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But how do you get to that destination? How do you come to have assets worth millions of naira, generating substantial amounts of money in periodic returns or sales? This article walks you through five steps to making it happen.
Clarify Your Goals for Building a Real Estate Empire in Nigeria
Ideally, the first thing you’ll do is define what your “real estate empire” would look like. Would that be a network of lands and rental property? Where would you like them to be located? What kind of cumulative valuations are you aiming for? Secondly, decide whether you’re gunning for financial independence or just running the business by the side while you retain a full-time job. Also, think about how you’re going to manage this empire of yours as it begins to grow. Do you want to do it alone all the way, or will you be hiring a property manager at some point? Be sure to answer these questions before setting out.Raise Money for Your Investment
No matter how nicely thought out your plan of building a real estate empire is, it won’t fly if it isn’t financed. You will need funds to purchase real estate, whether it’s land or a building. Here, you have at least a couple of options: use your own money or borrow from external sources. The former requires that you save up money over time—perhaps from your salary. The latter involves sourcing financing from family and friends, or from formal lenders (such as banks). You may have to settle for a mix of personal funds and external financing. Whatever you choose, make sure that you can meet the obligations they may demand of you down the line (such as paying off debt).Sign up for the Connect Nigeria daily newsletter
Find Assets that Balance Potential and Affordability
Something you’ll have to learn is finding the balance between affordability and potential in your prospective investments. You’re working with a limited budget, so you’ll want property that doesn’t cost an arm and a leg. But you also seek assets that show promise of growth in value and revenue generation. A big part of achieving this balance is identifying great locations for investment. If you only have a few million naira to begin with, you should look into property on the outskirts of fast-growing cities, or those relatively close to major projects still under construction (e.g. free trade zones, new airports, industrial estates, etc.).Scale Your Investment
When you begin to make money from your investments, resist the temptation to spend it on trivial items. Instead, plough it back by investing in even more opportunities in the real estate industry. That’s one way to quickly grow your holdings. Also remember to carry on drawing funds for your investments from your primary source of income (your job or business). Doing these things consistently for several years will place you well on your way to building a real estate empire in Nigeria. The prospect of bringing this to life should spur you on to carry on investing.Diversify Your Holdings
We advise that you diversify your holdings, in order to reduce the risks associated with owning a single type of asset. For example, if you began by investing in undeveloped land, you could eventually also build or purchase commercial or residential buildings that you could rent out. It may take a while to get to this point financially but do spread your funds over a broader collection of interests as you become more well-off.Register to attend the CN Business Mixer
Final Words
The path to building a real estate empire in Nigeria is challenging. But it will deliver great returns to you if you remain committed to the dream, stay invested through tough times, and scale strategically.Got a suggestion? Contact us: editor@connectnigeria.com
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