Nigeria is experiencing a huge entrepreneurial and economic revolution. New and future forward businesses are springing up by the numbers daily. In most of Nigeria’s urban cities therefore; this directly translates to a rise in demand for commercial real estate.
If you have ever thought of going into commercial real estate development or investment, there has never been a better time than now.
However, as with all real estate investments; while the rewards may be great, the risks are also very high. To help mitigate the risks as much as possible, you need to do your homework by doing extensive research and hiring professionals where needed to ensure you’re making the right decisions for you.
Here are some of our tips to get you started on this journey.
- Ensure the property is in a very good location. No matter how many times we say this, it will never be enough. Location is key to the value of any property especially for commercial properties.
- Ensure you know the governmental laws and developmental plans concerning the area. So many people have fallen victim of this: bought premium lands with high expectations only to find out later that they cannot build such structures there due to one regulation or the other. Please, have all the facts before putting your money where your mouth is.
- Calculate your expected cash flow/profit based on FACTS AND METRICS. It’s very easy to begin building castles in the air and calculating the millions you could rake in by investing in the property. However, if you do not do due diligence, you could end up in the poor house by making a bad investment. Ask questions; what do other buildings around also charge? What’s the tenancy/occupancy rate for similar buildings in the area? How much will maintenance cost? Cover all angles before jumping into the waters
- Use professionals: There’s a simple saying “Penny wise…Pound foolish”. This aptly describes the situation many investors/developers find themselves after trying to cut costs. While ensuring that you make judicious use of money as much as possible, please use professionals where necessary. If you do not, and you end up making wrong choices, you could find yourself spending more money at the end of the day.