Top 10 Real Estate Business Ideas In Nigeria
When we talk of big investments and businesses one can invest in to earn double, and, triple proceeds, that should be real estate.
Most big people now want to get involved in the real estate business today.
Real estate has been witnessing a rapid turnaround from what it used to be years back.
In the contemporary world that we live in today, people want to live in luxurious structures that are well furnished and beautiful.
This has brought in the real estate business.
Most celebs and rich people no longer build houses themselves from scratch to finish due to the stress and money that goes with it.
What they do is simply contact people in the real estate business to help locate/sell/lease to them good buildings in a good location.
One special thing about the real estate business is that demands are high since shelter is a necessity and luxury is desired by many who can afford it.
Many real estate firms and agencies are springing up each day.
New estates and residential areas are being developed by government and private individuals every day.
A few of these include the Eko Atlantic City in Lagos, Banana Island, Awka Millennium City, and so on.
Real estate isn’t just about selling or buying properties; there’s much more to it than that.
It includes many concepts such as buying and selling land and houses, leasing or renting properties, developing new residential areas, and transforming ordinary structures into luxurious ones, to name a few.
Before discussing the main topic on the ground, we would like to differentiate between these two entities in the real estate business which are often confused for each other: real estate agencies and real estate companies.
Real estate agents in Nigeria often help landlords caretake their buildings, help land owners find buyers, and help people find houses or structures to lease or let.
Most big real estate businesses today started as agents.
They earn commission from the proceeds.
While real estate companies are bigger, they buy properties: land, houses, office structures, etc., and resell them to make profits off of them.
They do develop estates and residential areas and lease or let them out to people.
Aside from that, they also build and let out shop buildings and office space to people.
A real estate company may decide to buy 3 hectares in a place where they are sure to witness growth in a few years at a price.
They erect different structures and turn them into a brand new estate.
In a few years, when the cost of buying the land and erecting those buildings has escalated, they might decide to sell it off or rent it out and make a profit off of it.
However, there are lots of real estate business ideas and opportunities you can grab now if you are determined to go into the industry.
Many average people are bagging millions in real estate today.
I know of someone who started by going around construction sites and residential areas to meet with landlords to see if they could give him any of their houses to caretake.
But right now, he has grown to become one of the big wigs in the industry today. So what matters is not only the capital.
Determination, hard work, and dedication are the main steps to achieving a big feat in the real estate world.
We decided to create this post to discuss those great real estate business ideas you can make use of when going into the real estate business.
1. Property Development
Property development is probably the highest rank in the real estate business.
This is a result of the large sum of money pumped into it.
And indeed, this is exactly where the real money is.
A real estate investor can earn twice, or even thrice, the amount of capital invested into the business.
Real estate developers often work with many professionals in both the legal and construction industries, including engineers, contractors, architects, supervisors, accountants, surveyors, lawyers, and many others.
Real estate companies buy properties like houses or office space in nice places and develop them into more beautiful and luxurious structures and then sell them off to make profits off the money spent.
However, you must be mathematical in this or risk incurring a large loss: simply compare the money spent on purchasing such properties to the money spent on developing them before deciding on a price at which to sell them.
This is to know how much that will be very profitable for you.
Let’s take, for example,
You bought 2 plots of land at Ikoyi for N100 million.
You then spent N120 million to erect luxurious structures on them.
Selling such developed property at N450 million, isn’t that very profitable?
That’s exactly how big real estate investors make a lot of money.
2. Land Reselling (flipping)
Land flipping or reselling is also one of the big sub-niches in the real estate business.
What you do as a flipper or reseller is to buy many plots of land in a developing area and then resell them when the price at which you bought them has appreciated.
You should buy land in fast-developing areas so that you can maximize profits when selling in a few months or years.
However, there are certain precautions you should take before buying any land so as not to end up losing money.
Some of these include:
1. Purchase land only in developing areas where the price is likely to rise in a few years.
2. Make sure there’s a legal agreement between you and the seller (s).
3. Obtain C of Os as well as other necessary land documents and certifications.
4. It avoids buying land that has court issues.
3. Property Management
Becoming a property manager is one of the cheapest ways to make huge profits from the real estate business.
You help landlords manage their properties and earn a certain commission on the rents you bring in.
Most property agents usually charge first-time occupants a fee known as an agent or agency fee separately from the rent fee.
4. Open Space Leasing(leasehold)
This is a type of real estate business whereby you buy land and leave it till the price appreciates before leasing it out to people temporarily.
That is, they will hold tenancy of land till you want to make use of it yourself.
This may be for months or even years, depending on the agreement between you and the leaseholder.
