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REAL ESTATE: is investing in a commercial real estate in Lagos a good one?

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Buying and establishing real estate is a great investment strategy that can be both lucrative and fulfilling to accomplish. Quite different from bond and stock investors, potential real estate owners can decide to use leverage to acquire a property of choice. This is achieved by using leverage to pay for the total cost of the property acquired upfront, then completing the payment off the balance as time progresses.

Many of the real estate investors’ primary purpose of investment is for profit maximization and some may even be a long-term investment. Flipper investors buy property to resell at a higher price to earn income, while other real estate investors simply want to be a landlord of their rental property. Before we proceed, let’s find out the meaning of Commercial Real Estate?

What is Commercial Real Estate?

This is the process of acquiring real estate that its main purpose is majorly for business-related and income-generating aim. This type of real estate can either be for multi-family rental residential or mainly for industrial purposes, most times a combination of both. However, we have the various categories that make up commercial real estate, they include office space, retailers’ shops, hotels & resorts, malls &restaurants, and even healthcare facilities.

Commercial real estate yields rental income in combination with other capital appreciation on the property as time progresses. Although,investing in commercial real estate always need more sophistication and huge amounts of finance from investors than does residential real estate.

How Do Commercial Real Estate Works?

Just as the name implies, commercial real estate is available for industrial/commerce, multi-unit rental and can also serves as a residential space for tenants. It works through different methods that’ll discuss in this article. They include;

  1. Long-term Commercial Lease: In this method, the property is leased by the investor or group of investors who own the property to the interested user for a long time, like 5-10 years.
  2. Short-term Rental Period: In this method, the property is rented for a short period, like 12 months after the rental rate has been concluded by both parties. It can even be leased for a short period of a month.
  3. Flipping Commercial Method: This is the process whereby an investor or group of investors simply acquire a property or some properties for reselling aim. They buy at a cheaper rate and resell at a higher rate for profit gain. Some investors can keep the property for as long as they wish before reselling but a large percentage resell within a short period (like 3 to 6 months) of it being purchased.

Managing Your Commercial Real Estate

This can be done by the owner or through the services of a good commercial real estate management firm that aids in the proper maintenance & management of the property. The firm assists the owner to find & retain tenants, manage, co-ordinate the activities of the property. Most times, the services of a commercial real estate firm is highly recommended because of their vast knowledge of the rules and regulation, government policy guiding real estate investment in our country. Meanwhile, let’s see if investing in commercial real estate in Lagos is such a good idea.

Is Investing in Commercial Real Estate in Lagos a Good Idea?

Lagos is the World’s sixth megacity, a major economic hub in Nigeria with a population of 24.6 million inhabitants in 2015 according to UN-Habitat and international Agencies. Thus, Lagos population is increasing 10 times faster when compared to New York City and Los Angeles, also  bigger than the population of 32 different African nations joined together. Lagos state’s population increases by 77 people every hour. Of course,with this kind of population, housing requirement is such a hot cake and a core investment area. Hence, as Lagos city grows, also is the same increase in demand for housing and commercial real estate.

Housing Sector in Lagos

Housing has been one of the most challenging issues with urban areas especially in Lagos state due to the increasing inflow being recorded yearly. Over 500,000 people relocate to the megacity each year, this has also caused a housing deficit of upto 17 million units. Thus, this deficit provides a market and brings an opportunity for real estate investors who’re interested in building real estate mainly for commercial purposes. According to a BBC report concerning housing in Lagos, it was estimated that middle to high income housing expense cost at the rate of $2,000 to $35,000 yearly that’s for a 2-bedroom apartment and above. Even at this price, there’s inadequate housing provision for the inhabitants of the state.

Meanwhile, when compared with the cost of renting a commercial apartment in other states such as Ogun, Anambra, Oyo, Enugu, Kaduna, Cross river, etc. Lagos state has about 35% to 55% higher cost in renting an apartment or any commercial real estate category to other states. So, for investors trying to set-up a commercial real estate in Lagos, they can never go wrong with their investment once they follow judiciously the standard guiding building a commercial real estate investment in the state.

But this can’t be assured for other states. For instance, I have a client who first set up a commercial real estate (a retailer’s shop outlet) in the rural area of Mowe, Ogun State. And, since his investment in the area, he hasn’t been able to recover 60% cost of the building for over 5years now. And this was as a result of low population & low cost of living in the area. Meanwhile, that same client setup another investment at Sangotedo, Lekki almost the same as the one at Mowe but a little different due to the standard required by the Lagos state government and has made over 200% Return on investment on the property.

Therefore, I won’t be wrong if I state that commercial real estate in Lagos a good idea and a huge platform for one to invest in because of its market availability on the ground. So, from our discussion, you can see that commercial real estate in Lagos is favourable depending on your purpose of investment.

 

Dennis Isong Helps Individuals Invest Right In Real Estate.For Questions On This Article Or Enquiring About Real Estate Email: Dennis@Landproperty.ng or Whatsapp/Call +2348164741041

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Tourist resorts in Lagos you should visit during holidays and their investment opportunities

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One of the biggest sectors all over the world is tourism. This sector generates a lot of money yearly. The good thing about tourist resorts is that the fortune spreads among people living nearby. Asides from this, businesses thrive best here.

