If you’re just starting off in real estate investing in Lagos, Nigeria’s commercial city, there are chances you make mistakes. But a strategic investor will not make the same mistake twice.
The fact is you can’t become an expert overnight even if you made millions of Naira from your first buy or sell. It takes knowledge, determination, and skill to succeed when you’re investing in property.
In this post, I will share with you real estate investing mistakes you should avoid and what to do to avoid them.
Here is a look at 10 costly mistakes to avoid when investing in property in Lagos
- Putting Family Ahead Of Professionalism
- Failing To Perform Due Diligence
- Falling To Plan
- Emotional Sentiment
- Over Anxiety
- Not Checking Agent’s Credibility
- Failure To Learn About Local Market
- Overcome Greed
- Overlooking Tenants’ Needs
- Supplementary Cost
Putting Family Ahead Of Professionalism
A few days ago I shared on my LinkedIn profile how a man was dubbed by his own brother. The victim was working in Canada while he was sending money back home for his brother to buy land and supervise the construction of an apartment for his family.
Unfortunately, the brother (in Nigeria) diverted the funds to develop his personal property elsewhere in Lagos. That’s one of the horrible stories you are likely to hear from some Nigerians based abroad on issues concerning property.
There is nothing bad in carrying your brother or any of your relatives along when buying or developing a property in Lagos or any part of Nigeria. But trusting your family members to make an investment rather than a professionalism may lead to an unpalatable story.
You can’t know it all neither your brother or family member. Don’t place family sentiment over professionalism when investing in real estate in Lagos.
Failing To Perform Due Diligence
You shouldn’t believe that you know it all when investing in real estate in Lagos. If your transactions in the 1990s when you bought your first property in Lagos went well, things have changed.
Lagos is now a business hub centre for Nigerians, Africans, and hundreds of other prospective investor around the World.
Today, you JUST have to tap every possible resource and talk to experts to help you make the right purchase.
No one can deny the fact that there are some bad eggs in real estate business in Lagos and some parts of Nigeria.
But there are hundreds of savvy real estate agents, competent home inspectors, property lawyers whose source of livelihood is to carry out due diligence on a property for their clients.
Don’t fail to carry out due diligence on a property before putting your hard earned money on it. There are experts that would alert you of any flaws. For instance, property lawyer will be able to warn you of any defects in the title or documents
Due diligence is important so as to avoid making real estate mistakes in Lagos. Talk to genuine real estate consultants, agents and property lawyers.
It’s better to spend N200K on research than losing N20million on fraudulent property.
Falling To Plan
Lagos is expanding beyond anyone’s thought. So the last thing you want to do is buy a property and then decide afterward what you want to do with it. Before buying frenzy, map out your investment strategy.
For instance, if you’re buying a property around Ibeju-Lekki, one of the fastest developing business hub in Lagos, ask yourself what type of house you’re looking for: One-family or multi-family, vacation destination or not, industrial store or relaxation centre?
First, decide on your purchase plan, then look for properties that fit your plan.
Another first time real estate investment mistake people make in Lagos is by going into an investment due to emotional sentiments and biases.
For instance, you buy a property and built a warehouse in Arigbanla Street, Orile-Agege, or any other residence-dominated area instead of an industrial area.
If your focus is investing in real estate that will be bring in returns, it’s advisable to remove sentiment or buying a property in your village where you know the property will not appreciate in the coming years.
We know that finding the right property in Lagos can be time-consuming, but it worth it considering the huge amount you’d be investing.
It however becomes interesting when a prospective property investor finally finds a house or a completed building that meets their needs and wants, they are naturally anxious to make payment. A lot of people have lost millions of Naira due to anxiety when buying property in Lagos, Nigeria.
It’s very important to find out whether your dream property has a too-high price tag, start by searching what other similar homes in the area have sold for in recent months.
If you can’t do this yourself, consult real estate broker or a reliable property consultant who have access to a multiple listing real estate agent database.
Not Checking Agent’s Credibility
Another costly property investment mistake some investors make is by only doing Google search and choose any company that comes on top of Google search. Go beyond this, check social connections, verify the address of the agent if there is any on his website.
Most times, it’s even advisable to deal with an agent who has a website than dealing with agents you find on a general property listing website. If you must choose an agent on a general listing website, please do your due diligence.
Don’t deal with faceless property agent. A renowned real estate brand will procure all relevant legal permits and documents required for property sale.
Property agent or lawyer or broker in Lagos will guide you on how to procure the required land documents specified by the Lagos State government.
If you are buying a home or an apartment from a reputable brand, you can be assured of good title and legal titles.
Failure to Learn About Local Market
Learning about local market is very important. What is the value of the land and home values? Answers to this question will help you decide whether or not to buy a particular property that comes up for sale.
Are you investing in Lagos real estate because of high Return on Investment? This may not be guaranteed.
According to one of the powerful voices in real estate investing in Nigeria, Dr Stephen Akintayo in one of his coaching once said:
“Not investing for the long-term can make you give up when the ROIs are not forthcoming as expected.
Overlooking Tenants’ Needs
Are you investing in “To Let” property? Don’t make the mistake of not putting the needs of your potential tenants in your planning.
While families may be looking for low crime rates and good schools areas, bachelors may be looking for mass transit access and nearby nightlife.
If your planned purchase will be a vacation rental, how near is it to the beach or other local attractions?
If vacation is your target, investing in property around Ibeju-Lekki or Eleko would be a good plan. The bottom line is to match your investment to the kinds of tenants most likely to rent in that area.
Avoid the mistakes of simply looking at the real cost of a property when you’re buying one in Lagos. Most times, it comes with additional cost.
For instance, the price of a plot of land in the same location may differ because of the titles that come with each of them.
You may have to pay for other titles that come with Property A which sells for N1million while the cost may have be included in Property B that sells for N1.5million.
Don’t ever make the mistake of buying a property in Lagos without finding out the supplementary cost.
To succeed in your investments in Lagos, avoid these mistakes and your investment will bring you great ROI.
What BuyLandLagos (BLL) Can Do For You
You can talk to us at BLL to help you find a reliable property or go through our verified properties.
This will not only save you from fraudulent offers but will also ensure that your property is free of legal issues. We can find you a good property at a fair price deal.