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Thinking about how best to invest in real estate?

Have you invested in real estate before?

If you have, good for you!

If you haven’t, I can bet it’s probably because of one of these two reasons

It’s either because you ‘think’ you don’t have enough money yet

or you’ve probably heard so many scary stories about losing your money when you invest in real estate, so you’ll rather stay away for now.

Those were my reasons too until I attended an insightful seminar on how best to take advantage of real estate investment opportunities in Nigeria.

I learnt some key principles at the seminar and to be honest, I am more excited about what I learnt now because I got the opportunity to implement them recently.

I manage a real estate  investment club in Lagos, Nigeria. We’re in our 9th month of contributions and managing the investment club has helped me gain a deeper understanding of all the knowledge I had gained over time

Understanding is a higher form of knowledge and you gain understanding when you get skin in the game.

There’s a difference between learning how to run a business and actually running a business. It’s the same way with investing in real estate.

The experience you get from implementing knowledge is the game changer.

So, here’s the deal,

If you think you don’t have enough money to invest in real estate today, I have got an idea for you.

Start an investment club! (I’ll bet you knew that was coming)

I am an advocate of collaborating to create income beyond the paycheque and an investment club is a perfect way to join forces with others to take advantage of investment opportunities.

Joining forces with others to invest provides a great way to take advantage of the power of many, especially in real estate, and that’s because you can negotiate a better deal on the cost of real estate.

When we started the real estate investment club, we received quite a number of proposals from real estate companies showcasing opportunities in Lagos. This put us in a strong position to negotiate favorable terms with the companies.

First principle – Always negotiate every deal. Ask around for the cost of similar real estate in that neighborhood and make it a sweet deal by bringing your friends to the party to invest.

When I learnt the principle of negotiation, I tried to practice it, but I was never in a strong position to negotiate all by myself. This time around, it was a no-brainer. Any real estate company would prefer to sell to 20 or more people at once at a slightly lower price than to sell at a lower price to one person.

When you negotiate a good deal, you also get the opportunity to earn equity on your investment. For instance, if the value of a piece of property/land is 5m, you can negotiate to pay 10-20% less for 20 slots. If you decide to sell at the original sale value, you immediately earn income (500,000 – 1m in numbers) on that piece of property.

Second principle – Always seek an opportunity to ‘make money on the buy’.  The popular way to invest in real estate is to invest and hope the property/land appreciates in value so you can make money when you sell. However, you can earn immediate equity when you make a purchase by paying less than the market value.

Third principle-  Always look out for key factors that will ensure continued appreciation in the value of your real estate over time. The key factors are population and development.

When there is a steady growth in population or demand for real estate in a particular area, the value of that property/land will continue to appreciate in response to demand.

Infrastructure development leads to appreciation in the value of real estate. In emerging countries in Africa, core infrastructure that drive value include a good road network, shopping malls and schools.

Different factors may drive the value of real estate in more developed countries. Sometimes , it depends on the specific economic condition or outlook for that country.

This week, explore opportunities to get started investing in real estate.

Don’t let your excuses keep you from taking advantage of opportunities. These principles will help you get started on the right foot.

On a final note, if you’re scared of losing your money, make sure you work with certified real estate professionals in your country. They will help you make the right investment decision.

 

 

 

 

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