What City People Found Out
The year 2024 has not been fair to the real estate sector in Nigeria. The real estate business and it’s players are struggling to survive, as the sector has been badly affected by inflation, especially.
But Nigeria’s real estate sector remains an attraction for investors, both local and international.
Investment choices in Nigeria are infinite and for a country that has been struggling with its worst GDP growth in recent times, it is important to rely on secure investment choices.
One thing that is very good about real estate business in Nigeria is that the investment opportunities it presents are so diverse, there is something in it for everyone and you grow in the business, you can also expand your portfolio.
You can also diversify if a particular strategy seems not to be working.
There are basically two things Nigeria’s real estate players now do to remain in business. Because majority of them who are into development are being affected by constant increase in building materials. For example: for many who are doing off-plan sale of property, many have run into debts as a result of sharp inflation recorded recently in the country. Those who are building are suspending it and a lot of real estate players have suspended their projects in the last few years due to this.
But recently, many of them have been coming up with different ideas and have been coming out with different products like land banking and land slipping.
LAND BANKING
Historically, land banking is one of the oldest real estate investment practices. It allows investors to buy small or large quantities of undeveloped land with the intention of profiting from the resale of the land.
Simply put, investors seek land in underdeveloped neighborhoods and bank it until there’s substantial infrastructural development or population growth in the area before selling it for a higher price or developing it to meet the growing housing demand.
In Nigeria, while land banking is not particularly a new concept, not many property firms had brought it to the mainstream of the real estate market with regard to the kind of offerings made to subscribers and clients.
For the most part, emphasis has usually been placed on seeking customers who desire to purchase land and convince them on why owning a piece of real estate is good investment or business. Others have focused on developing for different classes of tenants and, by doing so, cut the housing deficit in the country.
Land banking refers to the strategic acquisition and holding of undeveloped or underdeveloped land to realize long-term appreciation and capital gains. Unlike traditional real estate investment, which often involves immediate development or resale, land banking involves patience and foresight, banking on the inherent value appreciation of strategically chosen land parcels over time. Essentially, it involves acquiring undeveloped land and allowing it to appreciate over time before selling it for a higher price. Another aspect of land banking is purchasing land in areas that are not yet developed, informally referred to as “bush,” and waiting for them to develop before selling them at a better return on investment.
There are many real estate companies who are now into land banking in Nigeria, recently. This is because they could no longer trend in their normal business.. Many of these companies are big property developers but inflation has been a major set back in their business.
LAND FLIPPING
This means buying of land and reselling quickly for a profit. This is one of the smartest investment and it requires little to no effort whatsoever. It basically involves your money as well as an in-depth knowledge of land ownership and the buying and selling process, you are good to go. You would have to have a substantial amount of money however if you want to make hundreds of millions but you can start small by buying just one plot and grow to buy tens of plots and acres of lands and keep selling all year round
Literally, land flipping is when a buyer purchases land from a seller at a low price and then goes on to quickly sell that same land for a profit.
An investor with foresight and a bit of patience is bound to profit by flipping. This is especially true for undeveloped land that is generally less expensive to buy than developed properties. The value of land appreciates by the day.
Land flipping is a type of real-estate investment fit for people who have low start-up capital and still want to reap huge profits within a short time period.
Only a few real estate investors recognize the opportunity in land flipping and pursue it. Hence, buying land spares you the stiff competition that comes with every other property on the market. Plus, as a land investor, you can call your own shots.
