The growing trend in the Nigerian real estate sector has made it imperative for Nigeria to take a closer look on how to explore the full potentials of this sector, to influence the general growth of our nation’s economy. This includes learning how to maximize earnings from real estate as a whole.
Whether you’re curious about the investment potential of real estate or looking for a new way to generate wealth, it is worth learning how wealth is created through real estate.
There are some basic ways money is made through real estate. They are:
This is the most common source of real estate profit. It refers to the increase in the value of the property in question and is achieved in different ways for different types of real estate. Most importantly, it is only realized through selling or refinancing.
Generally referred to as rent, income from real estate can come in the following forms.
The most obvious source of appreciation for undeveloped land is in developing it. As cities develop, land outside the limits become more valuable. This is because of the potential for it to be purchased by developers. These developers then build houses that raise that value even further.
Appreciation in land can also come from the discoveries of valuable minerals or materials, provided that the buyer holds the rights. An extreme example of this would be striking oil, but appreciation can also come from gravel deposits, trees and so on.
When looking at residential properties, location is often the biggest factor. This is because the value of a property is vastly dependent on the neighborhood in which that property is situated. The downside, however, is that this trend can also work in reverse, with home values falling as a neighborhood decays.
Home improvements can also spur appreciation, and this is something a property owner can directly control. Remodeling the house to reflect latest trends can increase the value of that property.
Commercial property gains value for the following reasons:
- Development and
Inflation is a general increase in prices and fall in the purchasing value of money. What this means is that a 10% inflation of the Naira means that your Naira can only buy about 90% of the same good the following year, and that includes property.
In essence, inflation alone can cause appreciation in real estate, but it is a bit of a Pyrrhic victory, since even though you may get five or ten times the money you have invested due to inflation, many other goods cost five or ten times more as well.
Real Estate Unite 2016
If the above article has been helpful to you, then Real Estate Unite is a place for you. Why?
Real Estate Unite is the LARGEST real estate summit in Nigeria and one of the MOST ANTICIPATED in Africa as a whole. Recording over 5000 footfalls consisting of key players in the real estate industry, this summit seeks to educate as well as proffer solutions to challenges in the real estate sector.
Participating in this event guarantees you the following:
- Access to the most active real estate stakeholders in Africa
- Network with major industry players; meet institutional investor, foreign investors, and leading developers
- Showcase and dispose of ongoing or developed projects
- Learn from thought leaders and panelist
- Re-enforce your brand and retain competitive edge
- Learn global practices
- Capitalize on technologies, innovations, and trends that will drive future markets
To register for this event click here