5 Avenues for Real Estate Investment in 2023
By Muritala Ibraheem, CEO MISA
Generally speaking, land is, and will continue to be, an increasingly valuable asset. Owning landed assets provides the opportunity to utilize them as an income source. The Nigerian real estate industry was said to be worth about N3.96 trillion in 2020, and with the expected uptick of the industry in the aftermath of the Covid-19 pandemic, there is cause for optimism. The rapid development of infrastructure in several parts of the country also provides more evidence of the potential for further growth in the industry.
Simply put, there is money to be made in the Nigerian real estate industry, provided you are able to apply good judgment in determining what part of the value chain to invest in.
Here are some common types of real estate investments you should consider in 2023.
Residential Real Estate
Residential real estate is basically any land or property that is for the purpose of housing. Residential real estate is a trusted income stream for many investors.
Examples of these are single-family houses, detached houses, condominiums, co-ops, and country homes. Investors often start their real estate journey by making the previously owned property available in exchange for profit that might otherwise have been lost if the properties had been left vacant and unleveraged.
Commercial Real Estate
For the more mature investor looking to explore investment at a more commercial level, many options exist. Office spaces, shops, farmland, event centers, film locations, hotels, shortlets, resorts and recreational facilities are just a few examples of commercial real estate ventures to consider. Commercial properties have a high potential for profit, provided they are in viable locations in high demand.
Property Development
Real estate development companies earn profit by undertaking ambitious, expensive, long-term construction projects on their own or behalf of clients’ .Property development includes converting bare land to developed land and renovation. Property development also extends to market research and analysis, budget preparation, marketing, sourcing of funds, negotiation, project management, and many more, which means that there are many ways to become part of the property development value chain.
Real Estate Investment Trusts
Real estate investment trusts operate as trusts that gather and manage real estate investments. They provide a safe and reliable avenue for generating passive income for investors because fund managers manage trusts on behalf of individual investors. Investors simply buy stakes in the investment and reap benefits, in the form of dividends, according to their level of investment.
Crowdfunding
Crowdfunding is also an increasingly popular means of pooling together resources for real estate projects. There are many online real estate platforms, such as CrowdStreet and Fundrise. Many crowdfunding apps have strict membership regulations and accreditation to limit their services to the most eligible investors.
As in virtually every other form of business, there are risks associated with the real estate industry. However, with proper planning and due diligence, there is overwhelming proof that it is a viable and profitable area to consider, regardless of the possible hazards. This means ample opportunity to join the real estate train on the way to financial security and prosperity.
