Real estate is one of the most profitable forms of investment that readily comes to mind across various sectors today. While a lot of investors and potential investors are aware of this, they have limited the scope of real estate to entail just the acquiring of properties with the aim of selling or renting them out in exchange for cash.
Although this is foundational in the real estate industry, a lot of investors are unaware of the numerous opportunities in this blessed industry, i.e. they don’t know there are other ways to invest in real estate aside the conventional way they are used to.
This post would set the difference between you and them as I would be outlining five (5) investing opportunities to look out for in the real estate industry come 2019. Before we carry on into business of the day, I would want you to know that none of these opportunities I would be listing out would come without its pros and cons.
More so, each would be peculiar to one and the other which means you would have to understand its intricacies by studying them well enough before you can go into the investment properly. Don’t be surprised if you find anyone building a fortune from any of them.
Allow me walk you through these investment opportunities so you can have a general lay of the land.
Considering the number of students on the rise in our higher institutions in relation to the number of hostels available, there is no doubt that one of the best ways to make money in Nigeria Real Estate is by building more hostels. The inadequacy of student’s hostel across our campuses has created a gap for smart investors to capitalize on. Aside from the inadequacy, the deplorable state of these hostels provided by the schools has been a turn off for many students making them chase after private hostels irrespective of its cost. This alone is why investing in student hostels is an indispensable investment opportunity as there would always be students seeking accommodation no matter the cost.
More so, since students tend to have a fixed duration to complete their course of study, rent can be paid annually or biannually. This implies that whether they are on break or not, their payment counts. Aside from the fact that these hostels would require constant renovations, there are more advantages to this investment opportunity some of which include:
- High rates
- Fast return on investment
- Reduced case of owed rent
- Constant availability of students seeking accommodation
The good thing is you don’t have to be an expert to make this happen as all you need is to get the right set of people to handle it
According to Wikipedia, the population of the world is set to increase to 8.5 billion people from 7.5 billion in the next twelve years, 9.7 billion in 2050 and 11.2 billion in 2100 which means there would be more mouths to feed and a higher demand for agriculture. Agriculture and Lands are two complementary items and as such, it is a good investment opportunity for investors to pitch their tents. Aside from the common trend of acquiring lands to carry out crop production and animal farming personally, have you thought of buying lands in bulk to be rented out to farmers in pieces? There are a lot of people who rate houses higher than lands for the sole reason that houses provides its owner with both cash flow and appreciation while lands only provides appreciation.
Little do these individuals know as most farmers are not usually able to raise capital to purchase lands so a better alternative for them would be to rent. This means lands can also provide cash flow. In investing in the agricultural aspect of real estate, there is the need to consider some factors like location, purpose, budget, soil type, etc. Agricultural real estate has the following advantages
- There is a steady cash flow
- There are no cases of damage or a need for renovation
- Lesser market risk
- Appreciation of land
Short-lets are letting opportunities that are usually less than six months. Most times, it is just for few weeks or few days. It is a better alternative to hotels since it provides individuals with the feel of what a house is rather than a lodge. Certain individuals prefer to enjoy the comfort that short term lets provide to paying exorbitant fees to lodge in hotels. Short term lets are usually for people who come around the country for their holiday or for a short business stay. There are not a lot of short term lets in the country and as an investor, you can look into the opportunities it can provide and capitalize on it. As an investor, you can partner with airlines and traveling agencies to list your property for rent to people coming into the country. You definitely would have to consider the location and the type of property you aim to put out for short term let. It is advisable to locate it near tourist centres with easy access to good roads, transport and other basic amenities. More so, this investment type would provide you with a lot of flexibility as you can choose who you want on your property or not.
Social Housing Projects
Social housing is a term given to accommodation opportunities that are affordable and easily accessible to individuals on low incomes or those with one need or the other. While most social housing projects are provided by the government, there are some organizations and associations that also engage in such. These organizations and associations seek the interest of investors to actualize their plans and this is where you get to come in. We cannot ignore the fact that the demand for housing in Nigeria is far above the supply talk more of affordable housing. According to CAHF (Centre for Affordable Housing Finance Africa), Nigeria currently have a housing deficit of 17million, Lagos state should own half of that, which has caused the state government to call on private investors to provide affordable housing units.
As an investor, it is important you access the company or organization you aim to invest with in terms of the ESG (Environmental, Social & Governance) criteria. The essence of this is to identify the possible risks associated with the project and to avoid unhealthy controversies, negative environmental and social impacts. Vices like this if not identified beforehand would have negative repercussion on your business or organization. If the coast is clear, it would definitely be a good source of income considering the number of people who are in need of these housing units.
The best part is, it’s easy to get foreign funds for such project because they are ESG compliant
Investing in property bonds is a gold mine which many investors are not well aware of. Property bonds are issued by developers for proposed projects like a house, shopping plaza, etc. to investors. In reality, property bonds are new ways of sourcing for funds for a project. These developers would sell these bonds to investors who would be refunded their money with interest in due time. Once the project is completed, and it is given out on rent, profit starts to roll in. Benefits of buying property bonds are that you do not get to go through the hassle landlords go through. Some of such troubles include managing tenants and their troubles, you also would be less concerned with the need to repair and renovate the house per time. This means that you are in control of the property being an investor especially if you wield a larger part of the share yet, you are less concerned with the managing and the running of the project. The developers are the ones concerned with this part. So, if you don’t have enough capital to buy your own property but you are willing to invest your little fund then this is for you. Also, if you are so busy with other things and you have extra cash to spare, you can also seek to enjoy the benefits in property bonds.
My end note…
Like I stated earlier, all of these investment opportunities are very profitable yet, it requires a lot of diligence to achieve the desired result. We have only just scratched the surface here so as to give you the exposure you need. While we have provided you with the above-listed investment opportunities, there are still countless opportunities in the real estate. I believe you find this blog post helpful? If so, why not share it?
Kindly drop your comments in the comment section below as I would love to hear from you.