5 Smart Ways to Actively Invest In Lagos Real Estate

Now is the perfect time to invest in Lagos real estate, given several compelling factors that this article will explore. If you’ve been hesitant about investing in Lagos real estate, I encourage you to read on to learn more.

Let’s take a brief look into the city of Lagos.

Lagos, the former federal capital territory of Nigeria, was established in 1967 and is now the most populous city in Nigeria and the entire African continent.

In a recent report by the chairman of the Lagos State Chapter of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), Adedotun Bamigbola, Lagos State is divided into 7 zones.

Island 1 (Lagos Island, Old Ikoyi, S/West Ikoyi, Banana Island, Victoria Island);

2 (Lekki Phase 1, Ikate, Osapa, Agungi & Chevron);

3 (Ajah, Sangotedo, Awoyaya, Lakowe);

4 (Ogba, Ogudu, Magodo GRA 1 (Isheri) & Magodo GRA 2 (Shangisha);

Mainland 1 (Surulere, Yaba, Ilupeju & Gbagada);

2 (Amuwo Odofin, Isolo, Festac, Apapa);

3 (Ikeja GRA, Maryland, Ikeja, & Alausa).

In the past five years, Island 2 and 3 have dominated various segments of property investments. They have remained the top three preferred choices for investors, with 37.3% of investors choosing them.

Why invest in Lagos real estate?

Investing in Lagos real estate is a smart move, but strategic planning is key to avoid potential pitfalls. By investing with purpose in the right location, you increase your chances of achieving a high-profit return on investment.

I will highlight some major reasons you should consider to invest in Lagos Real estate:

Population And Housing Deficit

There’s acute shortage of houses for the growing population in Lagos.

According to current statistics and publicly available data, Lagos’ population is estimated at about 23 million.

This shows a very tremendous growth rate within a very short period, growing from about 1.4m in 1970.

It is reputed to be among the top 10 fastest growing cities in Africa

Experts predict that by 2050, the population will double and make the city one of the top three largest in the entire world.

What is the fate of housing and accommodation with a rapid population?

It is a well-known fact that growth in the number of households will necessitate a growth in housing demand.

Birthrate is one factor contributing to population growth. Additionally, migration from rural areas to cities like Lagos plays a significant role.

Former Lagos state governor Akinwumi Ambode highlighted the issue, noting that 86 immigrants enter Lagos every minute, the highest rate globally, and many don’t plan to leave.

These factors, along with the existing housing deficit of about 2.5 million in Lagos, represent current challenges rather than future predictions.

Now, juxtapose this with the future predictions of the possibility of a doubling population in the coming years.

You will be amazed at how much of an opportunity this presents to astute real estate investors.

Economy And Political Stability

Lagos is a very economically viable state with a very minimal level of political instability. It is the fourth-biggest economy in Africa by gross domestic product (GDP).

This is a city that generates close to about 30% of Nigeria’s total gross domestic product, and with a good number of inhabitants, it leaves the city quiet comfortably.

Another indication of its economic viability is the number of big corporations, both national and global, with their operational bases in Lagos.

These in turn provide a lot of job opportunities in various sectors, such as ICT, legal, business, finance, and even the educational sector.

With these jobs in demands, a lot of people migrate to this city and earn significantly better wages.

Why should I invest in an environment that is both economically and politically stable?

Lagos is expected to experience continuous growth over the coming decades, being that the city represents the industrial, commercial, and financial nerve center of Nigeria.

Yet it has been unable to meet with the geometric population size.

Neither has the hitherto high internally generated revenue been sufficient to meet surpassing infrastructural, social welfare, or environmental demands.

Hence, there is a need for more private investors to be actively involved in the real estate sector.

Infrastructural Developments

Infrastructure has been defined as “the basic structures and facilities necessary for a country or an organization to function efficiently

e.g. buildings, transport, water and energy resources, and administrative systems.

These can also be categorized as the economic and social facilities that are provided by the government.

Or by private sector operators, for the social and economic development of both the individual and the society at large.

This is perhaps one of the most potent reasons for massive investments in Lagos State.

The Lekki area has attracted massive infrastructures from both the government and private investors, such that it has become an international economic focal point.

And on completion of the various projects, the Lekki/Ibeju-Lekki region is en-route to establishing itself as a major hub of industrial and commercial activity

Some of these major infrastructure developments includes:

Lekki Free Trade Zone:

This zone is being developed as the foremost investment hub in West Africa for big local and global businesses that value free zone operational support;

Ease of doing business and a well optimized supply and distribution chain.

Once fully developed and functional, LFZ will play host to more than 200 major business operations, contributing close to 3% of Nigeria’s GDP.

Dangote Refinery and Petrochemical Plant:

This is a 650,000 barrels per day refinery project under construction in Lekki by the Dangote Group.

