Imagine making a huge profit from a business you have been looking out for overtime. As a rational investor who has so many choices, but considers some more preferential to others, you have your eyes on so many business opportunities. You want to expand the scope and capacity of your existing business and you still want other streams of income. When too many thoughts like this inundates the mind, the mind puzzles over and over, suggesting too many details and you might end up spending your hard-earned income on a wrong investment.

In this article, I will analyze land buying as one of the best investment opportunities that warrant high return on investment (ROI) even when there is economic instability. It is a conventional statement that so many assets values depreciate with time, but asset like land is one of the only assets that stay exceptional. Land as an investment vehicle rise in value along with time, which makes it one of the highest profit-making investment tools that guarantee returns. Contrary to many people opinion, land has only been seen as a significant factor of human needs hierarchy for shelter making, but it really goes beyond just human shelter actualization, it is also perceived as a means to generate income, most especially when you invest in variety of land at different locations. Land flipping for instance is a great business anyone can leverage on without so much professionalism. As a matter of fact, it remains one of the most forgiving assets even when you don’t get it right from the onset, this implies that perhaps when you buy the right land at a wrong location, provided as an investor, you can exhibit the required patience, odds are high that you will still make profit in the long run.

PROPERTY PORTFOLIO:

Property portfolio is an economical lingo that explains how individuals, groups, and companies generate wealth by investing in a collection of properties. Property portfolio as opposed to other investment portfolios like equity, treasury bill, bond, and time deposit, it is ascribed to lesser risk when you have your property purchased rightly and well documented. A collection of properties gives you the opportunity to determine and properly analyze the development of different areas at a given period of time. In light of this, you can consider which one to sell and which one to retain. Investors of properties have revealed that there is possibility of property giving profit up to 500% interest of its principal in less than 5 years. This however is regulated by the pace of development in the property location. An empirical example to this is Ibeju-Lekki as a Lagos environment which started attaining its prominence as a Lagos developing locality in March 2014 and the cost of buying land at Ibeju-Lekki was just between ₦200,000 and ₦500,000 depending on location and topography, but as of today September 2020 it’s between ₦1,000,000 and ₦5,000,000. This simply implies that investors who bought land as of 2014 could make between ₦800,000 and ₦3,000,000 which is up to 500% profit or more.

Buying a single property is not enough to consider as building property Portfolio, but you can start small using one property to kickstart. While waiting for your property to appreciate around your anticipated value, you need to focus on security as land-grabbing kingpins (Omo-Onile) are around everywhere in Lagos. But no too worries, all you need to do is ensuring you acquire the right documents such as family receipt and deed of conveyance pertaining to your land and ensure it is registered with the Surveyor General for likely future eventualities. The Lagos State Legislature and judiciary have got all genuine landowners covered with a well-codified ordinance that caters to the interest of Lagos residents.

SECURING YOUR PROPERTY:

Keeping close eyes in a distant property can really be challenging and worrisome. But I have got you easy means to secure your properties while you are far to your land. Since your aim is to keep the property unutilized for a while. One of the best ways to secure such property is to have it fenced and gated. when you fence and gate your property, you have restricted people’s access to such property. Some have also considered laying a three couch foundation on the land instead of fencing, you can also consider both.

You may also look into leasing such property for farming use or even giving it out for free temporary usage, automatically, they serve as your correspondent on the property, calling you if they see any strange attempt by kingpins. Using residents of the locality also helps you to quickly get informed when things are about to go wrong on your site. All you need to do is get yourself acquainted with some few residents and exchange contacts with them, call them at intervals and send them free items like recharge cards, and they will be the first to call you on any malpractice attempt. An investor may also decide to temporarily give it out for recreational activities to the youth such as football field, gym, or children playing ground, this is common in Lagos.

PROPERTY AT MATURITY:

Most investments have their maximum maturity in terms of investment tenure and return, but unlike land which its investment time and interest are based on going concern. The only factor that determines the timing and returns on the property is the investor’s benchmark. Every investor has their set time and returns to be considered as maturity. But land maturity as a phenomenon brings further the opinion of the “next line of actions” chosen by investors which we have to consider in their multi-faceted. The next line of action is different choices made by investors when land matures for transformation and monetization purposes. Since the primary reason for land purchase is not for nothing but for profit-maximizing, as an investor, you need to consider one or more of these transformations and monetization options below.

