Buying land is always hot. Millionaire Real estate investors say the best time to buy land was five years ago and the next best time is today. But, before you go bringing out your cheque books, you need to understand the land business. Buying and selling land is good business if done correctly. The following are important pointers to help you determine where to buy land.
Establish what you want to use the land for
People buy land for different purposes like buying a house, for commercial use, land flipping, agricultural use, a recreational park etc. To help you get started, answer the following questions:
Set a clear and concise objective for buying land. What do you need the land for?
Determine the most suitable location for your chosen venture.
Define the size required, boundaries and access to and from urban centres.
Verify the title documents of the land. Choose lands with proper land documents.
Identify the problems involved in acquiring the land and evaluate the risks involved. Identify possible solutions before moving ahead with the transaction. For instance, if you decide to invest in a land yet to be excised by the government, take into consideration the consequences should the government decide not to excise the land. All investments have a degree of risk. Choose your risks wisely.
Distinguish between long-term ventures and short-term ventures. For instance, buying land for agricultural use is a longterm venture. Depending on what you intend on planting, it could take as long as five years to see returns on your investments. Land flipping, on the other hand, could reap a good return on an investment after a year or two.
Think long-term. It is always more profitable to buy land where people will settle in three to five years from today. The challenge is, no one knows for sure where people may decide to settle in the future. However, they are predictive economic factors that could help determine where the next people will migrate to.
Once you’ve decided what you need the land for, do your research on the size required and the right location. For instance, if you’re looking to buy land to build a commercial building, you’d need to choose a location where businesses would want to pitch their tents. In the same vein, if you want to buy land to plant cocoa, the first thing to consider is choosing the location with suitable weather for growing cocoa.
Although, millionaire investors advocate for buying land, having a purpose for buying land is the first step in the right direction.
Determine the basic features of the type of land you need
To get the best land deal in the market, it’s necessary to take into consideration certain features like the following:
The land resources, climatic conditions in the area, soil type and landforms. Coastlines in Lagos are prone to flooding during the rainy season. Before buying land, it’s important to examine the soil type and the nature of the land. Would you need to sand fill before building? How much clearing do you need to do?
Examine and verify the survey plan. Ensure the land you want to buy falls within the coordinates of the survey plan. If you’re buying land in Lagos, verify the survey plan at the Surveyor General’s office at Ikeja to make sure the assigned purpose of the land is the same as your objective. For instance, if the land had been assigned for agricultural use only, you cannot buy the land if your objective is to build a residential building.
Take into consideration the existing infrastructure. Is there any access to the highway? What is the distance to the closest urban centre?
Consider the land tenure system in the locality and how it can affect your rights to use the land. There are certain areas in Lagos that require a buyer to see the Oba of the local town before buying land in the locality. Take all these into account when choosing where to buy land.
Finances are a significant determining factor in determining whether or not you can acquire a property. It’s no use going through all the trouble in making sure the land you want to buy is a perfect fit if you don’t have the means to finance the project. The cost of land isn’t just limited to the cost of land per square meter. There are hidden factors that cost money and should be taken into consideration like the following:
Gathering information and researching on the land in itself costs money. The cost of verifying land documents, the transportation cost of going for a site inspection and cost of inviting a surveyor to survey the land all costs money.
Consider the cost of providing support services like clearing the land and paving a road. Some real estate companies bear the cost of clearing, fencing the land and paving an access road. However, in a case where these services aren’t provided, you’d need to determine the cost.
Additional fees like developmental levy, survey fees and documentation dues may not be included in the cost price of the land. Before making a commitment, find out if there any extra fees and when and how these fees should be paid.
There are so many houses for sale in Nigeria, especially in Lagos. But not everyone starts out knowing exactly how their dream home should look like. Real estate agents will agree that most clients aren’t certain of what they’re looking for. They may have a vague idea but not the real thing. How do you determine if a particular house is a right fit for you?
Whether you’re buying your first home or choosing the right rental apartment, you’d need to narrow down the factors that are a must for you. The following guidelines will help decide what is a top priority and what’s not. Get a pen and paper ready and let’s dive in.
How to set general guidelines
The following questions will guide you towards understanding your personal housing needs. These questions are divided into 6 sections, to help you identify your housing objectives, evaluate your financial state and draw a roadmap to achieving your goal of buying or building a new home.
What about the neighbours? What type of neighbourhood would you like to live in or raise your kids in? Do you have any need for a recreational park?
It’s important to determine which features are a must for you and your family. This helps you streamline and avoid houses for sale that will not meet your needs. For instance, a young couple who’s looking to live in an area for five years might not actually need a house with a kid’s recreation park, especially if they aren’t planning on having kids yet. Most estates in Lagos highlight a kid’s park and an outdoor swimming pool as a top ‘luxury’ feature. However, if you’re a professional who’s always travelling and prefers privacy, an outdoor swimming pool might just be extra expenses you do not need.
