Despite the nation’s economic downturn due to the COVID-19 pandemic, there are still opportunities for investment in residential or commercial properties in the local real estate market.

At the REFin Homes Limited maiden webinar series on real estate investment, the guest speakers, Mr Hakeem Ogunniran and Mr Damola Akindolire, shared several eye-opening ideas for anyone serious about investing in real estate.

To put this in proper perspective, real estate investing is the purchase, ownership, management, rental and sale of real estate [land, buildings, housing] or an interest in real estate for profit. It could be done directly or via joint ventures with a real estate company.

Real estate investment comes with several benefits even if it is your first time investing, which are

Scope of Capital Appreciation

This refers to an increase in the property value over time, mainly resulting from inflation or the changes in the supply and demand forces in the real estate market. When making a buying decision, it is good to consider the prospect of capital appreciation and not just the yield.

Income Stream

Putting the property up for rent can provide the investor with a steady and consistent income from the investment.

Leverage and Tax Shelter

Opportunity for leverage, depending on personal borrowing qualification with a financial institution. A tax shelter is a vehicle used by individuals or organizations to minimize or decrease their taxable incomes and, therefore, tax liabilities. This should not be confused with the illegal practice of tax evasion. Real estate investments are all examples of potential tax shelters.

The Following Rules are Golden for Real Estate Investment especially for First timers

1. Location

You have to choose the right location, especially when you are making a direct investment. Things to find out

How many people live there?

Are there schools in the environment?

Is the location accessible?

2. Return on Equity

You need to be sure there will be a return on equity from your investment, not just a return on ego or emotion. What is in it for me, you might ask?

3. Compliance

This is critical, significantly when investing in a place like Lagos State. You need to comply with all laws and regulations binding on the location of your chosen property. In the long run, the cost of compliance, when not followed, is usually more expensive.

4. Obtain the Perfect Title

Getting all the necessary documents like the Governor’s consent, registration and stamp duties are essential.

Opportunities

The housing shortage is still high in Nigeria, which is a good opportunity for investors to leverage. Building residential apartments and shops will always be in demand because of the shortage.

Land banking is another good investment opportunity for first time investors which could be achieved by buying land to hold or Investing in a real estate investment club or collective investment scheme planning to own land assets.