Casafina December 9, 2021 0 Comments

Know this Before you Invest in Real Estate in Nigeria

Investing in real estate in any part of the world doesn’t come easy, you have to put in some level-headed effort to get the challenges that come alongside real estate investing behind you. People assume it is safe to put their hard-earned money into anything tagged “real estate investing,” — in reality, it hurts and can be mentally draining to find out that you aren’t making progress with your real estate investment portfolio.

It is not new that random persons parade themselves as real estate marketing consultants with the right to sell properties anywhere they wish. While this could be true for some, a lot are scams and ready to drain you off without minding the impact of such an act on you. In this article, you will understand the fundamental things you should know before investing in any real estate investment offering. Let’s get to it!

1. Define Your Investment Goal

Do you know you can perform 10x better when you plan than someone who fails to plan? A Harvard Business University study lately discovered that 83 percent of the population does not set goals and of those that do, 92 percent fail to execute them — hence a failure to achieve their goals. You are essentially going nowhere if you don’t get intentional with your real estate investment goal. Before planning to buy any real estate property, you must learn to define your investment goal. So, how do you define your investment goal?

While this doesn’t look complex, fantasizing over your hope and aspirations is far opposed to taking time to sit, glue a pen to a paper and set legitimate real estate investment goals. Fantasies won’t churn out results, smart goals and follow-up would. While you aim to optimize the full potential that comes with real estate investment, you should pay attention to your goal-setting strategy.

S M A T = Specific, Measurable, Attainable, Time-Bound

  • Set Specific Real Estate Investment Goal

Your goal must be well-defined. You will always run on an impulse to set vague and generalized real estate investment goals which don’t always provide specific direction. Make sure to narrow down your real estate investment goal to the least attainable one. This will help you forecast and manage all potential risks in advance of their occurrence.

  • Measure Your Real Estate Investment Goal

As you set specific goals while planning to invest in real estate, ensure to peg the goals you set against unequivocal values and metrics — be specific. As an example: Include a precise percentage of your net income that you can spare for real estate investment, decide on what kind of real estate investment you would love to go into from residential, to commercial, to industrial, to land, or special purposes real estate investment options. Input X amount of value percentage of returns per time to help you track quantitative and qualitative ROI. This will also afford you the opportunity not to miss out on celebrating your results as well as evaluating them.

  • Set Attainable Real Estate Investment Goal

It is important that you gauge the feasibility of your real estate investment plan. As one who is just starting in the real estate investment game, do not set goals that will erode your sanity as the sea tide erodes the cliffs. This can set you up for abject penury as a result of your bad investment decisions. However, resist setting easy goals, as the result can be anti-climatic at best and highly unrewarding. By setting realistic real estate investment goals, you would have solved over 50 percent of the heavy lifting while you let your execution plan kick in.

  • Set Realistic Goal

Imagine setting a goal of buying 50 landed properties for yourself within 2 months when you know your current financial status may not avail you of such an opportunity. That’s what most people do. They set real estate investment goals that are not realistic, considering what they have, and always end up frustrated about not earning as many returns on their investment as they would have loved to. When setting your investment goals, ensure you are realistic by asking yourself important questions such as:

  • How much money do I have?
  • How much am I buying for and what would be the ROI?
  • Is there a payment plan available for this property?

Having appropriate answers to these key questions would enable you to make a good decision and achieve your goals faster.

  • Set Time-Bound Goal

Every project lingering for success should be time-bound. Time is a scarce human resource and must be treated as such. As you do not have all the time to plan, so you do not also have enough of it to execute. Hence a need to balance the time scale between your plans and executions per time. You should apply your timeframe benchmarks both on the macro and micro levels. This will help you keep a check on how efficient and sustainable your real estate strategy is.

