These days, one of the most lucrative and expanding industries is thought to be real estate. Starting a real estate business or investment, as an investor or as a real estate agent, can earn you a lot of money in Nigeria these days.
Establishing your own real estate company is a great career choice, but it’s not without its hurdles. There is fierce rivalry between both new and old firms in this well-established market. But instead of letting the competition scare you, concentrate on creating a distinctive brand that makes you stand out from the crowd.
What is Real Estate?
A property (made up of land or buildings) or an enormous collection of properties is referred to as real estate. Conversely, the real estate industry involves the purchasing, leasing, or selling of real estate, including buildings, houses, and land. Realtors assist investors, companies, and homeowners with the purchase and sale of all four kinds of real estate.
The real estate industry can be further subdivided into commercial and residential properties, loan servicing, and so forth.Undeveloped land, homes, townhomes, and condominiums are examples of residential real estate; office buildings, warehouses, and retail store structures are examples of commercial real estate; and farms, factories, and mines are examples of industrial real estate.
Overview of Real Estate in Nigeria
In Nigeria, real estate is a big deal.In actuality, the real estate sector in Nigeria is among the most established. Over time, the industry has turned into a gold mine, and a lot of astute businesspeople have tapped into it and are reaping enormous profits.
Nigerians are constantly in need of business spaces, office buildings, and residential flats. They want to either purchase or lease the buildings and structures of their choosing, and occasionally they must seek the advice of a real estate agent or other specialist before making decisions.
This explains why there are a plethora of business prospects in the real estate sector, which has been regarded as Africa’s largest contributor to GDP at number five.
Types of Real Estate Business Opportunities
There are various business segments in the real estate market that you might enter as an entrepreneur. Realistically, a real estate venture can be started with as little as zero dollars and as much as billions of naira. Everything is dependent on the specialization you select.
These are the principal ones:
#1. Real Estate Agents
Realtors and real estate brokers are other names for real estate agents. These persons are professionals with licenses who work as intermediaries between real estate purchasers and sellers, representing them during negotiations. The agent gets paid a commission, or a portion of the sale price, when a deal is made. Thus, the number of transactions you are able to close determines how much money you make as a real estate agent.
#2. Land Reseller (Land Flipping)
As a land reseller, you purchase real estate at a discount and resell it once it has increased in value. This approach costs a lot of money and requires understanding of land appreciation trends. Nevertheless, in a few years, it can yield quite good returns.
#3. Real Estate Development/Property Development
Property development constitutes another area within the real estate industry. In essence, a property developer purchases undeveloped land and transforms it into upscale residences or business spaces. Starting this also demands a substantial amount of capital—even more than flipping land.
#4. Property Leasing
In the property leasing industry, much like in the preceding one, you purchase land or construct a building, then lease or rent it out. It’s critical to purchase a facility in an area where attracting tenants would be simple if you want this firm to prosper. The majority of building owners and landlords in Nigeria request rent on an annual basis. Additionally, if you’d want, you may always sell this home for a big profit.
#5. Blogging About Real Estate
And last, blogging about the real estate sector is another area you may go into if you like to write, comment on the world, and talk about finance. People that are eager to understand the nuances of the industry are always in demand.
Two crucial abilities are necessary for successfully managing a real estate company. Firstly, there is networking. Finding the property, tenants, buyers, and sellers will be your responsibility as an agent, developer, or landlord. In-person and internet networking is quite helpful in this regard. Internet research comes in second. You’ll need to improve your search skills for reliable online information and how to use it for your work.
How Do You Start a Real Estate Business?
However, having solid knowledge and expertise in this sector is necessary for success in this industry. This introductory manual will provide you with the knowledge and resources you need to launch a profitable real estate company in Nigeria.
#1. Choose Your Niche
You must conduct study before deciding on a real estate business specialty. We provided brief summaries of the various real estate industry specialties in the preceding section. You have to do further research to determine exactly what will work best for your desired lifestyle and career objectives.
We will now delve deeper into the two extremely lucrative real estate sector careers of real estate developer and real estate agent.
Real Estate Developer
All aspects of estate development, including site acquisition, building construction, landscaping, and architectural design, are coordinated by developers. But keep in mind that building construction firms and real estate development corporations are not the same. There is some overlap, though.
Developers also stand to benefit the most in the real estate industry, despite being the most exposed to risk.
Real Estate Agent
During real estate discussions, real estate agents represent their clients. In essence, they act as intermediaries by locating customers who are in need of purchases and putting them in touch with sellers who are eager to sell. Every sale they make earns them a commission, which they might divide with other agents if they are part of a team.
The majority of agents in Nigeria get paid a commission that can reach 10% of the entire amount of the sale, purchase price, or rental value of the property. You get paid N10 million if a N100 million deal is closed.
#2. File for Business Registration
Getting a certificate of incorporation and registering your company with the Corporate Affairs Commission (CAC) is the first step in constructing your firm. This is particularly crucial for those in the real estate industry.Opening a corporate account that clients can use to make payments is one advantage of registering your business. It will also give you a more credible appearance to buyers and dealers alike.