SALES OF LAND (LAND FLIPPING):

One of the major reasons for property acquisition is for buy-to-sell purposes, an average rational investor resells a long acquired property for profit margins. With this means, he can either re-invest the profit further on property(s) or diverting it into other lucrative business(es) in the hope for further gains. Sales of properties have turned around so many investors overnight through an astronomical increase in property price and quick development of property area.

RENT/LEASE OF PROPERTY:

Another way to keep making profits on your land is to rent or lease it for profit while still growing in value. A landowner might still don’t have the choice or capability of developing his land. But when such property has gained considerable development. He may choose to have it rented or leased to an individual or a business venture to earn profit. Land rent and lease are common among companies that have a short term goal staying in a business area. For instance, a poultry farm owner understands that the development of a town or village is inverse to its own business objective. In such clime, he might consider leasing his place of work rather than buying, since his stay there will be temporary and will be influenced to leave as the development of the area increases.

PROPERTY DEVELOPMENT:

Investors are sometimes overwhelmed with the choice of developing properties if the property development rose around or past its expectation, this however depends on the capability of the investor to develop the land for broader income. Depending on the location, the land can be used to construct a residential building, commercial building, or even mixed-use. An investor may consider making his building a serviced building where some basic amenities such as furniture and electronics are readily provided, facility cleaning, and waste disposal are catered for. He may also choose to have the property unserviced, where tenants make available their own furniture and electronic gadgets. House of multiple occupants (HMO) which is also referred to as tenement house and student studios are also the best to consider in some locality. For instance a landlord would prefer to build student studios in an environment with higher-institution, and also decide to build tenement house in an environment of the mediocre. Knowing the facility that well suits a locality is determined by the tenant profile of such environment, every environment has building facility that is well-sellable, giving proper consideration to that will save you from vacant periods.

Some investors prefer living in the property to landlord the activities of the building, or decide to stay out the building and assign property to facility managers to handle it with professionalism. Rent of both commercial and residential properties is usually on annual basis, while some prefer bi-annual or biennial basis. Some investors also chose short or long term lease of their facilities starting from 3 years to 99 years.

JOINT VENTURE (JV):

Joint venture is gaining more popularity in the elites area of Lagos State like Surulere, Ikeja, Magodo, and on the Island. In joint venture deals, an investor or landowner collaborates with a developer to have his land developed for either sharing profit with parity or differentials. They either sell the property at completion or render it for rent/lease depending on the contractual agreement between them. One of the popular joint ventures in developing areas of Lagos is also becoming looming but seems different. In this case, developers build on landowner’s land to construct shops, stalls, malls, and perhaps a few residential spaces. What set this unique to the popular JV is that landowner might not be entitled to property and profit until certain years agreed in the contract. In this case, the developer has the temporary ownership of the property between 10 and 30 years or more, but at the expiration of the time usage of the property, the landowner becomes the true owner recouping his property.

WORK STATION (WS):

Work Station as a facility has given steady (daily or weekly) income to its owners in Lagos state. Due to the continuous rise in office cost of rents. WS is common in elites area of Lagos State where rent is extremely on the high side. Workstation allows professionals of different scope of work to use the same corporate halls together with one desk to person, coupled with common reception. Since some people want their business to be spotted in this areas, but don’t have the financial stand to rent personal office, they have made workstation their options. Workstation owners are responsible for the furniture, electricity running and some times internet broadband, all tenants of workstation comes with is their laptops and perhaps printers. An average workstation in Lekki charges between ₦5,000 to ₦15,000 per day, depending on the standard.

VACATION RENTAL APARTMENTS:

Rental Apartments is extremely lucrative business for property owners. Demand for rental apartments keep increasing as a result of high influx of travelers, expatriates working in Nigeria on short contracts, and inbound vacations. The number one vacation rental marketplace in the world is airbnb.com with millions of rental properties listed globally. Rental apartment like it hotel counterpart is always serviced, but allows you to save cost and do more than hotel. For instance, people spend more in hotel for feeding and laundry, but a rental apartment allows you to bring your food and cook, buy drinks from the grocery stores to refrigerate, and also do your laundry yourself. And also considering the size and cost of rental apartments to hotel rooms or suites. A rental apartment can be set up in any urban locality of Lagos and still be found by tenants if listed online, but rental apartments sell better in the developed area of Lagos and other Nigerian states vis-a-vis the developing ones. People have their different destinations and preferences.

WRITER’S NOTE:

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