-By Danlami Nasir Isah
Real estate is considered one of the most viable kinds of investment in the world as it can become a fortune overnight if the right mix is put in place using the proper avenue.
The following are some of the mix to consider when investing in real estate and for those already involved in it to turn their presently dormant investment into fortune:
1. INVEST IN PROPERTIES WITH A HUGE DISCOUNTED VALUE: When buying at a good discount you have the flexibility of selling, in a worst-case scenario at a profit. Any serious investor should realize that you make your profit from the start of a transaction in real estate and not at the point of resale.
2. ENSURE A SUPER FINISH: When investing in real estate, a few details can make all the difference. The difference between two buildings on the same street may be as massive as N1 million as a result of details. The details can attract a huge fortune to the property owner. Paying attention to details must be a priority to any serious investor if you care about good returns. For instance, Plaster of Paris (POP) ceiling as against PVC; Turkish doors as against local doors; wall screeching as against direct painting etc.
3. FOLLOW NEW DEVELOPMENTS: When making a real estate purchase, always ask questions about the kind of development that is coming up in an area; since development will most times attract other developments.
4. BUY PENNY PROPERTIES: Investing in penny properties means buying at rock bottom price. This entails buying the property virgin; buying long before there are roads, layouts, drainages or any form of development or title, as such the price appreciates. Some of the properties sold today at N10 million were properties bought at N200,000 seven years back.
5. LOOK OUT FOR YOUTHFUL DEMOGRAPHY: When investing in real estate, consider demography as this will determine a whole lot of other factors e.g. prices, development, etc. Reports have shown that some areas have stopped developing as a result of the kinds of individuals staying around such areas. An area filled with retirees will most likely not attract many upcoming and mobile young people.
6. HAVE A FAIR IDEA OF THE EXISTING RENTAL VALUE: A fair knowledge of existing rental value goes a long way in ensuring profitable Investments. An investment with a blank knowledge of existing rent value usually have a negative impact on bargaining price. Investor should consider at least 8% -10% ROI [Return on Investment] for any real estate investment per annum. Without which, it is a bad investment. Be it building land etc.
7. GO UP, DON’T GO WIDE: When investing in real estate, always consider going up as against going wide. Usually, going up will come cheaper for an investor in the long run than going wide. What it means is that you may consider a two storey building than a seven-bedroom bungalow if you want a serious return on your investment.
8. ASK FOR THE PREVAILING TYPES OF PROPERTIES: Building a four-bedroom duplex in an area where the demographic demands is a two-bedroom duplex or mini-flat may amount to tying money down for too long. In certain areas, some kinds of houses are in high demand and this should be put into consideration when planning real estate investment.
9. ENGAGE IN DIRECT LABOUR: The first kind of profit is made from the start of a project. Engaging in direct labour saves more cost than engaging in indirect labour.
10. TITLE! TITLE!! TITLE!!!: A property with good title documents will sell any day. In the circumstance that sales become difficult the Banks will most likely bail you out when the property is with the right kind of title.