Start the process by conducting a name search on the CAC portal. This is to ensure that the company name you have selected is not already registered under another person’s name. You can then start the registration procedure after that. You only need the bare minimum, which includes a valid ID card, passport photos, personal documents, and your signature.
As an alternative, you could get legal assistance in registering your company. Furthermore, register with real estate associations such as the Nigerian Institution of Estate Surveyors and Valuers (NIESV), Real Estate Developers Associations of Nigeria (REDAN), and the Association of Estate Agents in Nigeria (AEAN).
#3. Create a well-thought-out business plan.
To be able to dominate this market, you must properly plan your business. Like any other career, real estate investing cannot be entered into on a whim without a well-thought-out business plan.
Any real estate investor needs a business strategy, and one of the best pieces of advise in the housing market is to start small and plan, plan, plan! If your goal is to become a long-term real estate investor, this stage is very crucial. In this situation, you should deliberately expand your real estate investment portfolio.
#4. Raise the required capital to start
If you conducted thorough research for your business plan, you should have been aware of the minimal funding needed to launch, depending on the size of your company. If your starting funds and income are insufficient, you can look for other sources of finance.
The real estate industry demands a significant quantity of capital and investment. It’s crucial that you look for investors if you don’t have enough. Seeking equity investors who can provide you with sufficient leverage at the outset to expedite expansion is one option.
#5. Get Started & Get Working
Execution is the final phase in forming a real estate holding company. Implement all of the ideas you have created in your business plan. Poor execution is a major factor in the failure of many Nigerian enterprises. Your regular business actions make up execution. This covers deal closure, networking, marketing, customer service, and human resources, among other things.
It’s not for the timid to start a real estate company. Therefore, you need to be ready to take on the challenges if you want to succeed in the real estate industry. Develop your aspirations on a personal and professional level and learn to be a well-organized, goal-oriented individual. Remember that being successful in the real estate industry takes time. Rather, it’s a lengthy game that calls for a lot of endurance.
Challenges Of The Real Estate Business in Nigeria
Among the difficulties a real estate investor could face are:
- Economic Instability: The real estate business has a number of challenges as a result of the unpredictable economies in Nigeria and Africa, including the inability to forecast market trends and make long-term plans.
- Limited Financing: Investing in real estate involves a large financial outlay, and investors in Nigeria and Africa may find it difficult to obtain the necessary funds due to the scarcity of financing choices in these regions.
- Deficient Infrastructure: It is difficult to build and maintain real estate properties in Nigeria due to the country’s deficient infrastructure, which includes bad road networks, erratic electricity supplies, and a limited water supply.
- Corruption: The real estate sector is impacted by corruption, which is a major problem in Nigeria and throughout Africa. Real estate investors find it challenging to obtain the licenses and approvals needed to develop their properties.
- Ineffective Land Administration: The growth of the real estate industry is hampered by the ineffective land administration systems in Nigeria and throughout Africa, which make it difficult to secure land titles and register properties.
- High Construction Costs: It is challenging to build cheap homes in Nigeria and other African countries due to the high costs of labor, materials, and construction equipment. This hinders the expansion of the real estate industry.
- Problems with Property Valuation: Determining the true worth of properties is difficult due to inaccurate property valuation systems in Nigeria and Africa, which has an impact on real estate sales and investment decisions.
Can I Start Real Estate Business with 500k in Nigeria?
In Nigeria, one of the companies you can launch with 500k is real estate. In Nigeria, sales of real estate are conducted offline. On the other hand, you might stand out by creating an internet platform and listing several houses for sale.
Is Real Estate a Good Business in Nigeria?
One of the most prosperous areas of the Nigerian economy is the real estate business, which has been around for generations. It has fantastic investment and career opportunity prospects. There are numerous methods to enter this booming industry, ranging from real estate experts to investors.
What is the Fastest Growing Real Estate Company in Nigeria?
The only Nigerian real estate firm listed on Financial Times’ Africa Fastest Growing Companies 2023 list is Veritasi Homes.
Which Type of Real Estate Business is Most Profitable?
Due to their potential for increased income flow, commercial buildings are regarded as one of the best categories of real estate investments. The following alluring advantages could be yours if you choose to invest in commercial real estate: Higher-income potential.
Who is the Youngest Real Estate Developer in Nigeria?
At the age of 13, Akindipe began his career in real estate development as a bricklayer, and at the age of 21, he became a real estate agent. He established Ace Real Estate Development LTD in 2019, a real estate development and management business with operations in Rwanda and Nigeria.
In summary
In Nigeria, launching your own real estate company is a journey full with possibilities and difficulties. You may set yourself up for success in this fast-paced industry by adhering to the guidelines in this guide and maintaining your resolve to achieve your objectives.
It is important to invest in your real estate company’s logo since it symbolizes the identity and values of your brand and is more than just a pretty picture. Consider carefully selecting a logo that conveys professionalism and trust, just like you do when choosing properties and developing connections with clients.
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