The consistent population increase in the commercial centre of Nigeria has made the real estate industry in Lagos a profitable business venture. The appreciative nature of the industry has also seen the making of different billionaires such as Kennedy Okonkwo and Sijibomi Ogundele.
Despite this, the industry is still unsaturated, and the need for houses and land in the state continues to increase. This makes it a viable business venture for everyone to leverage.
Though with prospects, it can also be challenging if you are not familiar with the terrain of the industry in the state. Let’s consider some areas of generating money in real estate in Lagos, Nigeria.
Real Estate Investment Management
This is an excellent way to make your money work in the real estate industry. Since the sector appreciates in time, you can tap into it by investing. As an investor, you can join, set up and manage a real estate investment management fund.
This can be done through Real Estate Investment Trusts (REIT) and Real Estate Limited Partnership (RELP). These involve joint real estate investments where the investor is not involved in the hassle but gets a return on investment. The process is usually handled by an investment company with a percentage agreement.
Renting of lands and houses
With the search for greener pastures and business opportunities, Lagos state has seen a surge in its population. This calls for the need for accommodations such as living space, shops and lands.
Since shelter is a basic necessity needed by everyone, you can leverage the high demand for it to make money, as the market demand for this will never stop as people will forever need it.
You can rent out your unused land, space or house. If you have lands, you can develop them and lease them. If you do not have the capital to develop the land, you can get investors to build it with an agreement to pay it back. Location, however, matters. So ensure you are in a variable location.
Old house renovation and selling
Due to people’s skepticism towards this idea, only a few people have tapped into it, making it unsaturated. The truth is that if properly done, you can generate huge returns on your investment. However, you can double your investment return if it’s done right.
By its name, it involves buying, fixing, innovating, and renting or selling old houses in high locations. When you buy it at a low price, combined with the cost of renovating it, you will make a profit when selling it. Location matters, so ensure it is in a prime environment.
This is a common trend in Lagos for people who want to make money in real estate but do not have a house to lease out. They, therefore, serve as middlemen. Since people need a home, estate agents help them search for vacant homes and liaise with the tenant on behave of the house owner.
This business arrangement between the house owner and an agent is based on an agreement. The house agent gets a particular percentage for every closed deal. Your percentage depends on the location and type of house you rent. So go for the prime ones.
People are using this method to get returns on investment in Lagos. Especially in the uptown part of the state, such as Ibeju-Lekki. With the high prospects in the areas such as the planned 4th Mainland bridge, a seaport and the Dangote Refinery, people are heavily investing in land properties as the prices are still low.
Once the developmental projects are done, the lands and buildings in the area will have appreciated with more than a 100% return on investment.