Read more about Real Estate
Crowd FundingYou could join a collective that pools funds from members and invests it in property. There’s the option of doing this with an already established group or starting one with people you know and trust. It’s easy to see why this could work. You may not be able to access investment opportunities with the little money you have. But if it’s gathered up with contributions from other people, the total sum could amount to something significant—enough to develop or purchase structures that can be sold or rented out.
Buy BackSome real estate companies sell property to investors and repurchase them at a later date. For example, you could buy land worth ₦3 million from a firm and resell it to that firm for ₦5 million in the next couple of years. That’ll fetch you a ₦2 million profit. At first glance, this looks like a bad deal for real estate companies. In reality, they often reap handsomely from such an arrangement. They will only agree to repurchase land if they are certain that they could make great profit from developing and selling (or renting out) property on it.
Real Estate Investment Trust (REIT)Real Estate Investment Trusts (REITs) are companies that pool funds from investors and pour them into developing and managing property. However, they differ from regular crowd funding in a number of respects. They raise funds from investors by listing equity on stock markets, and having those traded just like shares. With ₦3 million, you could purchase a stake in an REIT, and reap returns as the value of that stake rises.
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Deposit ContractIf you’re really interested in acquiring property but find that your preferred spaces are priced out of your reach, you may seek out a deposit contract with a developer. A deposit contract involves you taking hold of residential or office space in exchange for a fraction of its actual price—on the condition that you’ll pay up the remainder at a date that you and the developer agree on. So, if a space has a price tag of ₦15 million, you may commit about ₦3 million to secure it, and settle the outstanding amount in the future.
Land FlippingReal estate tends to be expensive closer to the center of major cities. But at their outskirts, you’re likely to find opportunities to invest in property on the cheap. The great thing about such places is that their prices rise rapidly. So it’ll take a relatively short while for your holdings in those districts to yield you a handsome ROI. You could buy land priced at ₦3 million or less today in this sort of location, clear the bushes in and around it, fence it off, and sell for a decent profit.
Final WordsWe have laid out five ways you can invest in real estate with ₦3 million. These tips can open up paths into the property business, and set you up for success over the long term.
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