Easiest Ways to Start Real Estate Business in Nigeria
Real Estate Business in Nigeria
Real Estate Business is the most lucrative business niche in Nigeria aside oil and gas. The rapid population growth rate in Nigeria made the real estate sector remain very lucrative as daily people are looking for houses to rent or build a home of their own.
Real Estate niche is very wide with many branches that make up the whole. Now, how do you start a real estate business / investment as a young startup with no huge resources to buy a property? We will be addressing that shortly.
Real estate business require some substantial amount of money to start but you can still start a real estate business with minimal or no money. How? Read on as I share with you the easiest ways to start a real estate business in Nigeria.
To understand primarily what real estate business is all about, Wikipedia defined real estate as the profession of buying, selling, or renting land, buildings, or housing.
To be frank, I do not think the definition is complete so I will elaborate on that definition.
What Is Real Estate Business?
Real estate business is a business entity that deals with the buying, selling, brokering, management or investment on real estate properties.
This definition is wider and more befitting.
As I earlier mentioned, Real Estate is divided into many branches that make up the whole.
Listed below are the various divisions of Real estate business in Nigeria.
- Real Estate Agents
Real estate agent also known as Real Estate Broker or Realtor is someone that acts as a middle man between sellers and buyers of real estate property. Real estate agents connect sellers with buyers. When sales are made, the agent receives his/her commission for successfully concluding the transaction.
- Land resale/flipping
This is a kind of business where you buy land/property at a cheaper rate and resell to get profit. This strategy requires a reasonably amount of money and extraordinary efforts to start. All you need is some money and research knowledge to acquire your first plot of land.
- Property Development
This strategy is simple but costly, all you need to do is buy the property in a good location, develop it into commercial structures or luxury apartments, and sell for a bigger sum of money than the original purchase price. Such kind of business requires much more investments than other forms of real estate businesses, but it can yield a significantly larger profit.
- Property Rent/Leasing
A good way to make money on real estate, you just buy some property and lease or rent it. It is important to purchase the building in a good location, and you won’t struggle for tenants. The occupants will pay you every month or yearly, and you still have the ability to sell this property whenever you wish and at a higher rate.
“In any market, in any country, there are developers who make money. So I say all of this doom and gloom, but there will always be people who make money, because people always want homes.” –
Tips on how to start a successful Real Estate business in Nigeria
- Set business goals
Before formulating ideas on how to start a real estate business, it is important to take time to evaluate and prioritize your plans for the future, both personally and financially. Be sure that the business you are about to launch will align in such a way that will support the goals you hope to achieve.
- Research on the nature of real estate business in Nigeria
How does the sector work? Who are the big players? What exactly do they do? How do they serve their clients? What laws guide operations in the city/state where you want to operate in Nigeria? These questions have to be considered and answered for you to have a clear vision of your direction. Your research can also include learning from those whose real estate business are thriving.
- Make your Real Estate business legal and recognized
Business registration is important, especially in the Real Estate sector. You must register with CAC – Corporate Affairs Commission and get a certificate to operate as a business. There are also associations and agencies that regulate real estate operations in Nigeria. You can also belong to estate developers association like the Real Estate Developers Association of Nigeria.
- Save up Some Money
If you did your research well you must have known the minimum amount of money it will require to get you started depending on the scale at which you choose to start. It is advised that you don’t take a loan to start a real estate business because of the uncertainties that may arise when starting a business.
- Seek investment
Real estate business is very capital intensive and requires huge amount of investment. If you do not have enough it is important that you seek investors. You can look for equity investors that can give you enough leverage at the start and accelerate growth.
- Draft a strategic Marketing Plan
But kicking back to relax when the referrals start coming in is one of the biggest mistakes growing real estate entrepreneurs make. Whether your dream is to become the next Facebook ads guru or a master of Zillow conversions, the only thing you really need to know about marketing is that it’s the one part of your business that never sleeps.
Train yourself on how to think strategically about what’s happening in your market and be ready to offer something of value to your clients, no matter where they come from. Example of a company doing this is Lifetime Developments, a real estate firm constructing the Liberty Market Tower. You can learn more about the developer. The real estate firm is constructing a Tower in Toronto Village Square and they’ve already strategized on how to market the condos and already creating awareness about the building that is still under construction and should be ready by 2021.
- Create a website
No matter how much local marketing you do, you need a web presence to attract and engage online traffic towards your business. It may cost a little money at the beginning , but a solid utilization of SEO on the website that lets you usher those traffic and prospective clients right to you, is a crucial foundation of every successful real estate business.
Once you have this asset in place, you can start moving toward a consistent promotion, maybe through contents development and social media strategy to generate more leads
The website should be functional and interactive, enabling prospective clients to make enquiries, see photos and videos of available options of property when you begin to have them or likely ones that would come up later.
- Create branded items
You should announce to the real estate demand market that you are in business and here to stay. Announce your arrival in the real estate market with the use of handbills, newspapers, real estate journals, radio, television and as much as your budget can permit to advertise.
How to Start Real Estate Business in Nigeria with Little or no Money
So, here are few tips you could use to start a real estate business in Nigeria or own property with little or no cash at hand.
Partnerships are very common in real estate investing. According to Fortune builders, a very common path in real estate investment is through partnerships. What one investor lacks, the other can make up for — and many partnerships will entail one partner finding a distressed property at a discounted price, while the other one uses their credit score and working capital to finance it; just make sure everyone is bringing something to the table.
- Borrowed money
Though it is not advised to start real estate business with borrowed funds, a serious minded individual seeking to start a property business and can have access to free loan with very low interest rate could actually borrow money and invest in a finished property and gradually pay overtime.
For example, a monthly salary earner or business man with steady income inflow could be using part of his salary/earnings plus rent collected from the property to service the loan until the loan is completely serviced.
- Offering a Service or Skill
A lawyer friend of mine in Awka who concentrated as a property attorney always negotiate with clients to be paid with part of a property should he win a case during property tussle.
So if you offer any service and your client owns many plots of lands, you could negotiate to be paid with a land property and should the service offered not up to the property worth, you could offer to pay the balance overtime.
Also Read: Why You Need a Property Lawyer in Nigeria
One can start real estate business using the mortgage strategy. In this method, a small percentage of the total sum is paid and the rest spread overtime while the property is handed over to you. Most times, a mortgage bank is involved. If the borrower stops paying the mortgage, the bank can foreclose. Mortgages are also known as “claims on property“.
- Taking on a Property Owner’s Debt
Another way to own a property with no money at hand is accepting to pay off a debt of a property owner in exchange of the property. Here, the individual who is in debt, and no one willing to buy their property at a particular rate in a particular time could decide to give his or her property to anyone willing to offset their debt. If you have reputation and believe you can sort out their debt but do not have cash at hand, you could discuss with the creditor on how and modality to pay.
Real estate business is very profitable and real estate investment is one of the best investment any serious minded investor must look into. It was investor and multi-billionaire John Paulson who said, “If you don’t own a home, buy one. If you own a home, buy another one. If you own two homes, buy a third. And, lend your relatives the money to buy a home.” With little diligence and prudence, you can confidently and successfully start your own real estate business and grow with time.