One question I get frequently is, “Should I buy a rental property” or …

Of course, people try to weigh their investment options to choose the best alternative. They want to know if they should buy a rental property, a commercial property, a leasehold property, or divest the money into stocks or mutual funds.

Rental properties have associated costs like maintenance, property insurance, and taxes to factor into the computation of potential rental income.

These costs are, however, insignificant compared to the expected potential rental income. The idea is to focus on constant maintenance instead of piled-up high-cost maintenance. Set aside 1% of the property value for annual maintenance and ensure you maintain the property frequently.

Is Buying Rental Property a Good Investment?

Buying rental properties is a good investment. Like every other real estate, its value appreciates over time. And because it is a physical asset, it easily hedges over inflation – thereby protecting investors’ wealth from being eroded by the general drop in value caused by inflation.

It is worth noting that rental property investors earn rental income passively and steadily, freeing up time for them to go about their other jobs or business activities.

Finally, rental property is a trans-generational wealth investors pass on to the next generation.

Is It a Good Time to Buy Rental Property in Nigeria?

With a population growth of 229,152,217, at a growth rate of 2.39%, it is certain that now is a good time to buy rental property in Nigeria.

Will this increased population live in a vacuum? Obviously, no! They definitely will need a place to lay their heads and have a taste of life.

Research shows that 58.8% of Nigerians live in slums. The Vice President of Nigeria, Kashim Shettima acknowledges that the country needs a minimum of #21 trillion (naira) to bridge its housing deficit.

This is a demand gap that investors can exploit to earn and grow their rental income and property value to a new potential all-time high.

Thus, buying a rental property now puts an investor at an edge at this time of need and housing struggles that bedevil Nigeria.

How to Buy a Rental Property in Nigeria

There are 4 steps to buying any property in Nigeria. They are:

  1. Get a reputable real estate agent or house listing platform to source your choice of apartment.
  2. Conduct the property title search to confirm its authenticity.
  3. Execute the transaction and sign the documents transferring the property ownership to you (receipts, Deed of Assignment, and /or survey plan).
  4. Perfect your title by getting your governor’s Consent and registering the title at the land registry with the property jurisdiction.

Best Cities to Buy a Rental Property in Nigeria

Your choice of place to buy a rental property should depend on locations with low crime rates, higher influx of people, growing job opportunities, relatively stable power supply, increased infrastructure/amenities, and easy access to transportation.

Based on this discovery, it is appropriate to conclude that some of the best places to buy a rental property in Nigeria include Lagos state, Abuja, Kaduna, Kanu, Port Harcourt, Jos, etc.

For a client who chooses to invest in Lagos state, Lekki-Epe, Ibeju Lekki, and Ikorodu are some of the best places to put into consideration.

How to Buy a Rental Property with Little Money Down in Nigeria

The only way to buy a rental property with little money down in Nigeria is by financing it with a mortgage or a payment plan. Nigeria is a cash economy. We buy most things in cash. Unlike the West, where the bulk of their transactions is on credit.

We also have very little to no housing policy that guarantees seamless, no-cash, or very little-money real estate deals in Nigeria.

It is casually referred to as, “Money for hand, back for ground.”

Buying a Vacation Rental Property

There are several sub-niches in real estate. Vacation rental is one of them. Vacation rental property investors target customers/clients who want a shortlet apartment to spend a few days in. It can sometimes be a direct replica of Airbnb. Some investors even use the Airbnb platform itself.

Investors who want to target tourists site their property close to tourist attractions like Epe, Badagry, Ibeju Lekki, Obudu, etc.

However, you can site short-lets anywhere because clients need them for different purposes.

Conclusion

Although acquiring and managing rental properties consume time and incur costs, its benefits are worth it. When you choose the right location, you will, not only earn constant passive income but also, enjoy property value appreciation.

It’s even amazing that you can pass down your rental property through your kids to your yet-unborn generation. It is one of the very few wealth-creation assets that hedge you against the aggressive bites of inflation.

We can help you get one if you want. Contact us on +2348037843617, [email protected]