It is a known fact that Real Estate Investment has proven to be one of the most profitable long term investment in the world today and over centuries past. This sector has constantly given birth to millionaires as well as billionaires.
In Nigeria today, the story is not different. Many top millionaires and billionaires have rely on this industry not just to edge their wealth against inflation, but also to greatly multiply it. This has also gained the attention of new investors daily, looking for a safe way to multiply their wealth.
However, most new investors have not been able to avoid some pitfalls in real estate investment. We have put together 10 factors to consider before buying lands in Lagos as well as other parts of Nigeria, to help both new and old investors overcome some possible pitfalls in real estate investment.
1. LOCATION: Location is the number one thing to consider when buying a Land anyway. Although there are various reasons that makes people buy land, the location will determine what value the land will be in the nearest future. So first consider if the location suits your purpose of buying. We will expound on this later.
2. LANDMARK AND NEIGHBORHOOD: A landmark literally meant a geographic feature used by explorers and others to find their way back or through an area. In modern usage, a landmark includes anything that is easily recognizable, such as a monument, building, shopping malls, schools, or other structure. These landmarks often form the neighborhood. You need to check who are going to be your neighbors before buying land. Your kind of neighbors can make your land more or less valuable in the nearest future. For example, if you are neighbors to where lots of people are attracted to maybe due to a popular mall, beach, recreational centre, church or mosque, etc. This can influence the rate at with your land will appreciate. Also, for someone who prefers a quite neighborhood, you need to check who your neighbors are going to be before buying land.
3. ENVIRONMENT: Checking the environment will help to know if the land you want to use for whatever purpose is safe for that purpose. For example, when buying land for residential purposes, consider if that environment is safe to live around, as you don’t want to live in a polluted environment. Similarly, the land you intend to use for factories or other kinds of businesses, may not be suitable for areas clearly mapped out for residential.
4. ACCESSIBILITY: While buying a land always check the accessibility of the land to a major road, town, City centre, etc. This is very key. This can also affect the resell value for those interested in land banking. Also, for those interested in building office spaces, residential house, shopping malls, etc. Make sure it’s accessible to other popular places, cities, and with good roads with easy access. This will not just command a good resell value, but also and good rental income for you.
5. SECURITY: You need to know how secure the area you are planning to buy land is before buying land there. Also check if the community itself has a way of tackling security challenges. Buying land within a propose estate or already existing estate with adequate plan for security, or close to state owned security agencies, are some of the ways to ensure you will be secured.
6. ZONING RESTRICTIONS: It is important to know the zoning permits of the area you are trying to buy land, as this will help you to know what government town planning preference is for that area. You will not be allow to build a factory where Government has already mapped out for residential. Also, the type of structure permitted in that area. For example, in some areas in Abuja, there are areas mapped out for 3bedroom duplexes and 4bedroom duplexes. In such areas, you cannot build a bungalow. You can only build what is permitted in that location. This helps to organize and beautify cities.
7. SOIL QUALITY AND COMPOSITION: Soil composition will determine how you will build your new house. The kind of foundation that will be required to raise your desired structure. This will tell you the additional money you need to spend on the land when the time comes. If you are interested in building a bottle water factory, or anything that has direct relationship with the nature of the soil, then this is an important point to take note. For example, the kind of foundation required to build a house in Onitsha is different from that of Asaba. Similarly, that of Lagos Island is different from that of Lagos mainland. So it will not be out of place to find out the cost of construction on that soil type, and put it into consideration before buying land.
8. SIZE OF THE LAND: You need to also check to know if the size of the land corresponds with what the seller says it is. The only way to do this is to get a surveyor who will come and survey the land and get the actual measurement. And also, to check if the size of the land is suitable for the kind of house you wish to build. You can speak with an architect to recommend the size of land that best suits your type of building. This is to avoid issues with disapproval of building plans, waste of time and finances.
9. LEGAL DOCUMENT & TITLE: After you have checked the above list, the next thing to check is the legal documents that the land has, by this I also mean the title of the land. The main document to check for is the Survey plan, Deed of assignment, or if any of these titles such as Excision, Gazette, Certificate of Occupancy (C of O), Right of Occupancy (R of O), Governor’s Consent, etc. is available. Some of these titles differs from State to State. You will need the services of a professional (e.g. Lawyer, Real Estate Consultant, Estate agent) to help interpret the meaning of these documents. Click HERE to reach our trained Real Estate Consultant today.
10. PRICE OF THE LAND: I decided to leave this till you have checked to confirm other things I have listed above first as they will determine what the price of the land should be. For example land without any title can never be priced the same as land with any of the approved titles like C of O. Because each of this title cost money to obtain. Therefore, the seller will definitely add it to the cost of the Land when selling it to you.
I hope this brief write-up will help you in making a good decision. If you find this information helpful, share the link to this page to help save others as well. You can subscribed to get helpful information like this regularly, and also follow us on social media with the link(s) below this page.
Click HERE to check out the list of genuine properties in Nigeria that best suits various purposes.
Thanks to Seun Oduntan for his contribution in putting this together. You can also chat with our team of real estate consultants on whatsapp 08155346105, to get good places to invest.