On this discussion class of real estate market analysis for beginners (REB-2021). we will take our time to analyse the real estate market for your consumption with Nigeria as a case study. no doubt that Nigeria is the most populated country in Africa that's known fact. so talking about how sizable is the Nigeria market of real estate business, that little fact has already answered you.
Never mind, we're going in details to study how sizable and profitable is the real estate market in Nigeria. if you have read Rich Dad and Poor Dad by Robert, you will understand that marketing is the greatest financial intelligence skill, one can acquire to build up the assets column.
Have in mind, that the real estate market in any place is always one of the biggest market and most profitable market depending if you can understand the market better in other to harness it massively.
The real estate market analysis that we're about to discuss below, is from the day to day steps we have taken to build our new Agents/Brokers to start accessing the market in Nigeria and pulling out a huge return on investments in the market industry of real estate.
Real estate is a business for everyone, so if you're thinking about the business to do this year and build your desired future. then real estate market is here for you. only stay with us for a short time and you will be able to move to the market and tempt the goddess of good luck.
∴Table of Contents.
1. Why people invest in real estate market.2. How to make money from real estate market.
- Risk involved in real estate market and solution approach.
- When to sell from market analysis.
- How to buy a marketable property.
Why People invest in real estate market.
If you have been investing in other risky investments like stock market, cryptocurrency and you want to diversify. then real estate market should be the best alternative, to enjoy a good rate of cash flow and capital gains on return on investment.
- With the appreciation of rental properties, there will be increased value. in turn, this could help with the selling and reinvesting in properties that already have a higher value. appreciation of rental properties can also make way for an equity line of credit for future use.
- Speaking of equity, you as an investor can invest in sweat equity, which involves making improvements to your real estate property. it doesn't have to be so far out where you end up spending a lot money. this can help the value of your property go up faster than it would have if you had not made improvements. so, if you spend $3,000 on cosmetics and miscellaneous items, then the value of the property could be double or more of the amount you spent on improvements.
- Being a real estate investor during inflation times is not necessarily a bad thing. Even though rental payments increase during this time, your mortgage loan payments should remain the same. because of this you can have an increase in cash flow. Another thing about inflation is that you can also gain more renters (if you have vacancies) because some people may not be able to secure mortgages during that time. since you will also increase. this is part of the agenda of supply and demand.
- Many investors love to invest in real estate market because of the longevity that it can be passed down from generations to generations with it's value appreciating instead of depreciating. because real estate assets is the only assets in the whole world that doesn't depreciate under normal circumstance. so that's always enough reason why people invest their capital in real estate market other than other stock exchange, funds share, mutual shares cryptocurrency and other online/offline investments
How to make money from real estate market.
The market is very profitable and lucrative but many are still confused and asking questions like how to start and make money from real estate market because of it's broad nature.
Hey, we will take a look at how to make money in real estate market through the easiest way and most reliable means.
❤The major ways to make money from real estate market is from properties such lands and housing.
For example, investors do leasing of lands, or sell lands when it appreciates as a result of location and development. another ways of making money from lands is receiving royalties from mineral resources found on your lands under documented agreement. sometimes government do pay compensation for mounting antennas, high tension. and other things like that on your land.
The second best way to make money from real estate market apart from lands is housing. either building for commercial or residential purpose. investors do build house to sell it out when the property appreciates or they rent it out at fixed monthly income, sometimes lease out to company, individuals and government to build warehouse or other commercial advantage to them and you will be properly paid depending on the contract agreement.
Risks found in real estate market.
Real estate market can be very lucrative. but hey, there's a whole lots of risk factor associated with it and important dangers you can see in the market. we will take time to analyse the key risks for you and possible approach to avoid it.
Location
Location is everything in real estate investment. if you care about your capital and you really want to do it right in the business of real estate investment. location is one vital risk assessment you need to check out for in making decision on properties to buy.
When we interview some real estate developers and sophisticated investor one thing they keep mentioning as a key to success, is how strategic located is the properties they intend buying.
Have an intelligent study of the area the property is located and how development is moving around that particular areas. being able to the imagine the future of the area you want to buy a property is an adequate financial intelligence quotient in real estate market.
The things you should check out for in the real estate market when considering a good location to buy includes. check to know if there's any government related parastatal located around the area like hospitals, banks, offices and government chambers. you also need to check out for things like good road network, light and things like recreational activities around the area.
- Problem of tenants
For investor that do buy a property like lands develop it by building a comfortable shelter to attract some clients who will occupy the building as tenants making the investor a Landlord. we all hear the saga everywhere about Landlord and tenants wahala as it's called in Nigeria, that's to tell you all that there's always a big problem inside between landlords and tenants but we investigated so well to notice that apart not paying rents on time they're other problems.
- Beware of Fraud
Is hard to eliminate this factor completely in the real estate market but they can be minimized to it's lowest unit. to erase fraudulent act in real estate market such as fake documents, fake lands, fake agents\brokers and wrong agreement contract. the best way to do it is proper studying of the market to know the new update of scammers and ways to avoid them, ask questions about the property before buying and careful reading of the documents and agreement signature to know if that's actually what you want.
