As a kid, I heard that investing in real estate in Lagos can be a lucrative venture due to the city’s growing population and robust real estate market.
And even in the last five years, everything has gone explosive.
So you think about how people are building luxurious homes and buying a landed property.
Pretty much everyone knows that buying property in Lagos is a great investment.
Almost every investor sees their return on investment in less than 3 years.
And here is the kind of property portfolio you can also buy.
Residential Properties
Investing in residential properties such as apartments, duplexes, or single-family homes.
These can be rented out or sold for a profit.
Rental property is one of the most popular ways to build wealth and generate income in real estate.
Among the many types of real estate investment, rental properties are a popular option for those looking to generate passive income.
However, not all rental properties are equally profitable.
Before we can identify the most profitable type of rental property, we need to understand the factors that affect rental property profitability.
Some of the key factors include:
- Location: The location of a rental property is one of the most important factors that affect its profitability. Properties located in desirable areas with high demand will typically command higher rents and appreciate in value over time.
- Condition: The condition of a rental property is also important. Properties that are well-maintained and have modern amenities are more likely to attract high-quality tenants and command higher rents.
- Property Type: The type of rental property also affects its profitability. Different types of properties have different expenses, cash flows, and investment requirements.
Commercial Properties
Purchase or develop commercial properties like office buildings, retail spaces, or warehouses that can generate rental income from businesses.
Before you venture into commercial property, you need to understand zoning.
Zoning is the way that a city or town divides land into different uses.
It can determine whether you can build on a piece of land or not, which business can operate there, and for how long.
Zoning also determines what kind of business will be allowed to operate on that particular piece of property.
If it’s commercial, then no residential units are allowed.
The best way to learn about zoning is through education at your local planning department but if you are short on time(or have other priorities), here are some basic tips:
- Know what type of use each zone allows before buying any commercial property.
If you are looking for an investment property with potential income streams beyond rent payments from tenants.
Look into whether the current zoning allows mixed-use developments like apartments above shops or offices above warehouses.
Something similar might work well in your area.
Land Banking
Purchase undeveloped land in strategic locations with the potential for future development and hold onto it for appreciation.
A land bank is a practice of purchasing and holding land as an investment.
The most common use of land banking is to buy up properties in areas that will experience rapid population growth in the future.
Such as urban areas near major transportation hubs and in the suburbs of cities.
Once the area is developed, the land bank can often sell the property for a large profit.
On the other hand.
The primary benefit of land banking is the ability to generate large amounts of cash very quickly.
This makes it a popular choice for investors who need capital but don’t want to put in the time and effort required to develop a property on their own.
Mixed-Use Developments
Investing in mixed-use properties provide combine residential and commercial elements, providing a range of income streams.
Real Estate Investment Trusts(REITs)
If you consider investing in REITs, it allows you to own shares in a diversified portfolio of real estate assets without directly owning properties.
Real Estate Crowdfunding
Participate in real estate crowdfunding platforms that pool funds from multiple investors to finance real estate projects in Lagos.
Real Estate Development
Engage in property development by acquiring land, obtaining necessary permits, and constructing buildings for sale or rent.
Rental Apartments
Build or acquire rental apartment complexes to provide affordable housing solutions to Lagos residents.
Vacation Rentals
You can purchase properties in popular tourist areas and convert them into vacation rentals or short-term accommodations.
Real Estate Investment Clubs
Join real estate investment clubs or associations to network with like-minded investors and explore potential investment opportunities.
Real Estate Flipping
Engage in property flipping by buying distressed properties, renovating them, and selling them at a higher price.
Flipping land is a great way to earn money, but it can be difficult to get started.
More importantly, it doesn’t require repairs or renovations and has higher profit potential.
Another point is that flipping land or land flipping is profitable because it is easier to get started and lower in cash investment than home flips.
Here are some important points to know:
- Land flips are easier than home flips because you don’t have to deal with the hassle of repairs or renovations, which can be expensive and time-consuming.
Furthermore, you don’t have to worry about finding tenants or paying for utilities like water or electricity when you are starting out on your real estate journey.
- The market is stable – there’s less competition for deals so prices tend to stay high for longer periods of time(especially if there’s been an economic downturn).
This means that when something goes wrong with a property(such as maintenance issues).
The owner doesn’t have much trouble selling the property quickly at a higher price point than they paid originally.
Conclusion
Remember, before investing in real estate in Lagos.
It’s important to conduct thorough market research, seek professional advice, and carefully assess the risks and potential returns of each investment opportunity.