The Dangers Of Buy And Leave Culture In Real Estate

As of today, Nigeria is West Africa’s most populous country with the United Nations projecting the country’s population to exceed 400 million by 2050 making it one of the fastest-growing nations globally.

While this massive population presents a significant opportunity for real estate investment, driven by its rapidly growing population and increasing demand for real estate housing, it has also widened Nigeria’s housing deficit, with the Federal Mortgage Bank of Nigeria (FMBN) estimating a shortage of over 28 million housing units.

Ironically, in the midst of this housing shortage, there are thousands of unoccupied buildings lying across parts of the country in need of occupation. Talk of scarcity in the midst of plenty! Vacant real estate properties are a common sight in many parts of Nigeria and even though many owners might claim to have good reasons to leave their houses empty, the dangers of this action are quite significant. Indeed, someone argue that the cost of keeping a real estate property (especially rental properties) vacant is much more significant.

In this article, the dangers of buy and leave culture in real estate we will explore the reasons why people leave properties empty, the associated dangers of buy and leave culture in real estate, and how property owners can profit from real estate assets they are not currently using.

Why Do People Leave Real Estate Properties Unoccupied?

There are several reasons why individuals in Nigeria might purchase real estate properties and leave them vacant. One common motivation is the expectation of rising property values, that is, value appreciation.

In Nigeria, many investors buy real estate as a long-term investment, hoping that the property’s value will appreciate over time. By holding onto the real estate asset rather than renting it out, they believe they can maximize their return when they eventually sell. This strategy is particularly popular in rapidly developing areas where land and property prices are expected to surge. For this reason, it is common to see vacant buildings in many developing areas of places like Lagos and Abuja.

Another reason is -wait for it! – the fear of becoming a landlord. For some real estate property owners, buying a house is like getting married- it’s an adventure filled with fear of the unknown. In truth, managing tenants, dealing with maintenance issues, and ensuring compliance with legal requirements can be daunting tasks. For some property owners, the perceived hassle outweighs the potential income from renting out their property; hence, they do not see the point.

Additionally, there are cases where owners inherit properties but have no immediate need or desire to utilize them, leading to prolonged vacancy.

Then there are also real estate properties that are under government scrutiny/legal issues. For many properties that are subject to corruption investigations or legal tussle, there is a high chance that the owners leave them vacant atleast until pending cases are resolved.

In addition, some houses are vacant because they are considered just too expensive for people to rent. A recent survey indicates that a massive demand, high construction costs and poor market research by developers has resulted in a wave of new two-and – three-bedroom houses that few people in Nigeria need or can afford.

Finally, some real estate owners adopt a “wait-and-see” approach, holding onto their properties until they identify what they consider the best use for them. Whether it’s waiting for the right buyer, planning renovations, or considering alternative uses like commercial development, these delays often result in properties sitting idle for months—or even years.

The Dangers of Leaving Real Estate Properties Vacant

Even though there are no obvious risks to leaving properties vacant, the reality is quite different. Unoccupied properties face numerous threats that can lead to financial losses, legal complications, and safety hazards. Below are some of the most significant dangers associated with leaving properties empty:

1. Increased Risk of Theft and Vandalism

Vacant properties are prime targets for criminals. Without occupants to monitor the premises, thieves may attempt to steal valuable items such as appliances, air conditioning units, copper pipes, wires, and other fixtures. Vandalism is another concern; abandoned buildings often attract vandals who damage walls, break windows, or deface the structure. These acts not only reduce the property’s value but also create additional repair costs for the owner.

2. Structural Degradation

An unoccupied property is more susceptible to structural deterioration. Plumbing systems, for instance, can suffer from leaks or burst pipes if water is left stagnant for too long inside them. Electrical systems may malfunction due to disuse, while roofing materials can degrade faster without regular maintenance. Over time, these issues compound, potentially rendering the property uninhabitable and requiring costly repairs.