How much are you willing to spend on your housing project?
Do you wish to take a loan or a mortgage?
Can you pay outrightly? If no, how long do you need to complete payment?
Can you afford up to a 30% down payment?
Most real-estate companies like Sevic PDC offer a flexible payment plan over a period of 3 to 12 months. Others go as long as 24 months. It’s important to determine which payment option suits your pocket. If you’re looking to own a home in the future but cannot afford to buy one now, buying a plot of land might be your best option. In investing in your home, make the efforts to plan long-term.
Section Four: Identify The Pros and Cons
Make a chart of your top features and consider the pros and cons of each decision.
Buying a house vs Building a house
In your opinion, what are the implications of building a house over buying one?
If you decide to buy a house, how much would it cost to renovate it to your taste?
Should you decide to build your house; what is your time frame?
Do you have the time to properly coordinate a building project?
Time is the greatest factor when choosing between renting or owning a house. If you’re planning on staying long-term, it’s advisable to buy or build a home. However, if you intend on relocating or moving to another town in a couple of years, rentals might be your best bet. Whatever the case, owning your own home should be at the top of your list.
Section Five: Decide Which Option To Go With
Choose the home that matches your criteria. For instance, is it a condo, a penthouse, a two-bedroom apartment, a three-bedroom apartment, etc.?
Choose the location you’d want to live in. E.g. Sangotedo, Ibeju-Lekki, Lekki Phase 1, Magodo etc.
Choose the real estate company you’d like to work with. Write down three top companies and investigate which company you find most suitable.
Choose where to buy land. Decide and act on it.
Make a list of the houses that have at least three top features you need and book an inspection.
Decide to act now!
Once you’ve decided where you want your new home to be located, how much you are willing to spend and the kind of home you want to live in, act on it. There’s never a perfect time to buy a house or land.
LekkiVale Estate is a low-density residential development located at Ibeju Lekki. It is spread across 17 hectares of 100% dry land with a carefully planned layout and offers world-class amenities. Lekkivale Estate has a C of O (Certificate of Occupancy) and instantly allocates your plot once payments are made. To learn more about Lekkivale Estate, Click Here: https://sevicpdc.com/lekkivale-estate-2/
The real estate market in Nigeria is rapidly evolving and most developers are beginning to adopt the offtake system of purchasing a property. An offtake agreement is an agreement that a buyer makes with a developer. The developer agrees to sell the property at an agreed price while construction is in progress. An offtake agreement usually occurs before or during the construction of the property.
Buying a property at offtake has tremendous benefits such as the following:
For the Buyer
An offtake agreement allows you to buy at a comparatively lower cost, which appreciates in value once construction is completed. Offtake prices are typically lower than the cost of a fully constructed property.
Buying at offtake allows you to save more and as a plus, you benefit from instant value appreciation of up to 10% once the building has been completely constructed.
An offtake agreement functions as a hedge against future price fluctuations. As an offtake buyer, you’re insulated from fluctuations in the money market, for instance, weakening of the naira against the dollar.
Buying at an offtake allows you the freedom of expression. You’re given room to voice your expectations, tastes and what you want in terms of designs required in your building. This saves you the extra cost of renovating an already constructed building to suit your taste.
The developer also benefits from the offtake agreement in the following ways:
For the Developer
An off-taker purchase allows the developer to recoup a large chunk of their investment and prevents long-vacant periods after construction. It’s common to see buildings stay vacant for up to three years after construction, in which they’d have to factor in depreciation. The system also allowed for a reduction of void before the building is constructed. Offtake agreement facilitates the easy transition from construction to occupancy and increased value of the property.
The offtake agreement gives the project the extra nudge to guarantee the completion of the project in the future.
1004 Estate has a total of 1004 flats, maisonettes and studio apartments. It is the largest single, luxury high-rise estate in sub-Saharan Africa. 1004 Estate is located at the heart of Victoria Island, Lagos, Nigeria. These high-rise buildings were opened in 1979 to serve as an upscale accommodation for senators and members of the House of Representatives. However, 1004 Estate has since been remodelled and resold to corporate buyers.
My colleague found an apartment after four months of searching. She had the funds. She has a stable source of income yet; it took forever to find a comfortable space. Most of the apartments she inspected had one of the following problems: inconsistent supply water, epileptic power supply, security risks, location disadvantage, and the list goes on.
The recent turn of events in the economic, social and political scene has generated greater uncertainty in the housing options available to young people. High youth unemployment coupled with a receding economy highlights the challenges young people face in Nigeria. This article explores the depleting state of housing obtainable for young people aged between 21 and 35 in Lagos state.
