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WHAT ARE THE LEGAL GUIDES THAT YOU NEED ON REAL ESTATE INVESTMENT IN NIGERIA
Before you invest in real estate, here are the legal guides that you should know.
CHAMAN LAW FIRM
5/11/20243 min read
WHAT ARE THE LEGAL GUIDES THAT YOU NEED ON REAL ESTATE INVESTMENT IN NIGERIA
A real estate investment is a financial strategy that involves the management, ownership, purchase, rental, and/or sale of a property for profit. Real estate investment is the process of purchasing and reselling for a profit quickly. It is one of the smartest investments one can make, and it requires little to no effort on the part of the owner. Although, it requires huge start-up capital, you would need a substantial amount of money if you want to make hundreds of millions, but you can start small by buying just one plot and with time, buy more plots and acres and keep selling them all year round.
Owning a property is one of the rights of a Nigerian as contained in the Constitution. However, the 1978 Land Use Act gives state governments control over land within their borders. There are also lands that are owned by the state for public infrastructures and purposes and those lands cannot be used by individual or land owners for residential and commercial purposes. Buying land is not just outright purchase like buying any item in a shop where you just pay, take the item and leave, for lands, there are certain processes before you can be said to have a title to the land.
How To Invest in Real Estate in Nigeria
1. Rental Properties:
Renting Properties is a very lucrative way of investing in real estate. You purchase a property and then rent it out to tenants who will stay in the house and in turn pay an agreed sum over a period of time. It is important to note that the landlord is responsible for paying the costs of maintaining the property.
Importance:
- Provides regular income as the rent are paid annually or an agreed stipulated time
- Properties can increase in value: As the commercial value of the property goes up, there is every tendency of the rent being increased.
- Leverages capital to maximize returns: Though a substantial amount of money is spent to build the house and make it look attractive, in the long run, you will earn more money from the house.
Challenges:
- Managing tenants can be tedious
- Tenants could potentially cause damage to property knowing it is the duty of the landlord to maintain his building.
2. Property Development:
Property development is a very capital-intensive industry. In this case, properties are acquired in nice spots, redeveloped into luxury apartments or commercial structures and then sold at a really high-profit margin. A good location is very critical when considering property development.
For example, places like Lekki in Lagos, most of the houses were acquired by property developers, built exquisitely to taste and is being resold for hundreds of million.
3. Real Estate Agency:
The real estate agents are one of the most important part of the real estate sector in Nigeria.There is always a bridge between the Landlords and tenants or the Property Developers and Prospective house buyers. This bridge or middleman are the real estate agents. They help in marketing and advertising your houses, thereby bringing prospective clients to you. A real estate agent must be up to date with prices of houses in a certain location, the houses available in order to help both the client and the land owner or developer.
If you’re looking to invest in real estate, you should put some steps into consideration.
1. Do Your Research
2. Decide On The Specific Property Market
3. Identify Booming Real Estate Markets
4. Get The Details Right
5. Know The Law
A very good legal advice is that when buying or leasing properties, remember to put every agreement into writing as an oral contract will not be enforceable if there is a breach on any side. Also be sure to involve lawyers, so as to be sure you have a good title to the land or house because any body that has a better title than you to the house has more priority in law. Finally, when everything has been finalized, be sure to register your property in the state land registry and perfect your title, you will be guided on this by your legal counsel.
