Buying or selling a home is one of the biggest investments you will make, especially in developing economies like Nigeria. There are many ways to approach this investment depending on your budget and timing. The best way to purchase a home depends largely on your goals and what type of house you want to own.
There are two main types of homes that people buy in developed countries such as America and Europe. These are either owned by individuals (or “single-family” houses) or large corporations (or “multi-unit” apartment buildings).
In most cases, individual homeowners prefer buying a single family home because it gives them more control over their space and they can customize it to fit their needs. This is not the case for investors who may desire a quick profit margin from renting out an apartment.
The second type of housing stock is the rapidly growing market of pre-fabricated apartments and townhomes. People have begun investing in these manufactured homes due to the cost savings versus building a house from scratch.
This article will go into detail about both types of homes and which ones are better suited for different people. It will also talk about some things related to real estate in Nigeria so that you are well informed.
Factors that affect the price of real estate in Nigeria
There are several factors that play a significant role in determining the value of a property. These include the location, number of rooms, if there is an assigned function to the house, and how close it is to local amenities.
The size or area of the lot also makes a difference. A larger yard will usually fetch higher prices as will have better views.
Other features like garages, swimming pools or rooftop solar panels can add to the value too.
If you want to sell your home, make sure it’s in good condition and show it off!
Realtor.com has some great tips for sellers who wish to increase the saleability of their homes. Read more here.
History of real estate in Nigeria
As we all know, owning a house is an important part of being wealthy. It is also one of the most expensive things we can own, especially now when housing prices are skyrocketing across much of the world.
In fact, some countries have made it difficult to be rich by making it very hard to afford a home. In China, for example you need lots of money and excellent connections to buy property, while many developing nations make it virtually impossible to do so via a high income tax rate.
There’s another way that some nations limit access to homes though, and it goes against what people say about ‘the middle class’ – they don’t like it. This is where governments restrict how much residential land people are allowed to possess, or even ban them from having any at all!
Land is a valuable resource, which is why there are often rules put forward to regulate how much people are permitted to hold onto. Such laws typically refer to this as ‘ownership limits’, but some call it ‘land ownership restrictions’ instead. These include outright bans, such as in Iran, and caps on how much acreage you are allowed per person, such as in France.
Real estate laws in Nigeria
As mentioned earlier, real estate is not an easy concept to grasp as there are so many differences across countries. Some of these include what defines your property as ‘land’, what kind of properties can be sold (e.g. houses or apartments), if it is limited by land area, how much income each owner requires from their house, and more.
In some countries, people are even able to build higher than what regulations allow due to lack of space, while others have no height limits at all! This article will go into detail about some of the most important legalities of real estate in Nigeria.
Buying real estate
As we mentioned before, buying or investing in real estate is an expensive process that requires you to do your research thoroughly!
Before you even pick out what property to buy, you will need to know how much house money you have. This includes paying down existing loans, fees for owning a home, and transfer taxes.
It’s also important to understand the different types of mortgages available so that you can choose the right one for you. There are fixed-rate mortgages, adjustable rate mortgages (ARMs), and interest-only mortgages.
Once you have determined how much money you have, then you can start looking at houses and budgets more closely. Find out if there are any tax breaks for homeowner’s benefits such as the mortgage deduction. Also look into whether it is better to purchase a fixer-upper or if it is best to go with a pre-existing model.
Lastly, check out local community events and get to know some of the other people living in the area.
Selling real estate
As with any business, selling property can be both easy and difficult. It depends on your market, what type of house you have, and how motivated you are to sell it!
Selling an average home will take around one month depending on the number of days per week that people go through the process. This includes going up for the sale, taking pictures, advertising, getting offers, negotiating, and then finally closing.
The length of time needed for a sale varies greatly due to different markets and competition. There is no set rule about this as every seller’s situation is unique.
What most sellers don’t realize is that they must advertise their homes not only locally but also online. Many times potential buyers find the information themselves but never actually contact the owner!
By having all the necessary advertisements done before hand helps get those potential clients into the house quickly.
Applying for a mortgage
When you are ready to buy a home, the next step is applying for a loan. This can be done through your lender or directly with the property seller.
Most lenders will require you to prove that you have enough money to pay off the house before they give you the credit. They also want to make sure that you can afford to repay the loan over time.
This is where your income and savings come into play. Most lenders do not offer loans up to 100% of the price of the house, so they look at how much you earn compared to what you spend. If you cannot show that you have enough left over to live on, then they will deny you the loan.
Many banks now use something called an online lending platform to process most of their mortgages. These sites let you apply from anywhere with internet access, which makes it easier to get a loan quickly.
Popular areas of real estate in Nigeria
There are several popular neighbourhoods or suburbs in cities across Nigeria that have seen an influx of people investing in property. These include: Ikoyi, Lekki, Victoria Island, Ojora/Oshodi, Alimoshu, Mushin, Banana area, Idoaniwa-Africa, Itaba-North, Gbolagbureh-South, Omotoso, Onyeka Nkuta, Ughellukayo, Agege, Oshodi, Otori ward, Surulere, Mbanefulo, Ajao, Agbowa, Victoria Island, Mile 2, Broad Oak, Aigogo, Adetokonamte Road, Tinapa, Isolo, Kadeola, Shitta, Ogbebo, Obalende, Oyebuchi etc.
These locations offer easy access to public transportation and facilities. They’re close to schools, shopping centres, hospitals and other attractions. Many have vibrant night life scenes as well as parks and green spaces which is very valuable when spending time outside during daylight hours.
Tourist destinations like Ikeja, Lagos can be visited easily from most parts of these neighbourhoods.
Cost of living in Nigeria
As we have seen, real estate is not an easy industry to enter into in Nigeria. However, there are some costs associated with buying or renting a property that people often forget about when talking about investing in this field. These additional costse include fees for brokers, owners selling their properties, legal documents and closing costs.
The most common way to purchase a home is through a broker. A broker is someone who gets paid by both you (the buyer) and the seller to facilitate a sale. Brokers take a percentage of the sales price as their commission! This can add up quickly if you are looking at expensive homes.
There may also be owner’s agents involved in the process which will typically require you to pay them a fee per person covered under your insurance policy. If the house has been listed before you bought it, they too will get a fee for bringing the house to your attention.
Legal documents must be drawn up properly so that no one cannot claim against you later on. There are many lawyers in the Nigerian market that offer his services for a low cost, but you should always do your research first!
Closing costs refer to things such as title searches, survey reports, mortgage applications and other related documents. These are very expensive due to the fact that most companies offering these services charge quite heavily for them.