Nigerians abroad want a piece of the country’s most profitable investment offerings. They want to own assets located in their fatherland, for several reasons, including relatively high ROI in percentage terms, and a stake in a country to which they still have some attachment. Many in this category choose to invest in real estate in Nigeria.
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While the returns from real estate might seem attractive to Nigerians in the Diaspora (especially when exchange rates are relatively stable), there are also attendant risks that they need to navigate carefully. Not a few Nigerians abroad have lost thousands of dollars to investments in property that went south.
If you’re a Nigerian who lives elsewhere in the world and wants to invest in real estate back home, you’ll find this article helpful. In it, we’ll explain how you can make secure investments in the Nigerian real estate sector. Here are the steps you should take:
Define Your Investment Goals
There are lots of reasons a Nigerian who isn’t living in the country would want to pour his or her hard-earned money into property. Sometimes it’s about generating cash flow through rental payments. In other instances, they’re building a retirement home. And in several cases, they’re just holding the physical asset for its value appreciation, and hoping to sell it for a large profit later on.
Whatever your reason for investing in Nigeria’s real estate sector, just make sure that it’s unambiguous. The clearer your goal is, the better your chances of achieving it.
Research the Market and Location
Nigeria’s real estate market is not uniform. Property value, demand, and risks differ across states and cities.
For example:
If you’re looking for an established market, the first-tier cities (Lagos, Abuja, Port Harcourt, etc.) are the places to consider. But if you’re investing in the cheap and desire exponential value growth, places like Enugu and Ibadan might be the better options for you.
When deciding, consider things like infrastructure development, security, land appreciation, and community growth before settling for a specific location.
Work with Reputable Real Estate Companies
Instead of relying solely on friends or relatives, you should deal directly with registered real estate developers, estate surveyors, and property firms that have verifiable track records. They should be registered with the Corporate Affairs Commission (CAC) and relevant professional bodies (if you’re working with individuals).
You may let your relatives in Nigeria take care of this if you really trust them. Sadly, there are numerous cases in which relatives have mismanaged funds sent to them for this purpose. It’s important that you note this while planning your investments.
Engage an Independent Lawyer
A common mistake that investors make is trusting property sellers without legal representation. If you do this, you will increase your risk of being defrauded by malicious actors.
You should hire a real estate lawyer in Nigeria to help you with these things:
- Conduct due diligence on the land or property.
- Verify the title documents with the state land registry.
- Draft and review contracts. This protects you from fraud, fake ownership claims, or double sales.
Verify All Property Documents
The important documents (land titles) you should verify are:
- Certificate of Occupancy (C of O)
- Governor’s Consent
- Deed of Assignment / Conveyance
- Survey Plan
- Allocation Letter (for government schemes or estates)
You should confirm that these documents from the seller or their representatives are authentic and registered. Only proceed with a purchase after determining this.
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Avoid Cash Payments; Use Secure Channels
One thing you should watch out for is people insisting on payments in cash. Scammers do this because they are trying to avoid being tracked. Always insist on bank transfers so that payments are traceable. You should request official receipts and payment acknowledgement. If you’re dealing with a company, ensure that transactions go through verifiable company or law firm accounts, not personal accounts.
Appoint a Trusted Lawyer
Since you may not be physically present, you can appoint a lawyer or trusted representative as your Power of Attorney. This allows them to sign documents, complete registrations, and handle transactions legally on your behalf while keeping you updated.
Use Technology for Monitoring
Thanks to digital tools, you don’t need to fly home for every step. If you’re dealing with reputable developers and lawyers, they can provide things like virtual property inspections via video calls, drone footage and regular photo updates; and digital document sharing and signing.
These technology-supported solutions will keep you informed and prevent you from incurring unnecessary travel costs.
Start Small and Scale Gradually
If it’s your first time, start with a smaller investment (such as a plot of land from a trusted estate company). Once you confirm credibility and see results, you can scale up to building houses, rentals, or larger projects.
Beginning with relatively small investments will also keep you from losing significant amounts if your first foray into this area fails. This way, you learn valuable lessons about Nigeria’s real estate sector without racking up really painful losses.
Secure and Manage Your Property
It doesn’t all end with buying property. It’s equally important that you secure and maintain the property. If you’ve purchased property, you should go on to build a fence around it or develop the land to prevent encroachment.
If it’s a rental property, hire a professional property manager to take care of it and handle tenant relations. There should also be people who can visit the sites regularly. Digital check-ins, where possible, are also vital.
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Final Word
Nigeria’s real estate sector is undoubtedly a wealth generator. But investors must beware the pitfalls that exist within it. This warning is particularly crucial for Nigerians in the Diaspora, who have to rely on people back home to oversee things. We hope that the steps we’ve shared here will make it easier for Nigerians who live abroad to participate in the local real estate market and reap the rewards that it offers.
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