In Nigeria, Lagos which is known as the center of excellence is believed to have so many tourist resorts which are largely in the highland.

In this article, I would highlight the tourist resorts in Lagos and why you should consider buying a property around these places.

1. LA CAMPAGNE TROPICANA BEACH RESORT

La Campagne Tropicana Beach Resort is popular because it is the most visited beach.

Tropicana is located at Ibeju-Lekki along the Free trade zone road. The resort has features like a Mangrove forest, freshwater, sandy beach, etc. Tropicana provides comfort and a new experience within Nigeria, that’s why people visit the place often.

2. LA MANGA LUXURY BEACH VILLA

La Manga beach resort is located in Ilashe, an Island in Lagos State, Nigeria. La Manga is a resort with a landscape that provides great scenery and calmness. It’s a beach resort couples can visit. The view of the sea provides an ambiance that is attractive enough for anyone to want to be there.

3. THE OMU RESORT

The Omu Resort is more of a recreational facility or an amusement park coupled with wildlife. You can do these at Omu Resort: swimming, fishing, hunting, horse riding, canoeing, etc.

The Omu resort is always a place people go to for relaxation.

4. INAGBE GRAND RESORT

The Image Grand resort, developed by a real estate company is located about 15 minutes from Victoria Island, Lagos by boat ride. Image Grand resort is a holiday resort many people like to be in. There’s even a rumor that the resort has a charm to re-spark your passion for love. can do this on this beach.

5. EKO TOURIST BEACH RESORT

The Eko tourist beach resort is located  in Ibeju-Lekki, and is widely known as Akodo Beach. It is no doubt one of the finest beach resorts in Nigeria, Lagos State. The Eko resort beach is just a 5 minute drive from the Lekki free trade zone.

I added Eko tourist beach as one of the best resorts in Lagos because of its amusement parks, swimming beach, coconut groves, and many other activities.

6. KAMP IKARE BEACH RESORT

Kamp Ikare resort in Lagos is a private beach resort close to the Ikare Village in Badagry, Lagos. Kamp Ikare beach is a beautiful place recommended for couples and is said to provide different services.

WHY YOU NEED TO BUY A PROPERTY CLOSE TO THESE RESORTS

1. It’s a good business venture

These places bustle with activities and like I said at the beginning, the fortune spreads across those that also live closer. Doing business here is a great decision as making money in multiples is not a problem here.

You could consider buying a property here for business these ember months and see how lucrative it is. Buying properties near tourist destinations can be used for business ventures. Tourists love to stay for a day or two in rental houses where they can relax, feel at home, and can easily go from one destination to another. You could consider a short let apartment in this case.

2. There are greater prospects in these areas

Already, the resort centers have created much value in these areas. Asides from this, the value of the property increases faster because it is located in a region on the rise.

3. Good rental opportunity

One of the benefits of owning a property close to resort centers is the opportunity to rent it out during holidays and peak seasons. You would agree with me that it’s an excellent way of paying off your dream house.

4. It’s an investment in the quality of life

Living close to resort centers improves your quality of life, which is an investment in itself.

5. Location

Your quality of life, the caliber of people you meet, etc. largely depend on the location you are. I can’t stress this enough. Location is the utmost determinant of what you become and your property potential in the property market sooner or later.

6. Networking opportunities

Being surrounded by affluent people offers ongoing networking opportunities. Who you know is more important than what you know.

7. Close to local amenities

Owning a property close to resort centers allows you to have quick and easy access to hospitals, restaurants, shopping malls, sporting facilities, etc.

8. Perfect for a family home

It’s a great investment for your children, especially for annual family get-togethers. People are choosing to buy homes that offer beyond shelter. A home close to the resort center is a perfect location.

9. Higher market value

If you are buying the property to invest, it’s a good return on your investment. In the long term, you can either choose to retire from it or sell it. Both ways, there’s no regret.

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Top Secrets surrounding rental property investment in Lagos

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Buying a rental property is a good step in the real estate business. However, I would advise that you shouldn’t barge into it without having some knowledge of what you are getting into. Despite having many people successfully running a rental property, still, it’s not easy money. There are obstacles, losses, risks, etc. but if you can figure it all out, then, you find it a successful investment.

Now, what do you need to know?

1. The property has to fit into what the people around want

This is very crucial. If you are buying a property close to the campus, be rest assured that 95% of potential tenants will be students. If you intend to make it a family home, then, you may find it difficult to get renters who are not students.

If people around are working class with good jobs, this will increase your property value because renters will be ready to buy at a premium price.

You need to put people whose population is higher into consideration before buying a property for rent. If it works, you can go ahead.

2. Location is as important as the air we breathe

If you want to get a good return on your investment, you need to be keen on location. Location can strengthen your investment, and at the same time kill it. It determines what value to be placed on it. If you buy a rental property, renovate and furnish it in underdeveloped areas, you may be disappointed in hearing the value people place on it. Also, if your rental property is in a place that is not all that motorable due to bad roads, or the roads always get flooded during heavy rainfall, this may be a huge obstacle to getting renters that would be willing to pay something worthwhile. And what is a business if you are not getting anything from it?

