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We will review five of these important features. If you have them in mind, you’ll be better able to spot opportunities that are worth your money.
Incoming or Rapid Development
Areas on the outskirts of established or fast-developing towns and cities are usually the next big real estate locations. There are multiple examples of this all over Nigeria, especially in cities like Lagos and Abuja. In Lagos, the Ibeju Lekki area was next in line after the property development frenzy around the Lekki axis. And in Abuja, some of the satellite districts on the city’s outskirts have seen their property values skyrocket in the past few years. If you had bought land in any of these areas about a decade ago, it would be worth several times its original price today.Demand for Residential or Commercial Space
What locations have a high (and growing) demand for residential or commercial real estate? If you find them, you will have struck gold. High demand implies that there are a lot of people competing for available spaces. This in turn means they’ll be willing to outbid others to secure those spaces. So there’s the potential for property prices to soar in the near future. How can you tell if there’s a rising demand for property? Look for locations with rapidly growing populations, plus limited shelter for their lodging and work needs. They are good places for real estate investment.Decent Purchasing Power
While rapid population growth may signal a real estate investment opportunity around the corner, it’s not always an adequate predictor for the success of your investments. You need something more: a population with a decent-enough purchasing power to pay the full value of the property you’re selling or renting out. Because, in the end, it’s they who will decide whether to give you what you think the property is worth. If they aren’t paying, you won’t get your ROI.Sign up to the Connect Nigeria daily newsletter
It’s always a good idea to think about the demographic of the area you’re investing in. Weigh their ability to pay based on the type of employment and average income levels of the people who may want the space you’re offering. They don’t have to be rich. They just have to be able to settle the bills.
Thriving Industrial or Commercial District Within Reach
This is actually a major trigger for real estate booms. Many towns and cities have grown out of commercial and industrial establishments. That’s because the people who work in those places want to live as close to their workplace as possible. Watch out for locations where there are viable plans to set up large-scale industries, or where a business district is already developing. The influx of people that will follow is a sure recipe for an emergent real estate sector. You can cash in from this if you move quickly enough. It’s also a good idea to hold property in places adjacent to established commercial districts.Return on Investment
You are gunning for a large Return on Investment. How can you tell the potential size of your earnings from a real estate investment? Perhaps you can’t be sure how much you’ll get. But you may at least work with reasonable projections. Find out how much you’re likely to spend on the project over the short and medium terms, and compare this cost to the earnings you expect to receive. A good investment should bring in incomes that consistently exceed your costs. Also, look at how much the value of your property may grow over time, as suggested by increasing demand. Do the figures indicate that you’re likely to cover your costs soon enough?Final Words
Real estate investments enable you to continuously increase the value of your wealth over time. Choose your property investments based on the criteria we’ve laid out here, and you could significantly expand your wealth in just a few years. Featured image source: NairametricsGot a suggestion? Contact us: editor@connectnigeria.com
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