Current Economic Challenges
The current economic uncertainty in Nigeria has significantly depleted the value of money saved in the bank. Many businesses are struggling to cope with foreign exchange volatility and accelerating inflation, which have eroded their capital. The free fall of the naira against the dollar has dominated media coverage, highlighting the severe economic strain.
Expert Advice: Invest in Real Estate
To secure the value of your bank savings, experts recommend investing in real estate, particularly land banking. Diamond Ilori, a real estate expert and founder of Wardiere Oakmount, appeals to Nigerians to invest in real estate to achieve financial independence amid the economic crisis.
The Benefits of Real Estate
Ilori describes real estate as the playing ground for smart investors during economic uncertainty. He emphasizes the importance of assets that hold and multiply value. Real estate, especially through land banking and strategic parcelling, is seen as a solid hedge against inflation and economic downturns.
Leveraging Real Estate Investments
Ilori advises investors to buy land in bulk to maximize returns. Large parcels of land offer lower costs per unit area and higher potential returns. By parcelling and selling quickly, investors can realize gains sooner and reinvest or pocket the profit before inflation erodes returns.
Strategies for Real Estate Success
Buy in Bulk
Buying land in bulk reduces costs per unit area and increases potential returns. Investors should think big to win big and slice large parcels into smaller, more marketable pieces. Smaller parcels are easier to sell and quicker to move.
Partner with Professionals
Team up with real estate professionals who know the market. They can help move parcels quickly and boost your bottom line.
Diversify Investments
Diversifying across multiple smaller parcels reduces risk and increases stability. If one market dips, others can keep you afloat.
Step-by-Step Guide for New Entrants
Josphine Amadi, Executive Director of Omoluabi Empire Holdings Limited, provides a step-by-step guide for new entrants into the real estate business.
Hire a Professional Property Manager
Managing a commercial property requires skills and expertise. A property manager can help with tasks such as marketing, leasing, rent collection, and maintenance. They can also increase your property’s value and performance.
Manage Your Cash Flow
Cash flow is crucial for any commercial real estate investment. To protect your cash flow, manage your income and expenses effectively. Strategies include increasing rents, reducing vacancies, adding value-added services, and improving tenant retention.
Insure Your Property
Insure your property against risks and damages, such as fire, flood, and theft. Consult with an insurance agent or broker to assess your risks and find the best insurance options.
Diversify Your Portfolio
Diversify your portfolio across different property types, locations, and tenants. This reduces exposure to specific market segments or regions and allows you to take advantage of various growth opportunities.
Conduct Thorough Due Diligence
Before buying or selling any property, conduct comprehensive due diligence. This includes reviewing the property’s title, leases, income and expenses, environmental reports, zoning regulations, and inspection reports.
Stay Updated on Market Trends
Monitor market trends and conditions affecting your property’s performance and value. Stay informed about supply and demand, vacancy and occupancy rates, rent levels, and economic and demographic factors. By staying updated, you can make better decisions and adapt to changing circumstances.