3. Check out the taste of structures within the locality

This should be highly considered because it’s a great determinant of having people interested in your property. Can you afford to have the property renovated up to taste? The property you are buying is not a new model, it is best to check out for structures around so you can make an adaptation or do something better. This helps you get renters easily and also willing to pay its value.

4. Renting property is dicey

The truth is you can’t be good enough, smart enough, and do everything right. Just a little mistake might make you lose the property. The fault may be or may not even be from the tenants or anyone.

Major damage such as fire outbreaks can ruin your investment. An economic downturn caused by anything, for example, a pandemic may make you lose money because if your tenants are unable to pay or move out without anyone showing interest in occupying, it’s a big loss on your part.

5. You are responsible for maintenance

As much as landlords try to avoid this part but at the end of the day, it falls back to you as the owner of the property. This is where you are reminded that it is your house and the responsibility to keep it together lies with you. This is a major reason some landlords take maintenance fees from tenants in case there is damage. However, this fee can just cover a little of the damage.

The major repairs still lie with the landlord whether he is willing to or not.

Apart from having damages, maintaining a house is the only means to keep a property whole.

Things have to be checked, adjustments have to be made and repairs have to be done.

All of these rest on the shoulders of the property owner.

6. Get everything documented

Everything about your property has to be documented. One of such is “agreement.” In Nigeria, many people take things for granted which may turn out to be a bigger issue sooner or later. Some houses have no landlord-tenant agreement for whatever reason. This shouldn’t happen in normal circumstances. When push comes to shove, that agreement which seems like a piece of paper to many might be the only evidence to bail you out.

And all documents concerning tenant evaluation and rent must be considered too.

Dennis Isong is a Real Estate Professional. He advises that before you buy any property in Nigeria, ensure you read this Real Estate Guide.CLICK THE LINK BELOW TO  DOWNLOAD  FOR FREE  https://landproperty.ng/free

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Why you should buy a property for rental income in Lagos

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Lagos is a state in Nigeria that is highly populated, modern, full of prospects, and everything good. Just like they say that you can achieve anything in New York, Lagos is a city where you can achieve a lot because the city provides lots of opportunities and accessibility to getting closer to your dreams. 

This has motivated people all over Nigeria to migrate to Lagos because they see the city as their greener pasture.

In a place where the population keeps rising, it is expected that there would be a demand for houses for rent. 

Rental property is the new oil money in Lagos. And no matter how high your rent is, you already have a population that is ready to go for it.

So, why should you buy a property for rental income in Lagos?

1. Rapid economic growth

Lagos is leading in terms of business which helps the economy. The city is also considered Africa’s eighth-fastest-growing town in terms of population and is expected to be the world’s third-largest by the year 2050. The numbers speak for themselves with Lagos being responsible for more than 53% of production jobs, generating 25% of the national GDP, and consuming over 60% of the electricity of the country. Lagos is host to more than 2000 manufacturing businesses, and 200 financial institutions, and is also host to Africa’s biggest concentrations of small and medium-sized businesses.

2. The important need for rental properties

The rates of leasing in this city keep rising rapidly and this stands to promote the fact that a lot of people in Lagos are opting to rent over buying out properties. This is largely due to the usually massive cost of homeownership, high costs of land, and staggering costs of building construction. Developers are aware of this direction the industry is headed as approximately 75% of landowners already have plans to develop rental properties due to their ability to quickly provide a return on their investments as well as a large supply of the populace available to rent the very second construction is complete.

3. Stable political environment

Lagos has the most stable political environment when compared to other states in Nigeria. Since the return of democracy in 1999, Lagos has been under the control of the same political party and this ensures a continuum in governance, this is good for the real estate market because projects and developments are implemented according to the master plan. It also means that important projects that drive growth are not altered because of politics.

4. Infrastructural value

At this point, the biggest reason why Lagos is a great location for investments is an almost ridiculous rate of return of investments on real estate properties. The Lagos State Market Analysis presents Lagos as having some of Nigeria’s largest estate prices. The Lagos estate industry remained buoyant and, in some cases, flourished even when the value of the real estate in other states across the nation plummeted from the latest economic recession. A plot of land bought for 5 million in Lekki in the year 2006 could go for an average of 75 million now. It’s no surprise because real estate transactions occur dozens of times every day as more and more people seek to stake their piece of the blossoming city.

5. Bustling population

A population is undoubtedly a significant engine of development for the real estate industry, Lagos is easily Nigeria’s most populated state. The megacity has risen to about 22 million today from 1.4 million residents in 1970. Projections have estimated that at least 89 people move every hour to Lagos, which is more than 2000 people every day and nearly a million people every year. That’s a constant flow of bright-eyed citizens looking for accommodation, purpose, and fulfillment. 

Dennis Isong helps individuals invest right in Real estate. For questions on this article or enquiring about Real estate. Follow him on Youtube https://www.youtube.com/landpropertyng , Email Dennis@Landproperty.ng or Whatsapp/Call +2348164741041

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