2. Engage a Real Estate Consultant

For every time you decide to invest in real estate, never reach out to a quack or a self-paraded real estate marketing agent without going through the proper route. Oftentimes, you save more time, cut away excesses, and get started with the business straight from day one of your conversation with a real estate professional than cutting corners. As a real estate investor, you would often seek investment opportunities with commercial real estate companies other than residential real estate owners and buyers. By doing this, you limit the risk of having a bad real estate procurement experience while unmasking the access to real estates investment instruments such as mortgage facilities, flexibly scheduled repayment plans, and more. Here are the types of real estate consulting services you should know:

  • Real Estate Investment Consulting

As a real estate investment newbie, you will always have multiple questions becloud your mind. You need professionally tailored answers yet simple for a 9-year-old to understand. A real estate investment consultant will help you answer questions about your portfolio evaluation, property valuation, investment analysis, the risk to reward sharing benefit — these are among the many other consultation services you will benefit from a real estate consultant whenever you are seeking to invest in real estate.

  • Property Development Consulting

As you step up on your real estate investment portfolio, you become a better investor and often look into options of developing projects either through a development firm or you build a team of professionals that functions under a company established by you. Your choice is subject to the skill and mastery you’ve gained over time in the real estate investing field. One thing to note at this point as a real estate investor is that you need to involve a real estate consultant to advise on your real estate development project from start to finish. This may involve researching potential locations for proposed development projects, conducting feasibility studies, and running competitive analyses. Consultants who work for real estate developers often have a background in sales or marketing, so they always have the competence to feed their partners with market trends, buyer trends, and more market insight to make the best real estate investment decisions as they advance in their real estate investment journey.

  • Residential Client Consulting

Real estate consultants do not only do commercial consulting as they look out to working with individual investors who are looking to buy a property. Their primary role to you as an investor is to help you guide and help you determine if the property you invested (are investing) in is a good investment. With their detailed professional analytical insight into the market, they can help you as a real estate homebuyer to decide whether to buy a property or not to based on your initially set goal, budget, expected ROI, and timeframe to keep your real asset.

3. Perform Your Legal Due Diligence

A key aspect of real estate investing is the legal aspect of its encompassing activities. The real estate industry is widely-clustered with complex to innovative structures. As this cultural standard of disruptive innovation has helped the industry scale and become what it is today, the legal jurisdiction of and capabilities keep increasing. From your first exposure to real estate investment practice to becoming a veteran in the space, a golden rule is to never throw your money into a real estate property or investment without marking the checkboxes for legal. This is a strong determinant of how you shield your money, time, sanity and by implication gain mastery as you grow in the space. Here are a few services a legal entity can offer you as an investor in the real estate industry:

  • Property Documentation Check

For every real estate investment decision you make, there is a corresponding legal responsibility to fit in. However, the fundamental responsibility of a lawyer who specializes in real estate and corporate laws is to ensure every supporting document required to verify the authenticity of a property is checked. While this seems to be fundamental in any practice, it bears a major percentage of wrongfully procured properties that eventually leads to loss of investment portfolio of most early investors who jump into the ship of real estate investment without taking its route.

  • Dispute Resolution Services

It is not possible that you will encounter some challenges as you surf the real estate investment terrain. A corporate responsibility demanded is to get the help of a lawyer whenever issues like this come up. A competent lawyer with seasoned experience in the real estate industry law will help come up with the most attainable yet equally satisfying decisions between the parties involved in such dispute. Eventually, to stay long enough in the real estate industry game, you will oftentimes interact with an ADR expert.

  • Mortgage Acquiring Process

As you decide to walk through the procurement process of any real estate property of your choice, you will have to decide on how to finance these processes per time. As a lot of metrics are put together to decide what type of mortgage facility option works for you, a lawyer would also help you with proper documentation to align and secure your obligations to your mortgage financier. Other extensive services like transfer of property, or transfer of ownership documentation are to be done by a lawyer.

Conclusion

If you are a rookie in the real estate investment space, never hop on any real estate investment offering without conducting proper research into the market requirements of the real estate industry. Planning your investment journey is an event that precedes fortunate achievement in the real estate investment space. As you evolve with your investment behavioral practice, you will gain mastery and hack the root of earning sizable profit and managing foreseeable risk. What would you make do with this information? Get to work, educate yourself, invest your time in gaining real estate knowledge before investing in real estate.

Investing in real estate in any part of the world doesn’t come easy, you have to put in some level-headed effort to get the challenges that come alongside real estate investing behind you. People assume it is safe to put their hard-earned money into anything tagged “real estate investing,” — in reality, it hurts and can be mentally draining to find out that you aren’t making progress with your real estate investment portfolio.

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