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But as is the case with every other kind of venture, you’ll need to plan your entry into it. Doing so will help you avoid common and not-so-obvious pitfalls, and make your success at the business more likely. Here are 7 questions that can guide your planning and lay out your path to great wins with land flipping.
What Locations Should I Invest in?Nigeria offers you numerous options concerning locations for real estate investment. But they won’t all deliver the same sort of value for your money over the time spans you’re thinking about. It’s easier for you to scoop up several million Naira in profit within a couple of years flipping land in Ikoyi (Lagos State) than it would be to do so with land in Minna (Niger State). The potential for profitability is certainly something you ought to consider when weighing up possible locations for your investment.
Do I Have Enough Capital to Begin?We have just mentioned that land flipping can be relatively inexpensive—that is, compared to other ways of investing in real estate. However, it still does require some capital. The sort of sums you’ll be looking at starting with will depend on several things, chief among them being the cost of land in the district(s) you choose to invest in. Prices for a plot can vary widely; they could range from less than ₦1 million in the interiors of Epe to over ₦30 million in Lekki and environs.
How Long Am I Willing to Wait?Land flipping is attractive precisely because of its shorter time spans leading up to selling the asset in question. Many who are involved in this business prefer to present the improvements they make on the land they’re flipping as evidence of the extra value that they’re offering buyers. This way, they’re able to secure a higher payment for their land than they would if they simply sold it without improvements. But waiting a bit (say, a few months to a year) may also let you sell for even higher.
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Is this a Short, Medium, or Long Term Play?A good number of people who start out as land flippers eventually build up enough capital from the business to transition into other more expensive real estate businesses. You will need to decide if this is what you want to do, and how soon you’d like to make that transition (if you decide on it). Having this at the back of your mind will enable you to plan your selling activity so that it delivers revenues and profits that can support your long-term aspirations.
Who Are My Ideal Customers?Not everyone will be able to purchase land from you. It’s important that you understand the demographic you’ll be selling to so that you know how to appropriately engage them. They may be upper-middle-class or high-income earners with some cash to spare, or organizations that want to construct an office building of their own on the site.
Who Will I Be Buying Land From?You can either buy land from a real estate company or individual or family holders. The modalities for acquiring land from these categories of sellers may differ, so do what you can to learn what’s legally required of both parties involved before initiating a transaction. Also, don’t commit to buying land until you ascertain the genuineness of the selling company or the claim to ownership of the individual or family involved.
What Profit Margins Am I Aiming For?The location in which your real estate investment is domiciled will partly determine the sorts of profit you can make from it. The nature of the improvements you make to your land also plays a role. Typically, land that has been rid of wild vegetation, fenced, and connected to a major road via an access path will attract a higher price than one that has been left without any improvements. It’s up to you to decide what kinds of profit margins you’re aiming for and take the necessary actions to achieve those margins.
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Final WordsThere’s a good deal of money to be made from land flipping. But it’ll take a fair degree of planning and smart execution to reap decent returns from this business. The questions we’ve asked here should lead you to set up a detailed strategy for succeeding with your land-flipping enterprise. Featured Image Source: Merit Abode Nigeria Ltd
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