NIGERIA REAL ESTATE: 5 POWERFUL STRATEGIES TO INVEST FROM THE DIASPORA
Nigeria Real Estate: What Nigerians in the diaspora seeking to invest in real estate in Nigeria should know before making the move.
In recent years, the Nigeria real estate sector has experienced remarkable expansion, presenting an enticing opportunity for investors, particularly those in the diaspora to create lasting wealth. Experts have attributed the growth of the Sector to a combination of various factors, including the consistently growing population, rapid urbanization, and the country’s expanding economy. For example, while some see Nigeria’s rapidly growing population as a potential catastrophe, it portends a positive development for the real estate sector as it translates to an ever-increasing demand for properties.
In Nigeria, the demand for both residential and commercial properties to accommodate the housing needs and business ventures of citizens continues to rise. This demand has led to a surge in construction activities across the country, with developers striving to meet the growing appetite for real estate investments. This, including the ongoing urbanization trend and appetite for luxury, means that an investment in Nigeria real estate sector in the country is almost guaranteed to yield positive returns.
Consequently, investment-savvy Nigerians, home and abroad are keen to capitalize on this trend by investing in Nigeria real estate to cater to the needs of the population.
Specifically, Nigeria Real Estate Investment Opportunities include:
i. Residential Real Estate: Residential real estate is in hot demand in many cities in Nigeria. Demands for apartments, duplexes, and single-family homes are largely unmet making the market ripe for more investment. The rental market presents a steady income stream for investors, with the potential for long-term capital appreciation.
ii. Commercial Real Estate: Office spaces, retail outlets, and warehouses play vital roles in Nigeria real estate. By strategically placing yourself in the mix, you can make good returns renting out apartments for commercial use.
iii. Mixed-Use Developments: Integrating residential, commercial, and recreational spaces appeals to a diverse range of tenants and buyers. These developments contribute to the creation of vibrant and sustainable communities.
However, while investing in the sector as a Nigerian living in Nigeria has its inherent risk (like any other investment), investing from abroad as a Nigerian presents peculiar risks and challenges which one must carefully navigate in order not to make wrong investment decisions.
The following are strategies that you can explore as a Nigerian abroad to safely invest in Nigeria real estate sector for good returns:
- Understand the Nigeria Real Estate Market
Before you take a foray into Nigeria real estate, you as a Nigerian in the diaspora must familiarize yourself with the Nigeria real estate market. The market in Nigeria offers diverse investment options, ranging from residential properties to commercial developments. Lagos, Abuja, and Port Harcourt are key cities with high demand for real estate due to rapid urbanization and population growth. Recent entrants into the high-growth areas include Oyo State and Ogun State. Low-cost housing or what we call mass housing development are however gaining ground in states in the northern part of three country to cater for the low income earners.
Some of the areas of your market research and due diligence must include understanding the:
i. Legal and Regulatory Framework: As an investor, you should be aware of local regulations of each area in order to ensure compliance with property acquisition and development processes when investing in Nigeria real estate
ii. Factors that determine property values: In each State or locality, some peculiar factors determine property values. Examples are power supply and infrastructural developments amongst others. In an area where power supply is poor for example, prices of rental apartments may be lower because of low demand compared to areas with constant power supply. The same applies to road networks and access to major markets.
iv. Fluctuations in the exchange rate and how they affect investments must also be duly researched if you are a Nigerian abroad.
In essence, carry out due diligence to know your market before putting your money in Nigeria real estate. Often times, Nigerians in the diaspora fail to familiarize themselves with the local market and end up full of regrets when they lose money.
I know of a Nigerian who has been abroad for over 20 years but maintains a strong connection to his roots in Southwest Nigeria. Over time, his desire to retire home in Nigeria propelled him to buy a property in Lagos through an agent. Without an in-depth knowledge of the local market, he was scammed by the so-called agent of over 50 million Naira. That singular event derailed his plans to return home. Unfortunately, he is not alone in this category. That is the more reason why you have to be careful before investing from the diaspora.
2. Leverage Professional Services:
Failure by many Nigerians in the diaspora seeking to invest at home to leverage professional organisations to transact their business always ends up in regret. A case in point is the story of the man I shared earlier. Seeking guidance from legal, financial, and real estate professionals often goes a long way in enhancing the safety and success of diaspora investments. Lawyers can review property documents and facilitate transactions, while financial advisors can offer insights on funding options and tax implications. Real estate agents familiar with the local market can assist in property selection and negotiation. There are many reputable real estate firms in Nigeria that could be consulted to facilitate property investments.
In fact, the need to engage a reputable real estate company to facilitate your investment in Nigeria real estate cannot be overemphasized. Your chances of achieving your investment target as a Nigerian in the diaspora is greatly enhanced when you collaborate with a reputable firm such as PWAN Stars.