3. Fire Hazards

Fires pose a serious risk to vacant properties, especially those with faulty wiring or gas lines. Since no one is present to detect smoke or flames early, fires can spread quickly, causing extensive damage or even destroying the property entirely. Moreover, insurance companies may deny claims if the property was found to be inadequately maintained or secured.

4. Water Damage

Another danger of unoccupied buildings is leaking roofs. Also, clogged gutters, and broken pipes can cause severe water damage in unoccupied homes. Mold growth is another consequence of prolonged dampness, which not only compromises the building’s integrity but also poses health risks to future occupants. Addressing water-related issues after months of neglect can be both expensive and time-consuming.

5. Community Impact

Empty properties negatively affect surrounding neighborhoods contributing to urban decay, lower property values, and increase crime rates. Residents living near abandoned homes may feel unsafe, and businesses in the area could struggle due to reduced foot traffic. Making reports about empty properties is considered a civic duty because when the issue is addressed, the entire community benefits.

6. Legal and Financial Consequences

There are legal and financial consequences to leaving your property unoccupied.

Property taxes and utility bills must still be paid, regardless of whether the property is occupied or not. Failure to meet these obligations can result in penalties, liens, or even government seizure of the property. Furthermore, insurance premiums for vacant properties (if they have) tend to be higher, reflecting the increased risks involved.

How to Profit from a Property You Are Not Using

Despite the challenges outlined above, owning an unused property does not mean foregoing all opportunities for profit. With proper planning and management, property owners can generate income and mitigate the risks associated with non-occupation. Here are some strategies to consider:

1. Rent Out the Property:

One of the simplest ways to profit from an unused property is to rent it out. Depending on its location and condition, you can target different types of tenants—residential, commercial, or short-term (e.g., Airbnb). Renting provides a steady stream of passive income while ensuring the property remains occupied and well-maintained. To address concerns about property owner responsibilities, consider hiring a property management company to handle day-to-day operations.

 2. Convert It into a Business Space

If your property is located in a bustling area, converting it into a commercial space can yield attractive returns. Options include opening a retail store, office, warehouse, or co-working space. Alternatively, you can lease the property to entrepreneurs looking for affordable commercial spaces. This approach not only generates revenue but also contributes to local economic development.

3. Use It for Storage

Unused residential or commercial properties can double as storage facilities. Many people and businesses require extra space for personal belongings, inventory, or equipment. By offering secure storage solutions, you can earn consistent income while keeping the property functional and monitored.

4. Explore Joint Ventures

Collaborating with developers or investors can unlock new possibilities for your property. For example, you might collaborate with someone interested in renovating the space for resale or transforming it into a boutique hotel. Joint ventures allow you to share the costs and responsibilities while benefiting from shared expertise and resources.

5. Leverage Technology for Remote Monitoring

To protect your property against theft, vandalism, and environmental hazards, invest in smart home technology. Install security cameras, motion sensors, and automated lighting systems to deter intruders and monitor the premises remotely. Regularly scheduled visits by maintenance staff can also help identify and resolve minor issues before they escalate.

6. Participate in Community

Engaging with local authorities and community groups can provide innovative ways to utilize your property. For instance, you could temporarily offer it as a venue for events, workshops, or charity programs. Such initiatives enhance your reputation within the community while generating goodwill and potential networking opportunities.

7. Sell Under Favorable Conditions

If you would rather not follow any of the above suggestions, then you may consider selling it under favourable conditions, that is selling when the market seem right and you are not under any obligation to sell. Being under obligation, say you desperately need money might result in selling at lower value than you would normally sell. So, as a last option, consider selling when the prize and conditions are right.

Conclusion

Leaving your property vacant often-present challenges such as security vulnerabilities, environmental degradation, continuous financial burdens and unforeseen negative impacts on the community. However, you can address these issues by actively managing the property through re ting, repurposing, participation in community initiatives or outright sale, thus transforming potential liabilities into profitable ventures.