Why you should invest in Real Estate
Over the years, real estate investments have been a thing for those in the top positions, financially adequate, have strong connections, and have good brains with money. That was until the market was modified and more real estate investment opportunities opened up to anyone and everyone from rich people to those in the middle class. Because people believe that being a (profitable) property investor should be a far-fetched idea if you are not among the lucky few. Asides from you, there are so many people out there looking for several investment opportunities to invest their money. Sadly, they shy away from one of the many investment opportunities in Nigeria with great ROI. That opportunity is the real estate sector because land never depreciates.
Keep reading and you will understand how to buy cheap land and re-sell for 3X the price. What is Land Trading? If the term “Land Trading” is new to you, you probably have one question: what is it? And closely followed by, “why should I invest in it?” Land trading is a real estate investment opportunity that involves buying undeveloped land at a reduced amount with the intention of holding onto it for a while and reselling it for profit at a future date when the price appreciates. You the Investor acquires land by tracking locations, which are best for investment, based on social infrastructure and demographic factors (Population).
At the end of your due diligence, you acquire lands, protect them, wait for the land’s value to appreciate, and then resell the same to other interested parties in bits or as a whole for a substantial profit. The beauty of this investment is that you can acquire these lands, fence them, and go about your life. No monthly maintenance, no additional cost, except for clearing which costs a couple thousand. Nothing else. An investment that guards your money, multiplies your money, and still guarantees your freedom. What can beat that? The stock market? Think again.
How Does Land Trading Work? A lot of large real estate development companies in Nigeria engage in land trading. After thorough research on locations prone to quick appreciation and development, these companies buy undeveloped land, farms, and other greenfield sites to add to their existing portfolios. These portfolios can be considered as their “bank”. This practice enables developers to have a ready stock of land for any future property developments. These land trading and investment companies help investors put their funds into purchasing undeveloped lands from their land portfolios; investors hold them for a while intending to resell them at higher prices for maximum profit.
It is important to note that land trading is an investment strategy open to both large property development companies and also smaller private investors like you. The only difference is, that smaller investors would be acquiring smaller parcels of land due to obvious capital constraints. How Much Money Can I Make By Investing in Land Trading? While regular banking investments offer very low-interest rates, land trading investment has created an opportunity for you to earn as much as 40% returns on your investment within a year. Some land trading investment companies even create an avenue for ROI to be 50%. The lowest return on investment you can ever get on your investment is 15%. This is still higher than the average stock market return.
Reasons Why You Should Invest in Real Estate Properties
1. Appreciation of the land’s value The cost of acquiring land, as observed, always goes up and hardly ever comes down. Land trading has proven to be a good investment strategy given that the value of land keeps increasing, this is true globally. Land is one of the assets that have the potential to appreciate over a more extended period, so investing in land that has high development potential at the current or lower market value ensures maximum returns to the investor. Why wait to buy, when you can buy and wait.
2. Value addition If you understand the two types of property appreciation, you should be able to use them to your advantage. You can decide to make improvements to the land which will make it more valuable. You can do this by fencing, obtaining property development approvals, and then, over time, proceeding with property development. Value addition makes the land more attractive for developers, who may be willing to pay a premium for it. Alternatively, you may opt for financing and continue with property development.
3. Minimal Start-Up capital Untapped, vacant land is generally the cheapest type of real estate to be found. It’s not until expansion and development occur that property begins to increase in value.
Hence, if you know where to look for great deals on land, it requires minimal start-up capital to get your business up and running. It’s a type of investment that doesn’t necessarily need you to have millions of naira.
4. Undeveloped Land is a Hands-Off Investment Think about it, land is easier to manage than built-up properties that require being kept in reasonable condition. No utility fees, no tenant problems, no dealing with problems like leaking roofs, burst pipes, and other hundred issues with owning buildings. Vacant land doesn’t involve any of those things. Once you buy it, it sits there, and nothing happens. No stress!