PWAN Stars is one of the most dependable names when it comes to real estate solutions in Lagos Nigeria. The company is renowned for its integrity, transparency, and commitment to delivering quality properties. Currently, several estates of the company are spread around Sangotedo in Lagos State offering smart options for Nigerians at home and abroad to invest without tears. Clients are currently enjoying the benefits of their investment in products such as The Edifice Apartments, The Statement Residences, The Cynosure Apartment, amongst others.
The Edifice Apartments by PWAN Stars is one of Nigeria’s most reliable real estate firms, epitomize luxury living at an affordable price point. Comprising 12 units of premium modern design, the Edifice Apartments, Sangotedo, offers a contemporary lifestyle tailored to meet your needs as a potential investor in properties in the area. It’s definitely worth considering if you are looking for a great investment with peace of mind.
Another great choice when considering investing in Nigeria from abroad is The Statement Residences – an innovative off-plan development also strategically situated in the heart of Ajayi Apata New Town, Sangotedo.
Additionally, The Cynosure Apartments, situated Off Monastery Road in the vibrant Sangotedo area of Lagos, Nigeria, is an architectural marvel offering a selection of 1, 2, and 3-bedroom apartments tailored to accommodate various lifestyles and family sizes, allowing you to buy and rent it out at good income.
If you are a Nigerian in the diaspora looking to invest in lands for future returns, Grandeur Peninsula situated in Abijo GRA is a must-have. Primed to be transformed into an exquisite and tastefully finished estate, Grandeur Peninsula is very competitive and decently affordable.
By partnering with established firms, like PWAN Stars, you as an investor can minimize risks associated with fraud and ensure the security of your investments no matter how long you stay abroad.
3. Conduct seller Verification
Ensuring the authenticity of a seller is paramount, whether you’re engaging with individual sellers or established real estate firms. Verifying the credibility of the seller protects your interests and promotes a transparent transaction process. One effective method to conduct seller verification is by consulting the Corporate Affairs Commission in Nigeria, where you can validate the seller’s business registration and credentials. Additionally, leveraging online resources to conduct thorough research and scrutinize reviews about the seller can provide valuable insights into their reputation and track record. By employing these meticulous verification measures, you can confidently proceed with your transactions, knowing that you’re dealing with reputable and trustworthy sellers.
4. Use Secure Payment Option
It is highly recommended that you prioritize non-cash transfers whenever you are conducting property transactions, as they offer a higher level of security and transparency. Opting for electronic transfers whenever feasible enables seamless tracking of transactions, providing a clear audit trail for accountability. Especially when managing transactions from abroad, leveraging electronic transfer methods is not only convenient but also ensures efficiency and reliability in payment processing.
However, in instances where cash transactions are unavoidable, it is crucial to document the transaction meticulously. Consider capturing photographic evidence of the exchange or maintaining detailed records to safeguard against potential disputes or denials of the agreement in the future. By proactively documenting each transaction, you establish a concrete record of the deal, mitigating the risk of misunderstandings or discrepancies down the line.
4. Diversify your investment
In addition to conducting due diligence and partnering with reputable real estate companies, you should invest in diverse Nigeria real estate assets across the country. Adopting a diversified approach to real estate investment to mitigate risks and optimize returns is a strategy that smart investors use to fail-safe their investments. Instead of focusing solely on one type of property or location, consider diversifying across different asset classes and geographic regions. This strategy ensures resilience against market fluctuations and maximizes long-term profitability.
You could also spread your portfolio by investing in different real estate asset types such as residential properties, commercial properties, land and mixed developments. This helps you to spread the risk and maximize returns over a long time.
5. Monitor your investment
There is a saying that when you are not informed, you are deformed. As an investor putting in millions of Naira investing in Nigeria real estate you must remain up to date on happenings in the industry. Monitor and manage your real estate portfolios. Regular communication with property managers, tenants, and local agents helps address any issues promptly and ensures that your investment does not go down the drain. Additionally, staying updated on market trends and regulatory changes enables you as an investor to adapt to strategies as situations demand.
Conclusion
For Nigerians in the diaspora, nothing beats having profitable real estate investments in your home country. Apart from the sentimental and emotional value of being attached to your roots, the potential returns on investment is also quite compelling.
No doubt investing in Nigerian real estate from the diaspora presents promising opportunities for wealth creation and portfolio diversification. By employing strategic approaches such as engaging reputable companies, conducting thorough due diligence, leveraging digital platforms, and seeking professional advice, Nigerians in the diaspora looking to invest back home can navigate the complexities of the market and achieve their investment goals. With careful planning and prudent decision-making, real estate investment in Nigeria can yield substantial returns and contribute to long-term financial success.
