood. Later he discovered that the year on year growth rate was 5%. Another friend bought a bungalow at about the same time and now enjoys 30 percent growth rate year on year.
- Know your options.
Since not all investment properties are the same, it's important to determine what type of property fits your strategy, says Harrison Merrill, chief executive officer of Merrill Trust Group, a real-estate investment company based in Atlanta. Do you want to become a landlord, or would you rather restore and resell properties? Are you interested in apartment buildings and other commercial real estate, or in buying land that can be developed? First-time real-estate investors may want to start with residential housing, since commercial real estate and land development still face challenging market conditions, Merrill says.
• Find rental properties in your area
Partner with experience. First-time investors should find a real-estate agent experienced in investment property deals who can help you locate promising properties. Look for relational brokers who expect to do business with you again and therefore are going to be much more careful with what they recommend. A second option is to collaborate with a more experienced real-estate investor and close a deal together. In this economy, an experienced real-estate investor may be willing to work with you in exchange for the capital you can provide, giving you the opportunity to glean investment knowledge and experience firsthand, Merrill.
Even if you don't collaborate with other real-estate investors, talk to them about pitfalls they've experienced. Go down to the general district court in your area and listen to some landlord/tenant cases so you can get a sense of what kind of challenges landlords face.
- Look for the right location.
If you buy a property with hopes of renting it out, location is key. Homes in high-rent or highly populated areas are ideal; stay away from rural areas where there are fewer people and a small pool of potential renters. look for homes with multiple bedrooms and bathrooms in neighborhoods that have a low crime rate.
Renters gravitate to a safe neighborhood, and if they have kids, they will want a good school district. Also think about potential selling points for your property. If it's near public transportation, shopping malls or other amenities, it will attract renters, as well as potential buyers if you decide to sell later. The more you have to offer, the more likely you are to please potential renters.
- Have capital lined up.
Speak to potential lenders or even a financial planner about whether you have enough assets to handle the ups and downs that could come with investing. Even if you plan to rent out the property, count on paying the mortgage whenever there's a vacancy. If you can have about six months of mortgage payments saved up, it's there if you need it, and you can use that money for repairs. Even if you're planning to fix up a home and sell it, you may end up holding onto it for several months in the current market.
- Build a supporting cast.
Don't wait until a rental property needs repairs to find someone to handle them. Line up maintenance individuals who can take care of the different challenges that occur so you can simply call the person when a particular issue comes up. Other sources you may want to have relationships with are an attorney to consult with on tenant issues, a property management firm to handle the day-to-day rental affairs and an accountant to help you understand the tax ramifications of investing. The more support you have, the better you will be able to handle the problems that come your way.
Whatever you do, understand that buying investment property is an entirely different experience than buying your primary residence. When you go to buy your own home, you usually have emotions in it.
NOW, do you know that with just N300, 000 you can buy a plot of land around Covenant University Ota, Ogun State? Well if you are interested Call DEDON INTERNATIONAL VENTURES: 07026014274, 08037270654, 08187482437.
DEDON INTERNATIONAL VENTURES is a company duly registered and existing under the laws of the federal republic of Nigeria. They are registered with Corporate Affairs Commission (CAC).
Visit their blog: www.dedonventures.blogspot
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