Recent news indicates that the refinery will commence operations between August or September 2022, boasting a capacity of 450,000 bpd. It’s expected to reach full capacity by the first quarter of 2023. This significant project is poised to positively impact not just Nigeria but the entire African continent in terms of economic growth and development.

The Lekki Deep Seaport, a significant $2 billion investment within the Lagos Free Trade Zone, stands out for several reasons. Constructed by China Habour Engineering and boasting an impressive 17-meter draft, this seaport represents a strategic development for the region.

In addition to being Nigeria’s inaugural Deep Seaport, the Lekki Port is set to pioneer as the first fully automated port upon its launch. The completion and subsequent commencement of business operations at this port are expected to have a multifaceted impact.

Firstly, it will undoubtedly generate thousands of jobs, thus significantly contributing to GDP growth. Moreover, this economic boost is likely to positively influence property prices across the region.

Below are a few smart ways to actively be a player in this evergreen Lagos real estate industry.

Smart Strategy 1: Land flipping

The strategy of purchasing undeveloped land at slightly discounted prices and then reselling it at a significantly higher markup, typically ranging from 50% to 80%, is not only robust but also extremely lucrative. However, the key to succeeding in this venture lies in gaining the necessary expertise and skills, as well as carrying out thorough market research.

Smart Strategy 2: Invest in off-plan developments

It’s a wise choice that smart investors engage when they invest in off-plan project.

Off-plan projects are both beneficial and profitable to the real estate developer and the investor.

Real estate development can be a very capital-intensive business; hence, developers tend to go the off-plan way.

Developers often lack sufficient capital, building materials, or other resources to develop a large plot of land all at once. This limitation can impact their ability to complete projects efficiently.

Hence, they opt for the off plan model.

This simply implies selling properties even before the actual construction begins.

The buyer (investor) simply pays an initial deposit, which is relatively low.

Payment for the rest is often tied to project milestones, either upon completion or in installments. This strategy has a key advantage: it lets you secure property affordably. Plus, you can opt to sell for a profit before or after project completion.

Smart Strategy 3: Buy apartment for rent

Another avenue to explore for investing in Lagos real estate involves purchasing or constructing an apartment with the intention of selling it later on.

Investing in a rental apartment is very simple yet rewarding. You can buy a 2-bedroom flat, furnish it to a good taste, and convert it into a short-let.

You can market it directly to your target audience or simply list it on Bookings.com or AirBnB and leverage on their massive daily traffic.

This real estate business model remains largely unexplored yet highly lucrative. In high-end areas like Lekki and Ikoyi, numerous estates offer daily rates ranging from 60k to 250k. Moreover, you have the option to delegate the management of your short-let apartment to property managers specializing in short-let properties. These managers guarantee the seamless operation of your business on a daily basis.

For the best of locations for profitable properties to buy for shot let, reach out to us

by email : info@realestatebestdeal.com

or Whatsapp : +2348134794494

Smart Strategy 4: Land Holding (Real Estate Investment Trust Funds)

This is a more passive way of earning from real estate without the hassles of owning land or a house.

Real Estate Investment Trusts (REITs) are a special set of regulated investments directly under the Securities and Exchange Commission’s (SEC).

With these model, the investor pulls in his capital into a well-structured scheme with other investors.

The capital will then be used to acquire income-producing real estate (land or houses) as well as non-residential properties like hotels, malls, and industrial properties.

These models provide steady, high-income generation and provide you with leverage for a diversified real estate portfolio.

Smart Strategy 5: Land Banking

Land banking is fundamentally a strategic real estate approach where investors acquire significant parcels of undeveloped land with the intention of holding onto them until substantial infrastructural development or population growth occurs. Subsequently, they have the option to either sell the land at a higher price or develop it to cater to housing demand, thus capitalizing on the increased value. Essentially, land banking involves the acquisition of land, a patient wait for appreciation in value, and then either resale for profit or development to meet market demands. One key skill for success in land banking is foresight in tracking geographical and topological locations primed for investment, considering social infrastructure and demographic factors. Globally, land banking is a sound investment strategy due to the consistent rise in land acquisition costs.

I am sure you want to invest in Lagos real estate right now. For the best of locations for profitable properties to buy for land banking, reach out to us.

By email : info@realestatebestdeal.com

Or WhatsApp : +2348134794494 (Godswill Igbokwe)

Conclusion

In recent years, real estate investment has been thought to be exclusively for the rich and super-wealthy in society. This was based on the available knowledge at the time.

Today, the narrative has shifted. This article outlines a few strategies along with plenty of open-source information from the internet. These resources show that getting involved in real estate doesn’t have to break the bank. It’s all about finding the best and most affordable strategy, gaining the necessary knowledge, and working with trusted real estate practitioners.

For advice on profitable property locations, land banking, and other real estate matters, feel free to contact us.

By email : info@realestatebestdeal.com

Or WhatsApp : +2348134794494