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However, investing in Nigeria’s property market from outside the country can be tricky. There’s always a risk that such deals would be poorly managed by the parties involved. If you’re a Nigerian who lives elsewhere in the world and would like to have your share of the handsome profits that local real estate offers, you can do so by following the steps we’ll run through below.
Research and Understand the Local Market
Before you buy land or begin constructing buildings in Nigeria, make sure to survey the market for such assets. The demand for property isn’t uniform across the country; some areas are more sought after than others. You’ll want to invest in regions that are either already recording significant purchases and building activity, or show promise of future development.Establish Clear Objectives
Define your investment goals early. Are you looking for a property to rent, resell, or to stay in occasionally? The answer to these questions will determine where your property should be located, and how much money you’ll spend on acquiring and building property. Knowing your long-term objectives will guide your decision-making process.Engage Trusted Local Professionals
If you’re not in Nigeria, you’ll want someone you can trust to take on prospecting, inspection, purchasing and construction on your behalf. So, find a reputable real estate agent, lawyer, or estate manager who understands the local laws and customs, and can provide valuable on-the-ground insights. Ideally, this person will be recommended by (or be) someone you know—a family member, friend, or close acquaintance.Consider Exchange Rates and Transfer Fees
Fluctuating exchange rates are a factor you’ll need to pay attention to, as they will significantly impact your investment’s value and profitability. Understand the dynamics of currency exchange and track movements in the FOREX markets. Also, find the most cost-effective ways to transfer money, as transaction charges may differ across transfer platforms.Sign up for the Connect Nigeria daily newsletter
Visit the Location
If possible, visit the place where you plan to buy property. This is particularly important if you’re staking a large sum of money on the asset in question. This way, you’ll get a first-hand experience of the environment, infrastructure, and the property’s condition—things that video clips and pictures won’t fully capture.Due Diligence is Key
Conduct thorough checks on property titles, land ownership, and any pending disputes or issues. Hiring a local lawyer can be invaluable in this process, as they will be able to investigate the authenticity of the documents involved and the ownership claims made by the parties selling the assets.Understand the Tax Implications
Another thing you should do is research the tax implications in both your host country and homeland. You will want to be on the side of the law concerning the transactions you’ll be initiating. Falling afoul of the laws on the taxation of landed property and taxes in general may lead to unpleasant consequences.Consider Diversifying
Don’t put all your eggs in one basket. Depending on your financial capacity, consider diversifying across different regions or property types to mitigate risks. For example, you could purchase and hold land in Abeokuta, Ogun State; build and rent out office blocks in Yaba, Lagos State; and construct and lease a block of shops in Aba, Abia State.Connect with Other Diaspora Investors
Building a network with fellow diaspora investors can offer invaluable insights, partnerships, and shared resources. There may be several things that you don’t know about investing in Nigeria’s real estate scene which you could learn from others who are interested in it.Stay Patient and Long-Term Oriented
Real estate investments generally appreciate over time. While there might be short-term market fluctuations, staying patient and focused on long-term gains can yield fruitful results.Register to attend the CN Business Mixer
Final Words
Real estate investment for those in the diaspora presents a golden opportunity to create wealth and maintain ties with one’s homeland. With thorough research, careful planning, and the right partnerships, you can beat the challenges that exist in the Nigerian real estate market and amass a profitable real estate portfolio. Featured Image Source: Entrepreneurs NGGot a suggestion? Contact us: editor@connectnigeria.com