Real estate investment has become increasingly popular over the years and for good reasons. The real estate sector is a profitable investment vehicle, providing investors with a variety of benefits such as passive income, asset appreciation, and tax advantages.
In Nigeria, real estate is a lucrative investment option where the market is expanding quickly. Back in the 90s, Nigerians have invested in agriculture, stocks and bonds, small and medium enterprises, education and of course real estate.
However it is worth noting that real estate investment particularly has brought significant change in the form of returns to the country. In this blog post we will be answering the question of “why” it is important to invest in real estate and what it really has to offer, so stay tuned and enjoy!
1. Property Appreciation
Property appreciation is the increase in value of a real estate property due to market conditions. It is the primary source of capital gains for real estate investors. Property appreciation is driven by several factors, such as economic growth, population growth, infrastructure investments, and changing regulations.
Real estate investments in Nigeria have been known to appreciate over time, with the potential for significant capital gains. The appreciation of property value is driven by factors such as location, demand, and the state of the economy.
Real estate investment in Nigeria is a long-term investment strategy that can provide significant returns in the future. Not only do you get to own an asset that can appreciate in value over time, but you also have the potential to generate rental income from it.
2. High Rental Yield
Rental yields are the amount of income generated from rents, expressed as a percentage of the initial purchase price of the property. Higher rental yields usually equate to a higher return on investment, making them a major factor for real estate investors to consider.
Nigeria’s real estate market has a high rental yield, which makes it an attractive investment destination. Rental yields in the country range from 4% to 7%, depending on the location, property type, and demand.
Generally, rental yield returns are higher in areas where the demand for rental properties is high, in comparison to areas where there is a low demand. High rental yield makes real estate investment in Nigeria a viable option for investors looking to generate passive income.
3. Low Competition
Low competition in the real estate market means that prices are more reasonable. In an area with high competition, prices tend to be higher, which could make it more difficult to find a property that fits your budget.
Despite the growing demand for housing in Nigeria, the supply is still insufficient to meet the demand. This presents a unique opportunity for real estate investors as there is low competition in the market. Investors who position themselves strategically can benefit from the lack of competition and generate significant returns.
Diversification is one of the most important reasons to invest in real estate, as it helps to distribute the risk spread across different markets, products, and asset classes. A diversified real estate investment portfolio can help investors minimise risk and achieve their financial goals.
It also provides a hedge against inflation, as the value of property tends to increase over time. Furthermore, there are tax benefits associated with real estate investment, such as depreciation and capital gains.
5. Government Support
The Nigerian government has shown significant support for the real estate sector through various policies and initiatives. The government’s efforts to improve the ease of doing business, create an enabling environment for foreign investors, and support affordable housing have contributed to the growth of the sector.
6. Stable Investment
Nigeria is the perfect location for individuals seeking consistent investment returns because of its fast expanding population and thriving economy.
Moreover, Nigeria offers a wide range of residential, commercial, and industrial real estate alternatives, providing investors with numerous opportunities to diversify their portfolios.
Nigerian real estate investments provide investors with a range of steady returns, including capital growth, improved rental income, and asset value appreciation. This in turn offers investors the opportunity to benefit from favourable tax incentives, making it an even more attractive investment option.
7. Growing Population
Nigeria has one of the largest populations in Africa, and this is expected to continue to grow in the coming years. The population growth is driving demand for housing and creating opportunities for real estate investors. The demand for housing is not limited to residential properties but also commercial and retail properties.
The population of Nigeria is growing at an incredible rate, making it one of the most populous countries in the world. This makes it an attractive investment opportunity for real estate investors. Real estate in Nigeria is still relatively underdeveloped, making it a great opportunity to buy properties and develop them into profitable investments.
Since Havvest is a company that always adds a plus to everything it delivers especially in serving you effectively, there is a plus to why you should invest in real estate and that is simply because it can be a tangible asset that you can see and touch. Simply put, it provides investors with a sense of security and stability that other investments like stocks and bonds may not offer over the long term.
How Does This Influence Your Next Line Of Action
You might be wondering how relevant these factors will be to you over the long term; well, let us worry about that for you. A little birdie once said, “Worrying makes you age quicker”. When you age quickly, you don’t get to fully utilise your potential to invest.
Real estate investment in Nigeria presents numerous opportunities for investors. The high rental yield, growing population, government support, property appreciation, diversification, low competition, and stable investment are all factors that make real estate investment in Nigeria an attractive investment vehicle. Still perplexed or looking for consultations in this field? Your enthusiasm has been rewarded, as our experts are ready to give you credible responses to your waiting inquiries. Click HERE to access them!