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Quick Return on Investment (QROI) in Real Estate

WHAT IS REAL ESTATE?

It is an investment done by investor to develops, renovates or buys and resells properties. These properties may be in the form of land, hotels, residential apartments, and buildings of various kinds.

WHY SHOULD ONE BE PART OF REAL ESTATES INVESTMENT?

Globally, real estate remains the strongest and the most profitable investment. Provided you apply basic rules of prudent investment you are unlikely to fail. You will surely meet with remarkable success and build a solid wealth base.

MY FINDINGS

A good number of the world’s richest people, you probably know, build their wealth in real estate. More importantly, many started small and grew big over time. Their successes have been owed more to strategy than their capital outlay.Quick Return on Investment

The implication is even without much money, you can replicate these successes by applying same or similar strategies. Better still, develop an effective self-crafted approach.

My observation shows that the richest people around the world are the highest investors in real estate. Dangote, the richest man in Africa, is the highest investor in real estate in Nigeria. Many people are leaving in luxury flats here in Port Harcourt without knowing such houses are owned by Aliko Dangote. Adenuga the second richest man in Nigeria is the highest investor in Banana Island the most expensive neighborhoods in Nigeria. Show me the millionaire without million-worth of investment in real estate, I will show the next poor person on earth.

WHAT DIFFERENTIATE REAL ESTATE FROM OTHER INVESTMENT?

Every business or investment you want to venture into requires you understand how it works. Since no two investments are the same.

Especially for beginners, real estate investment should be seen as wealth creation tools. It should not be seen as means of earning extra income that will be disposed of as soon as they come.

Here is what I mean. Perhaps you acquire a piece of land in Port Harcourt City for N500, 000.00 today.  You may have to wait for some time before you have good return. This is unlike some other business investments that are capable of bringing in daily income. Real Estate is not about daily income, it’s about your tomorrow, wealth creation, about adding value about prudence.

Although at the medium or long run, your real estate investment could bring in more than 1000% ROI (Return on Investment). At time you may not need to wait for a very long time

Two years ago, here in Port Harcourt, we sold plots in a service estate N720, 000.00 per plot. Today in less than a year; it’s selling at N2.6m that is over 260% within two year.

Another thing about Real Estate Investment is you don’t need to do anything for it to appreciate, it appreciate naturally.

HOW CAN YOU HAVE REAL ESTATE INVESTMENT WITH LITTLE MEANS?

Many out there think they cannot have real estate as wealth creation tools because of no enough funds. I am saying stop deceiving yourself. You can start with the little you have and make it big in no time.

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HOW CAN ONE GET STARTED?

Do you accept that there is no good justification for excluding yourself from the high-yield property market? Here are some tips on how you can start on your own terms.

1. Invest in developer layout/ Mastered planned communities

This is perhaps the easiest option. Especially if you have very limited funding at your disposal: buy into companies that invest in real estate. Many companies like ours acquires parcel of land subdivide or lay it out for individual to pick their plots. In most cases flexible modes of payment are available. You can starts your real estate investment with little capital and pay over a period of time for huge investment.

In Boeing Luxury Estates, we have some investors that are not interested in land or house. Their interest is on Quick Return on Investment. They know you are into real estate, but they are not interested. Rather they need you to have this money and let them have it when they need it with agreed interest. Such interest is higher than what banks and stocks can give them.

The key attraction here is that this option is ultra-empowering.

  • It enables even a student that has just N50, 000.00 to become a real estate investor.
  • Other attractions: the company you buy into is operated by a management,
  • they have relevant expertise
  • and a pool of resources to invest even in costly but highly lucrative property businesses,
  • Indirectly giving you a bite into these otherwise exclusive market segments.
  • Such estate appreciates faster that when you buy land in an unplanned area.

2. Go For Land Speculation

For reasons of limited funding or pure investment strategy, land speculation may also prove a lucrative engagement for you. There are those who focus on this investment channel. They buy land in up-coming areas where you foresee future growth and price appreciation and wait. Often the result comes quickly. While in other cases, a protracted wait may be required.

If you choose well, excellent (sometimes outrageous) returns will be your reward. Today, much of the land spanning from Rukpokwu to Elele of Rivers State have been bought off.  You may find it these to be area largely undeveloped. Many of the owners have no ultimate plans to develop and are merely waiting for the right moment and price. They are aware the area will continue to record a more-than-average pace of growth.

If you choose to pursue this course, kindly take these words of caution.

  • Land title could get slippery, especially when you fail to develop promptly, particularly in high-demand locations like Port Harcourt.
  • Be sure you deal with rightful owners.
  • A good lawyer, versed in land matters in the area of your interest, will also be a good safeguard.
  • You may also effect some minor development, to secure effective possession, over the waiting period.
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3. Buy and Renovate

To minimize your outlay,

  • You may also target fairly worn or even dilapidated structures to secure bargain price.
  • If you buy right, a reasonable cost of modest renovation will still leave you at a comfortable investment cost.

Most times, that modest renovation you carry out will turn the property around and catapult the value. You can exit quickly, having made a decent margin.

4. Pursue Buying and Redeveloping

Buying to redevelop is similar to renovating. Except that the old structure will not count as it will be totally uprooted and replaced. A bigger investment outlay is therefore implied. This strategy will work well if an aged, unbefitting property is located in an area that commands good market value. While the environment will reflect on the price of the existing structure, if you secure and rebuild it, the value differential could be massive. It Yields a handsome return.

5. Focus on Commercial/Market Developments

Some investors focus on developing commercial outlets (stores, shopping complexes, office space, warehouses, etc) in strategic business areas. The size of such investments may vary. However we are more concerned with where a small investor could find space in this market segment. The truth, really, is that there is reasonable room for the small player. The ‘magic’, as in many investment actions, is in being motivated, committed and focused. Building a string of shops, will command high rental value and strong market price may simply require identifying, well ahead. More so identifying sizeable settlements or access infrastructure like roads will emerge.

6. Residential Accommodation Development

For cities like Lagos, Abuja, Port Harcourt various state and commercial capitals, residential accommodation will remain under pressure.  This is so given the acknowledged low ratio of the housing stock. The population growth has continued to outrun the snail pace of housing development, leaving a huge gap. Hence, if you have money to invest, real estate is not a bursting market. You can always find a location and house-type that could suit your pocket and still meet your returns expectation.

Some of the things you can do are you;

  • can buy properties and resell them at good profit within few days,
  • may not necessarily wait for eternity to make money in real estate.
  • can buy piece of land, develop it and resell it.
  • can buy some property, renovate them and sell them.

In fact, some highly smart investors are making huge amount of money on monthly bases on real estate investment.

If Aliko Dangote, Mike Adenuga, Warren Buffet, man of the moment now, Donald Trump are doing it, why wouldn’t you?

If you think we can be of help to you on your next property acquisition, e- mail us at: askme@propertymatters.com.ng or call: 09055522231

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ORY MARTINS

Ory-Martins has been consulting in management and real estate for more than 10 years now. He is Chief Executive Officer of Boeing Luxury Estate Ltd, a foremost real estate developer in Nigeria, Principal Partner, MP Hills Consulting and CEO of Inicreat PMA Ltd, a real estate consulting firm. He is an On Air Personality with major radio stations in Nigeria

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