Investing is one of the most profitable business ventures that is bound to garner long term wealth. But it is important to note that investing in real estate is not a get-rich-quick scheme, rather, it is a long term venture. The real estate industry in Nigeria is highly profitable with different ways of earning money –
Real Estate Appreciation – This is one of the ways you can make profit on your real estate investment. This often occurs when there’s a change in the real estate market which leads to an increase in the value of your property. For example, owning a property and selling it five years later. There is a probability that you would be selling for a price higher than you bought it because of the change in the market value. The likelihood of the environment developing over the years will also increase the value of your property.
Cash Flow Income – This type of real estate investment is popular, it involves buying real estate property, such as an apartment or building, and having it up for rent. It ensures there is inflow of income through the rents paid by the tenants for a specific amount of time. Cash flow incomes are also generated from office buildings, apartment buildings, rental houses etc.
Real Estate Related Income – This is type of investments is often undertaken by ‘specialists’ in the real estate industry, such as brokers who make money through commissions from buying and selling of properties. Also, real estate management companies get a percentage of the rent in exchange for managing the daily operations of a property. For instance, a hotel management company earns a particular percentage of the hotel’s sales for taking care of the daily operations including facilities management such as hiring utility staff, laundry, security services amongst others.
Overall, becoming a real estate investor involves having a plan to help you manage your goals and expectations in the real estate industry. Knowing your maths as a real estate investor is crucial, one of the pitfalls in the business is assuming. Real estate is a numbers’ game, and the fastest way to fail is not knowing it. It will also requires a lot of patience, a real estate venture is not something to do on a whim. Most real estate investments are life-long pursuit to help you take control of your financial future.