For example, different people, agencies, workshops, kiosks, playgrounds, churches, food canteens, container shops, etc., may lease land from you.
They pay you either monthly or annually for it till you want to use the land.
Any structure they erect on such land must be movable or easily dismantled.
You can decide to build structures on it or sell it at any time.
Some of this land can sometimes be used for agricultural purposes, and you might decide to have a share of the agricultural proceeds from the land as your pay.
You can lease your land out through real estate agents or property consultants or online through platforms like Jiji, property, and so on.
5. Purchase or Build Rental Structures
This concept is very similar to the leasehold.
Here, you buy a property or build a structure and put it out for rent. Rental properties and structures may include houses, office or retail space, and warehouses.
This type of business is much more profitable in big cities like Lagos, Enugu, Port Harcourt, Abuja, and others, where the cost of housing is very high.
If you have 10 to 50 2 bedroom flats in those big cities, you are bound to make millions of naira from them yearly.
It is much better to invest in this kind of real estate idea rather than stockpiling your money in banks, which brings you no gain at all.
Tenants in some cities pay monthly, for many years, while some only accept biennial payments, especially for first-time occupants.
6. Invest In Real Estate Investment Trust funds (REIT)
A real Estate Investment Trust fund (REIT) is a real estate company that owns, controls, and manages different real estate properties.
They operate by collecting resources from different investors and then pooling them together to acquire, build, and develop different real estate properties.
The proceeds from the investments are shared among investors in the percentage of the sum invested by each of them as a dividend.
REIT offers you the chance to co-own real estate investments without having to buy, sell, or develop any property yourself.
They do all that with the money you and other investors pooled together and share the proceeds amongst you and other parties, just like company shareholders enjoy dividends.
However, this usually involves different agreements and paperwork between you and the REIT.
The company is traded on the stock market, thus making your investment liquid.
REIT is also known for investing in the development of big mansions, estates, hotels, shops, malls, hospitals, and so on.
Some of the advantages of putting your money into this company include:
- There is no fixed amount set for the least investment, meaning you can invest as little as you have.
- You don’t have to worry about paying taxes like when you buy, own, or sell these properties yourself.
- Investment returns are often high.
- You don’t need a realtor to earn profits since it’s a liquid investment.
- You indirectly become a co-owner of big structures like malls and buildings.
7. Become a Real Estate Agent
What you do as a real estate agent is simple.
Anyone who wants to lease or rent a property will come to you to ask if there’s any available.
If all goes well, and they end up buying or renting a property through you, They pay a certain commission to you.
Most landlords now register their houses with real estate agents because it’s easier to get tenants or buyers through them than directly.
As an agent, you can also help people who want to sell properties find buyers and vis-a-vis.
8. Become a Property Consultant
This is also quite similar to being an agent because some agents also do this.
People who wish to acquire land or other properties come to you to help them find one that’s suitable for them.
Here, you function as a middle man between a buyer and seller.
Assume someone approaches you in your office or website (which could be online) and requests that you assist them in locating plots of land for sale in a specific area.
You help them search for plots of land available in that area.
If the owner wants to sell for N500,000 per plot, you can tell the buyers there is one available for N590,000.
So when they buy, you make a profit of N90,000. It’s just like affiliate marketing.
9. Refer People To Agents
This is another small but lucrative way you can earn from the real estate business.
I could remember when I was still an undergraduate student back then. Once freshmen start coming on campus, demand for lodge and hostel space rises.
Thus, real estate agents often offer us three thousand naira for each student we refer to them.
Imagine you can get lodges for 50 students out of the thousands admitted, for them.
You will be earning close to 150k with no stress or investment. Isn’t it cool?
Well, this is not limited to students alone.
Non-students can refer people who are seeking apartments to let or lands to acquire to some agents, and you in turn get a small commission on each buyer or tenant referred.
10. Become a Caretaker
This is mostly an optional step opportunity for trusted tenants.
They help landlords monitor their houses, coordinate with other tenants, and collect rental fees, electricity bills, caution fees, water fees, etc.
Some landlords do pay them for this service, but if it’s a big apartment, they don’t pay house rents as a reward for their service.
After the oil industry, real estate is currently where everyone wants to put their money in Nigeria today.
What’s unique about the opportunities in real estate is that there’s no fixed amount to start with.
You can simply start with any of the least ideas we explained in this post. With time, consistency, and hard work, you can achieve bigger feats.
The real estate business is a gold mine as returns from investments are usually high.
However, when acquiring or selling any property, you must do it legally by getting important government documents to avoid losses or getting into problems that may come with it.