Will Real Estate Market Go Down In 2022?
From records of the real estate market so far and unpredictable nature of the market. we will be listing out reason to show if the real estate market will go down or not in the year 2022. real estate analysis for beginners (REB-2021) is mainly based on this post because many have been asking us if the market will soon crash or not. we all know some people always feel like the sky will fall.
Although the real estate market is currently unstable with the following issues regarding house rents not paid on time, houses for sale pending, low price tags and inflation and so on.
Let's use Nigeria as a case study. looking at the major states like Lagos and Abuja, some buildings there are fully equipped and empty. nobody is living inside, the same with urban located estate housing. they are very luxurious but no tenants. go to Lekki phase1, main island and so on. that statistics shows you that the home sale pending is declining. reasons could be the current economic crash, low GDP (gross domestic product) per capital of the country, low demand of luxurious homes as result of large unit of poor masses in the country.
Some lands areas has been over looked or abandoned by government and some individuals, due to the one sided urban settlement of the country. they rich settle in the urban area and abandon the rural areas which will affects purchased properties around that area to have minimal profit margin per annum.
In conclusion, from our real estate market analysis for beginners we discovered that the real estate market in 2022 will decline by 0.5% current market value if the Nigeria government remains unstable.
How To Invest In Real Estate Market.
Investing in a lucrative market like real estate, you need a very good strategy of investing and we will be sharing with you in this analysis of real estate market how to invest in profitable properties.
The first key strategy to invest in real estate market is to understand the market, what you want to invest. so many investors are losing a huge capital in real estate market because they don't understand the market, to what property they must buy at that particular time with respect to their purpose of investing.
A good invest takes time to be realized. another key is to attend seminars, coaching platforms, training and spend some time asking questions before investing. so as to understand where the capital of investment goes.
When an interviewer asked the richest man in Africa the person of Aliko Dangote about tips on investment success. he said something worth noting down, he said and i quote" Aliko group of company don't invest in any investments they don't understand vividly" they spend some time to analyse the market before investing. it's better to use $10,000 to learn about the market instead of using that $10,000 to invest as a novice.
Lastly, many investors don't know when to buy, what to buy and how to sell their property off in the market. so below is our explanations on how to buy and when to sell your property in the real estate market.
When To Sell From Market Analysis.
As it's important to buy a property so it's very important to know when to sell your property to have an expected return on investments. so below are some analysis on when to sell your property with respect to market condition on months and years of the business calendar.
Historically, May was the best month to sell a house, but that changed to March in recent years. In 2019, homes listed during the weeks of March 11 and 18 sold fastest. Keep in mind, we omitted irregular data from 2020.
If you’re hoping to sell for more than the asking price, aim for the week of April 22. And try to list before September, because that’s when families start settling down to begin the school year. By October, sellers face the worst weeks of the year for maximizing gains — homes listed during the weeks of October 14 and 21 were least likely to sell above ask in 2019.
It’s important to remember that local market circumstances also influence the best time to list your house. Those conditions include job growth, mortgage rates and tax incentives.
How To Buy A Marketable Property
You can buy a property, any property at any location but you can't sell any property at any given time for anything you want. what am i trying to say; you don't buy properties because you have money but you buy property because it's worth buying. although most times it depends on your reasons of buying.
Some people buy real estate property for their next generation, okay in that occasion you can buy any property but have in mind you're not liquidating any time you want. just as people have a fixed deposit in the bank for longer years before accessing it that shows how generational real estate purchase purpose is.
But as an investor who wants to buy a property for profit gain at a given time or willing to pull your capital and have your return on investment anytime you want. the investor must desire to purchase marketable properties or the investor should get an agent to help.
Here are some key factors to check out when to buy a real estate property for it to be marketable at any given liquidating time.
- Pay down personal debt
- Find the right location
Savvy investors might carry debt as part of their portfolio investment strategy, but the average person should avoid it. If you have student loans, unpaid medical bills, or children who will attend college soon, then purchasing a rental property may not be the right move.
The last thing you want is to be stuck with a rental property in an area that is declining rather than stable or picking up steam. A city or locale where the population is growing and a revitalization plan is underway represents a potential investment opportunity.
When choosing a profitable rental property, look for a location with low property taxes, a decent school district, and plenty of amenities, such as parks, malls, restaurants, and movie theaters. In addition, a neighborhood with low crime rates, access to public transportation, and a growing job market may mean a larger pool of potential renters.
Calculate your margins
Wall Street firms that buy distressed properties aim for returns of 5% to 7% because, among other expenses, they need to pay staff. Individuals should set a goal of a 10% return. Estimate maintenance costs at 1% of the property value annually. Other costs include homeowners' insurance, possible homeowners' association fees, property taxes, monthly expenses such as pest control, and landscaping, along with regular maintenance expenses for repairs.
This where we come to a conclusion on this particular post of real estate market analysis for beginners in (REB-2021). go through it carefully and utilize the information because information is power. we're living in the information age. so make sure you understand every words on this page or you can check out for older post on real estate brokerage in Nigeria.
Gracias por leer.
