Over time, the real estate sector has stood out as one of the most profitable ventures all over the world. This can be attributed to various reasons some of which are: Security of investment, predictable cash flow, the appreciating nature of the land, and tax benefits.

The real estate sector is quite an interesting sector because of its vastness and diversity. Real estate covers the purchase, ownership, management, rental of properties for commercial and residential use, and/or sale of real estate for profit. The diverse nature of this sector makes it easier for people to invest in it.

However, people are oblivious to this fact and as a result, are still holding back because they do not fully understand how investment in real estate works. To understand how real estate works, one must first start from the basics, for instance, it is very pivotal to understand the factors that drive the sector and are four factors that drive the real estate investment in Nigeria.

1. The State Of Naira: The state of the Nigerian currency has affected so many businesses and Real Estate is not an exception. This is because the Nigerian housing and construction industry is heavily dependent on foreign importation for the raw materials used in building. With the fluctuating state of Naira, the cost of purchasing these raw materials and equipment become unstable and makes it difficult for builders to smoothly run their business.

As a result of the high costs of doing business, property developers to remain profitable will have to pass on these additional costs incurred to the market. According to industry experts, the estimated rise in the costs of housing is 25% – 35%

2. Interest Rate: Interest rates play a very vital role in Real Estate. When considering buying a property for a mortgage, the current interest rate must be put into consideration. This is so because the changes in interest rates affect a buyer’s purchasing power. If interests are lowered, it will lower the cost of getting a mortgage to buy the home likewise and vice-versa, all things being equal. In other words, interest rates determine the demand for real estate.

3. Government Policies: Government policies is another factor that greatly influences real estate investment. Examples of government policies that affect the real estate sectors are Tax Credit, Subsidies, and Deductions.

For instance, real estate investors are subjected to multiple taxations, the taxes and levies paid by them include development levy, income tax, building plan approval levy, property tax, land use tax, and we also have cases whereby real estate investors are expected to pay renovation tax whenever they want to renovate their properties. All these put together can either dissuade or persuade people from investing in real estate.

4. Market Demand: First of all, it is pivotal to establish the fact that real estate is always in demand because of constant growth in population and increased unavailability of land. However, sometimes, this demand drops or increases. This is therefore an important factor in the real estate sector. An oversupply of homes or land in a given area usually results in a drop in prices while an overdemand usually results in the rise of prices.

5. Demographics: When the word demographic is being mentioned, a lot of interpretations come to mind but what does demographic truly mean and what role does it play in real estate? Demographics describe the composition of a population of a particular group.

Demographics are a huge determining factor in real estate investment because they determine the market trends. For instance, Baby boomers who were born between 1945-1964 are an excellent example of how demographics change real estate. The transition between these boomers to retirement led to more generational trends.

If time can be dedicated to properly understanding these factors and the roles they play, then investing in real estate becomes easy to maneuver. It becomes trouble-free for interested parties to explore the potentials of real estate.

Great write up!

kristonium:
Great write up!

Thank you.

Interesting

Real estate is a gold mine...

I had a client who bought a 200×100 ft land for 2.5 million naira about 10 years ago...

One half of the land was sold for 7m just 2 years ago..

And we plan to sell the other half for 9- 10 million because of the state of the naira..

If you know your way around it, it sure works!

Nice write up! I'm following you immediately.

I'll like to also follow you on twitter if you can drop your handle.

“You will come to know that what appears today to be a sacrifice will prove to be the greatest investment that you will ever make.” Gordon B. Hinkley

“90% of all millionaires become so through owning real estate.” Andrew Carnegie

“The wise young man or wage earner of today invests his money in real estate.” Andrew Carnegie

“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.”
John Paulson, investor and multi-billionaire

“90% of all millionaires become so through owning real estate.” Andrew Carnegie

“When you invest, you are buying a day that you don’t have to work.” Aya Laraya

“You will come to know that what appears today to be a sacrifice will prove to be the greatest investment that you will ever make.” Gordon B. Hinkley

“The wise young man or wage earner of today invests his money in real estate.” Andrew Carnegie

“90% of all millionaires become so through owning real estate.” Andrew Carnegie

“When you invest, you are buying a day that you don’t have to work.” Aya Laraya

The philosophy of the rich and the poor is this: the rich invest their money and spend what is left. The poor spend their money and invest what is left.” Robert Kiyosaki

Everyone wants a piece of land. It’s the only sure investment, it can never depreciate like a car or a washing machine.” Russel Sage

“Every person who invests in well-selected real estate in a growing section of a prosperous community adopts the surest and safest method of becoming independent, for real estate is the basis of wealth.”
-Theodore Roosevelt

I have 4 flats for sale in COCA-COLA ESTATE, Mowe, Ogun State.
Property has C of O, registered Survey and receipt.
Newly developing estate, security, tarred road, borehole and electricity. Selling for really cheap. Owner is trying to raise funds for a project.

Selling for Under 15M.. Just make an offer.

0-8-0 23820278
Alex

The philosophy of the rich and the poor is this: the rich invest their money and spend what is left. The poor spend their money and invest what is left.” Robert Kiyosaki

good

“When you invest, you are buying a day that you don’t have to work.” Aya Laraya

Everyone wants a piece of land. It’s the only sure investment, it can never depreciate like a car or a washing machine.” Russel Sage

“When you invest, you are buying a day that you don’t have to work.” Aya Laraya

The philosophy of the rich and the poor is this: the rich invest their money and spend what is left. The poor spend their money and invest what is left.” Robert Kiyosaki

“Every person who invests in well-selected real estate in a growing section of a prosperous community adopts the surest and safest method of becoming independent, for real estate is the basis of wealth.”
-Theodore Roosevelt

“The wise young man or wage earner of today invests his money in real estate.” Andrew Carnegie

“90% of all millionaires become so through owning real estate.” Andrew Carnegie

Land monopoly is not only monopoly, but it is by far the greatest of monopolies; it is a perpetual monopoly, and it is the mother of all other forms of monopoly.”
-Winston Churchill

“Now, one thing I tell everyone is learn about real estate. Repeat after me: real estate provides the highest returns, the greatest values and the least risk.” - Armstrong Williams, entrepreneur

Land monopoly is not only monopoly, but it is by far the greatest of monopolies; it is a perpetual monopoly, and it is the mother of all other forms of monopoly.”
-Winston Churchill