Three Major Housing Challenges the Average Nigerian Millennial Faces
The average Nigerian millennial pushes towards living in rentals, which reﬂectsthe growing problem of owning a home. The low supply of newly built, affordable houses against the rising housing demand inflates rental rates and housing costs. This bridges the gap between young people and home ownership.
In addition, landlords own full autonomy to regulate and determine rental rates with little or no regulation. Also, they offer limited options for tenancy like shared tenancy or variance in payment periods. As a result, tenants are open to marginalization and discrimination against single women seeking to rent a house.
The mortgage system remains woefully underdeveloped and brimming with setbacks like the uncertainty surrounding long mortgage periods extending up to 20 years, concerns over property rights and a limited data coalition base.
The following are notable key points unveiling the average Nigerian millennial:
The average monthly income is in the range of NGN 75,000-150,000.
About 92% are graduates or have undergone vocational training.
Nearly half have no immediate plans to move out of their parents’ or relative’s house but would love to.
High saving culture with interest in investing in properties or buying a car.
What the average Lagosian desires from a house are proximity to work, provision of water and power supply, security and affordability. Typically, an apartment that comes close to offering these features cost a fortune. In most cases, people settle for a house far away from their place of work. The result is long hours in traffic commuting to and from work, and also long tedious hours in traffic that could have otherwise been directed at other valuable activities like personal advancements and proper rest. Not to mention the ludicrous amount of their meagre monthly income spent on transportation.
The way forward
As the populations’ increases and Lagos, more crowded, the need for community housing schemes has become inevitable. Although community housing schemes are generally stereotyped as backdrops for poverty and ghettos – in the long run – there are several successful community housing schemes around the world to take a cue from.
A fair trade-off would be a joint investment between the public and private sector with the public sector providing the land and subsiding the cost of development while the private sector develops and oversees management and sell-off of the properties. Lagosians are willingly to pay for low-cost, efficiently designed houses.
1004 Estates Limited is an exemplary real estate project that properly incorporates living, working and recreation on a limited surface area. It has a 95% occupancy rate, highlighting the high demand for such housing developments. Imagine having ten of such high-rise buildings at the various vibrant areas like Surulere, Ikeja, Lagos Island, Lekki, Ibeju-Lekki, Gbagada, and Maryland.
Other successful community housing schemes include the following:
The Mirador Housing Project – Madrid, Spain
The Mirador housing project in Madrid’s Sanchinarro quarter dubbed as the “sky plaza” is a block of flats comprising of 165 apartments. The project won the Madrid Municipality Best Design in 2005. It was designed by the Dutch architectural firm MVRDV.
The Pearcedale Parade – Melbourne, Australia
The Pearcedale Parade in the Melbourne suburb of Broadmeadows is a vibrant, eye-catching development by the Victoria-based branch of CH Architects. The Pearcedale Parade was completed in 2010 and contains 88 cross-ventilated units, and the development boasts of having solar-powered hot water and heating. The development was funded by a non-profit body dedicated to providing affordable accommodation and bent on improving the way people think about community housing.
Community housing schemes do not require the bravado luxury apartments offer. The Nigerian real estate market is a bit skewed as most real-estate developers diverted resources towards constructing luxurious villas and large family-sized apartments. Unfortunately, the market for luxurious apartments is rather tiny compared to the massive, untapped market literally begging for affordable homes.
A community housing scheme should focus on providing the following core amenities:
1. Tarred roads and functioning drainage systems
No one wants a pond at the entrance of their house five hours after a drizzle. An appropriate housing scheme will incorporate well-dug drainage systems and tarred roads linking the development to the highway for direct access.
2. 24/7 Water Supply and power supply
A central pumping station designed to ration water distribution with meters placed in every apartment will accurately determine how much water is used, how residents should be billed and to avoid wastage. No one would want to live in a house with water challenges, regardless of how pretty the house is.
An uninterrupted power supply is highly essential for convenient living. The epileptic nature of the Nigerian power system makes frequent blackouts inevitable. In this case, provision should be made for a central power generator to serve as backup during power cuts.
An underground parking lot will efficiently maximize space and provide ample parking space. Finally, maximum security in a housing scheme is paramount. An effective community housing must take into consideration the security risks of housing a bunch of strangers. Otherwise, the whole purpose of community living becomes defeated.
To conclude, the Nigerian real-estate market is at its teething stage and provides limitless opportunities to real-estate investors looking to solve real problems. The task of providing mass affordable housing falls on potential investors as much as the government. There’s definitely room for developing community housing schemes.
Here is a good place to start. Lekkivale Estate located at Ibeju-Lekki offers a unique opportunity to invest in real estate from as low as NGN 420, 000.