Real Estate Investment has always been considered a good long-term investment. It is one of the top areas of investment that has contributed to the financial economy in Nigeria. It has become trendy over the last couple of years as people are making millions from it. This is because increment in house prices over the long-term investment plan. These increments tend to be greater than inflation, meaning (you are making money as time goes on).
Although, countries around the world including Nigeria, and global markets, have been rocked as a result of the pandemic that stretched across the globe. It has hit several industries hard, you're right to be cautious about investing. The good news is that the price of the property appears to be on the continual rise. Records show property prices inflated 22% in 2021!
To begin with, before you can make money from real estate, you ought to invest money. That means you need to be precise about what you are doing. There are several things you need to be aware of before you decide whether to invest in real estate in Nigeria.
Prices Are High
Thanks to the boom in prices in 2021 you're going into a market that is enjoying an increment in prices. That's whopping if you're a seller. However, if you're opting to buy you will pay more than you would have done for that same property a year or so ago. Meanwhile, this can be positive as you want the prices to be inflated.
The year 2021 saw the biggest increment in prices in real estate for the past 20 years. In essence, there is no guarantee that prices would increase in that same way again. This means investing in Nigeria is likely to be a safer bet if you're in it for the long term. Although, if you want to invest for a short-term profit, you'll need to proceed with caution, after such a big rise in values the possibility for the housing market to crash has increased.
Interest Rates
For many years Interest rates have stayed low. This means you won't have to pay a huge sum to borrow the capital you need for your real estate investment. There is little or no guarantee that interest rates will remain low, as the world recovers from the pandemic to a large extent. Making 2022 a good year to invest in real estate in Nigeria and also take advantage of the low rates before they change or get loudly inflated.
Rental Demand
The COVID-19 pandemic greatly affected people in Nigeria, forcing many people out of their homes. Causing a high demand for Housing Rental. These people will be on the lookout for new places to live and, if you're investing in real estate property to rent consideration, you will discover there are plenty of candidates in need of your property. Making it easier in covering your costs and even make profits at the beginning.
Uncertainty
Nevertheless, before you jump into real estate investment in Nigeria. All possible risks and uncertainties must be taken into consideration. Also, note that the pandemic has changed many people's life approaches and ideas. That means the traditional living arrangements could be altered. While property is still essential for everyone and real estate is a good investment opportunity, you should do well to understand what the people in your area want and focus on investing in that type of property.