5. Land is cheaper to Own as a Long-term Investment Land is relatively abundant and thus cheap in some developing parts of the country in Lagos state are like Ibeju Lekki, Epe, Badagry and Ikorodu. As an intelligent investor buying this vacant land offers you a more accessible and more affordable way into the real estate market. If you buy a piece of land for the right price, Land trading is the type of investment you use to keep your money stored somewhere for a while. Your asset sits quietly in the background, costing you almost nothing and silently increasing in value.
6. Generate Remarkable Income Before You Sell Land can generate income while waiting for future economic development. A great example is leasing it out. Land in a rural farming area can bring you an exciting income stream when you lease the land to farmers to be used for agricultural purposes. You may also be able to harvest the trees through logging on your vacant land with woodlands. You can also sell mineral rights to designate who can profit from the resources on the land. This can generate an income stream while you sit on the ground. If that is not a good deal, I wonder what is.
7. Lower competition In this real estate investment niche, there’s low competition. Most people (especially those with a lot of investment capital) are focused on the shiny and glamorous aspects of real estate investment – condo buildings, developments, house flipping, and multi-units. It’s not their fault; almost everyone is focused there. If looking to buy undeveloped land, then a significant advantage is the smaller competition you will face. You can find the land that meets your criteria in no time, and you can still negotiate to get a better deal time.
8. Subdivide For Land Sales You can increase the total land value of your investment by separating it into smaller plots and selling them individually to buyers. It is a viable strategy because it might be easier to find a buyer for a smaller, more affordable parcel of land, as opposed to one large lot. In many cases, the subdivided land can be more marketable and also valuable than the whole. The subdivision process of raw land consists of two parts: mapping and legal documentation. The mapping aspect refers to the proposed subdivision area and how it should be defined. At the same time, the legal documentation involves submitting the proposed subdivision, which generally includes an application and fee, to the land registry.
9. It is a finite asset One of the biggest reasons you should invest in land is that it is a finite resource. New residential high-rises will continue to be built, but only a limited amount of land is available for ownership. Because of this, you can be sure that your investment will constantly be in demand as a result of which, its price will continue to appreciate. Investing in a plot of land is undoubtedly one of the best options for individuals looking to gain high returns with minimal risk. You wouldn’t be reading this if you do not want high-return investments with minimal risks. It is safe to say, you are that individual.
Why is Land Trading a Better Investment Opportunity than most Forms of Investment? Owning Land is a safe investment and it will always be in demand for one reason or another. Owning Land is very inexpensive as a Long-Term Investment. You can grow your returns quickly. Land trading remains one of the different types of investment that has a low tax rate. Land trading is a perfect investment that doubles as a retirement plan. There will always be value in your land. Other investments can leave you with little to no tangible asset value, such as a stock that can dip to zero, real estate can never go to zero under worst-case scenarios.
Final thought Research has shown that land investment is without question one of the best investment schemes to go into. It comes with a guarantee of great profit returns in the scope of five to seven years. This is assured because it has proven to be one of the most profitable short or long-term businesses. With regards to real estate investing, investors often utilize only one of two strategies: Buying a property and flipping it quickly Buying a property to bring in passive income: rental income Land trading is a great alternative investment strategy: specifically for investors that just want to invest, wait and forget. Isn’t that what you want?
After thorough research on locations prone to quick appreciation and development, they put their funds in any investor going into land trading investment. It is necessary to be conversant with essential highlights like how to spot a good investment opportunity, when to buy land, when to sell, when to develop, etc. When you go into land trading, the best time to sell is when the land is situated at a developing stage. Land almost always appreciates and is relatively cheap to acquire in Nigeria. Lagos is one of the best places to buy land in the country. Simply buy some plots near a soon-to-be developed district, wait, and bank (profit). If you are just starting out, I highly recommend you partner with a real estate firm with a proven track record.
One last thing, as the Newest Member of the Halleys Homes Family, we offer you free legal consultation on trading real estate and enjoying 40% profit in 6months. Send a WhatsApp message to +(234) 810-908-4285