The fourth tip that was discussed in our last blog publication on how to turn real estate investment into fortune exemplifies the necessity to learn before earning. South and Sttes Properties Limited will be discussing another tip today. All the six tips are very important for you as a potential or existing real estate investor in Nigeria:
- Start today.
In making a fortune of over N10 billion in real estate over the course of a decade, here are three strategies that have worked for many investors:
One: Purchase a low-income property. The costs of such properties and incomes from them are low but the properties’ yields are consistent. It is better to hand-over all property management activities to a real estate company like South and Sttes Properties Limited, and collects an annual rent. If you purchase two to three properties like this per year, you will have a portfolio of 20 to 30 properties in a decade.
Two: If you can fix things in a house yourself, do a “live-in and then sell”. Buy a house that needs a little work at a great deal; live in it for one or two years while you renovate it to a profitable taste. Then sell the house for an appreciated value and profit. Doing this five times in 10 years could generate a massive net profit. This strategy has been proven to work well in most parts of the world.
Three: Try to be part of reliable joint ventures on properties’ deals. People have money; they just need the right opportunity and reliable area to invest it. Find a good property deal and tie up the property with a contractual clause, pending financing approval within 90 days. Then find another investor(s)/partner(s) on the joint venture with you. Explain that you secured the property and just need the funds for a specific period, and the returns will be shared in right ratios among investors. You need to ensure that you correctly calculate the cost of renovations and expected sale price. Most people mistakenly underestimate the renovation cost and overestimate the sale price, killing their margins.