Nigeria has been growing at an impressive rate over the past few years. The country is currently ranked as the sixth largest economy in Africa and the seventh largest in the world. It is also home to the most populous city in Africa, Lagos.
Find out what type of property you need.
There are two main types of real estate investments in Nigeria: residential properties and commercial properties. Residential properties are usually apartments, houses, villas, etc. Commercial properties are offices, shops, warehouses, etc.
What Is Residential Property?
The most typical form of residential real estate is a single-family home, which is real property (land and any buildings on it) utilized for residential purposes. Those properties designated exclusively for commercial use are known as commercial real estate (apartment buildings, office buildings, hotels, etc.). Not that residential real estate can't make money, mind you. Residential property owners have two options: they either live in them and sell them for a profit when home values rise, or they can rent out their homes for passive income.
4 Examples of Residential Real Estate
In the residential market, there are a few typical categories of real estate.
Standalone houses: The most prevalent kind of residential real estate comprises single-family homes situated on their own lots of land.
Townhouses: Also known as townhomes, townhouses are independently owned, frequently multi-level homes that share one or two external walls with other properties.
Condominiums: A condominium (or condo) is an individually owned residential unit that is part of a community that includes other units, such as townhomes, high-rise structures, or a condo complex. Unlike apartments typically held by large corporations or property management firms, condos are frequently owned by an individual in joint sovereignty with a condo owners organization (COA).
Multi-family houses: Two- or four-unit residences, respectively, include duplexes and fourplexes as examples of multi-family homes.
An explanation of commercial property
Immovable property used for business is referred to as commercial property. Generally speaking, commercial property includes larger residential rental properties as well as buildings that house businesses and land that is meant to be profitable. The financing, tax treatment, and laws that apply to a property depend on whether it is classified as a commercial property.
Commercial Property Analysis
Shopping malls, grocers, office buildings, factories, and other businesses are all included in the definition of industrial land. Sales prices, new construction rates, and occupancy rates for commercial property are just a few examples that are frequently used as proxies for business activity in a specific region or economy.
Comparing investing in residential versus commercial property
Historically, investors have viewed commercial real estate as a secure investment. Compared to residential real estate, the building's initial investment costs are much higher, as are the maintenance costs for tenants. However, the overall returns are higher, and dealing with a business and simple leases eliminates some of the typical issues that arise with residential tenants.
Research the market.
Before you buy any type of property, make sure you do some research into the local market. This will help you understand what kind of return you can expect on your investment. You should also consider how much money you need to put down as an initial deposit.