The Real estate industry in Nigeria is growing by leaps and bounds. Despite this growth, some people who are seeking to invest do not know where to start from, or the types of property to buy in Nigeria; and so are scared of letting their money go down the drain as a result of wrong investment.
Knowing the types of property to buy in Nigeria largely depends on factors such as your budget, preferred location, intended use, expected return on investment (ROI), personal preferences, and many more. By considering these factors you can effectively narrow down your choices to properties that offer the growth potential to your investment.
Here are the Top 4 Types of Property to Buy in Nigeria
1. Commercial Property
A commercial property, unlike a residential property, is a real estate investment that’s mainly used for business activities to generate income. A commercial property is intended for use by businesses, companies, or organizations that offer services to the public. Most commercial properties are leased for periods longer than one year, some are leased for as long as 10 years. Here are some examples of commercial property.
Shopping Malls or Office Buildings
Shopping malls are highly lucrative due to Nigeria’s growing population. As the middle class continues to expand, there seems to be an increased demand for consumer goods. These goods are typically best marketed in retail spaces or shops found in shopping malls.
These malls function as hubs offering a range of consumer products for the expanding population, providing consumers with convenient access to products that are both timely and reasonably priced. The sense of comfort and satisfaction experienced by a Nigerian visiting a shopping mall also contributes to the rising popularity of these establishments.
It is generally believed that shopping malls located strategically, usually get fully rented out within three months of completion. Although building a shopping mall requires a lot of money, especially if it is in a strategic location, it is however a lucrative investment that brings you rewarding returns on investment for a very long time.
Much like shopping malls, office buildings are in high demand. Many companies are springing up on a daily basis and most of them want an office space where they can operate from. Investing in an office building is an investment that has no shortage of tenants all year round.
Event Centers
Many Nigerians, especially in the southern part, love celebrations and festivities. The growing fondness of Nigerians for parties and social gatherings always drives the demand for event centers to meet this need.
Successful event centers have some things in common like being large enough to contain many people, visual appeal, great location, amenities, and proper management.
In a place like Lagos, richly designed and well-equipped event centers could bring in returns much faster for a real estate investor than shopping malls.
Industrial Buildings
Warehouses and manufacturing plants or factories are other property types to invest in. While factories are facilities where products are assembled or manufactured, warehouses are used for the distribution and storage of goods. With the increase in e-commerce business, logistics companies need warehouses where they can store their products and distribute from.
Hotels and Resorts
These are considered lucrative real estate investments, especially in very busy cities that are great destination locations for tourists like Lagos, Ibadan, Enugu, Abuja, and some cities in Nigeria. Hotels and resorts in high-traffic areas perform better than those located in places without enough traffic or busyness.
2. Vacation/Short-term Rental Properties
Investing in short-term rental properties is a lucrative venture and also not as financially intensive as industrial buildings. Short-term rental properties include short-let apartment rentals, Airbnb and home-sharing rentals, loft apartments, condominium rentals, studio apartment rentals and so on.
Short-let apartment rental
Short-let apartment rental has gained popularity in Nigeria in cities like Lagos and Abuja. These accommodations cater to vacationers, tourists, etc. lasting from a day to weeks.
Short-let apartments offer a better alternative to hotels. Occupants can lease a building for a period for various purposes as allowed by the property owner or manager.
In spite of management costs, short-let apartment rental may yield a more consistent and prompt return on investment for real estate investors.
Considering the growth of resorts and vacation projects in places like Lagos and Abuja, investing in short-let apartments could be a wise choice for property investment in these regions.
3. Mixed-Use Property
A mixed-use property development that combines, residential, commercial, and often industrial uses in one property. this approach maximizes space and enhances efficiency and convenience. It also fosters a dynamic environment where people can live, work and shop in the same location.
4. Raw Land
Buying Land
Irrespective of the property type you intend to invest in, buying raw land is essential to realizing your investment goals. Whether undeveloped or developed, owning a piece of raw land indirectly places you in a much better position than other real estate investors opting for different property categories.
What are the benefits of buying land?
Land as opposed to other real estate assets is vast. Here are some key benefits:
- Land Appreciates Much Quicker: Regardless of the season, land continues to appreciate in value. When buying land, the worth of the land is most times related to the level of infrastructural development in the location. It is advisable to look out for land in a promising and developing location, buy them if you have the funds, then hold onto them until the complete development of the area before selling them. Ibeju Lekki, in Lagos, serves as a good illustration of such a scenario. Those who bought land in Ibeju Lekki between 2000 and 2010 have seen their investments shoot up to more than 1000% in many cases.
- Land is a Great Source of Income: Land offers possibilities for utilization. Fortunately, there are ways you can leverage landed properties; you may opt to sell, lease out, rent out or even build on it.
Read also: Steps to Take Before Buying Land in Nigeria
Deciding to pursue any endeavour is likely to increase your earnings. The amount you earn hinges greatly on how you approach real estate. Addressing inflation is crucial, as rising prices diminish your buying power over time, but investing in land can shield your wealth from the effects of inflation as land values tend to appreciate, aligning with market trends when it’s time to sell.
Furthermore, the demand for land remains constant across sectors—from government entities to individuals—given that shelter is a fundamental human necessity. With global population growth persisting, the need for housing will always persist, making land a sought-after asset.
Also Read: 6 Types of Profitable Real Estate Investments to Explore
The higher the demand for housing, the more people seek properties.
Are you wondering which type of property to invest in today? Well, look no further—this list highlights the choices for investment properties in Nigeria today! While different options are discussed here, it looks like investing in hand has more potential.
Although investing in land offers benefits, it’s crucial to partner with real estate firms to maximize these advantages. This is where Teta Homes excels.
At Teta Homes we collaborate closely with our clients to help them secure land and other properties that align with their location preferences and financial plans. Get on the journey today with Teta Homes today and get a list of verified properties. For details feel free to reach out to us via WhatsApp. You can request your preferred property and let us know how we can come in to assist you.