Real estate is one of the steady investment alternatives in Nigeria, and owning land or property in Lagos right now is a viable and wise investment.
It is interesting to note that Lagos state is the most populous state in Nigeria. One of the primary reasons for this is the economic viability. Because of this, millions of Nigerians move there for business and other purposes.
Despite the fact that the Nigerian economy experienced recession in the third quarter of 2020, amidst the coronavirus, several industries, including real estate, suffered greatly.
Reports from Lagos, however, showed that real estate developers continued to develop new properties during the pandemic due to the high demand for residential housing units.
While there are numerous reasons why you should consider buying real estate, let’s take a quick look at some reasons why investing in real estate in 2022 is a great idea.
Vibrant economy
The vibrant economy of Lagos has led to a growing middle-class population with enough cash to spend on luxuries and decent accommodation. As a result, the housing market segment remains robust despite the downturns experienced by every other sector of the Nigerian economy.
Taking an area like Lekki into consideration, prices of lands and houses there grew an average of 2.8 percent when other segments of the real estate sector declined countrywide.
The city is speedily becoming a hub for real estate investment due to the presence of readily available buyers.
The population is ever-growing
In the real estate sector, population is a very significant determinant of growth. In the whole of Nigeria, Lagos state has the smallest landmass but is ironically the most populous state in the country. That’s a great concentration of residential and coperate establishments in the smallest state.
Lagos has grown from a population of 7.2 million residents in 2000 to about 15 million as of today. With a population density of about 5000persons/Sq. Km, Lagos is one of the most densely populated cities in Africa. It has also been estimated that 86 people migrate to Lagos every hour, 2000 people every day, and close to a million people every year.
With emphasis on housing, there is a constant flow of fresh and enthusiastic citizens looking for accommodation.
Lagos is the economic and industrial hub of Nigeria
Abuja may have replaced Lagos as the administrative capital of Nigeria, but Lagos is still the commercial capital of Nigeria. When it comes to business, Lagos is undefeated.
About 80% of all Nigerian imports go through Lagos ports, which consume more than half of the country’s energy. In addition, Lagos accounts for over 90% of Nigeria’s foreign trade.
Undeniably, Lagos is a literal powerhouse and is home to some of the most ambitious people in Africa. Even market research shows that Lagos State has the highest property values and the most successful real estate market in Nigeria.
Strong rental market
Currently, majority of Lagosians rent more than they buy properties. This is very evident in the supply-demand gap which is due to the number of people that want to rent every now and then. People also prefer to rent due to the cost of homeownership, high costs of land, and staggering costs of building construction, and developers are aware of this direction the industry is headed.
Approximately 75% of landowners already have plans to develop rental properties due to their ability to return on their investments quickly and an ample supply of the populace available to rent the very second construction is complete.
Property prices keep rising
The rate at which prices of houses, lands, and buildings increase in Lagos make it the strongest reason why Lagos is an excellent location for real estate investments. The return on investments is massive.
The Lagos State Market Analysis shows Lagos as having some of Nigeria’s most significant estate prices. A plot of land acquired for 5 million in Lekki in 2006 could go for an average of 65 million now.
Now that we’ve established why you need to buy real estate in Lagos, there are some things you need to tick off before starting.
Before buying land in Lagos or investing in real estate, you need to know some basic things, and it is only wise to consider location when investing in real estate.
This is because when it comes to real estate investment, location has a lot to do with your return on investment.
You’re probably a first-time real estate investor or you’ve been investing before. While considering location before buying land and properties, you should consider price appreciation of the property.
Some lucrative areas in Lagos that guarantee you a high return on investment are:
1. Magodo: This is an excellent place to buy real estate because of its proximity to developed cities like Ikeja and developed areas. Therefore, properties in this axis will appreciate fast and high as well.
2. Lekki: is very popular today because of its rapid development and high appreciating rate of landed properties in the area. Lekki phase 1 used to be an excellent place to invest for a high return on investment but no more because it has reached its peak for now. It can only appreciate to about 2% in a year. Other areas in Lekki are of focus now.
3. Sangotedo: situated just after Ajah, Sangotedo has seen considerable investment in the recent times. As a result, there has been a commercial and real estate boom, which has created a very high return on investment for wise investors. For example, a plot of land in Westwood par estate Sangotedo sold for N8.4m in 2017 and 2 years after trading for N17.5m a scheme.
4. Ibeju Lekki: This part of Lagos is termed the new Lagos because of Nigeria’s next real estate investment hub. If you want to invest in real estate for a significant return on investment in Nigeria, buy land in Ibeju Lekki Lagos.
5. Badagry: The historical city of Badagry would soon become a new haven for developers and investors because of the availability of lands, the deep seaport and the discovery of crude oil in the area. Going by the publicity given to Lagos-Badagry Expressway and the monorail transport, the area will record more boom, as we have never seen before.
Director of Echostone Development Nigeria, Mr. Sammy Adigun, believes, “When you talked of Lekki 20 years ago, that is what Badagry is today; Badagry is just ten years away. Badagry will be an important economic hub in the next ten years, and real estate will boom. With the city just joining the oil-producing communities, properties and land rental value will increase when people come and are looking for accommodation.
6. Epe: there is a huge potential in the Epe axis of Lagos State. As developments criss-cross through Ibeju Lekki, you will find out that Epe Local Government will be the next bus stop as people will be rushing to that part for cheaper and affordable accommodation.
According to real estate experts, the average minimum price per plot in the Epe -Ibeju Lekki axis has been predicted to sell for an estimated N5 000,000 per plot in the next five years.
The Lagos state government and private sectors will benefit from relentless efforts to develop Epe. Some of the ongoing massive projects that Epe investors will benefit from include; Lekki-Epe International Airport, Dangote Refinery and Petrochemical Company, Epe resort and spa, Lagos, and Dubai SmartCity project.
There are various essential documents to ask for when buying a house or land in Lagos. Some of these documents are used to verify the title of the seller of the property. Also, to avoid unnecessary disputes, you must ensure that the seller has the legal right to transfer ownership of that property to you.
Some of these documents you need to get include;
1. Receipt of land or building purchase: Everyone goes out to purchase different items and demands receipts. When purchasing a land or a house, the rules are similar. Once you have verified the authenticity of the land and other property documents listed below, you must demand payment in writing, i.e., the receipt.
If you make payment without collecting the receipt, it becomes near impossible to trace again. The best means of payment are through cheques addressed to the company or through online transfers. By doing this, you can be sure that your income and the beneficiary can be easily tracked if there are any issues shortly.
If you are buying from a family, you need to ensure you go directly to the family lawyer who will issue you a receipt (family receipt), a verified excision document with an accompanying gazette where the Government published the land as being excised to the family. Additionally, a registered survey and a layout plan will have to be requested if they are available.
2. An approved survey plan: This is another important document you need to get after buying land or property. It is a requirement that a certified surveyor must survey every land and that a survey plan be submitted to the Government for approval.
Upon approval of the document, a survey number accompanies the survey plan, which is the survey plan number. It is a unique number and can verify if the land is under any government acquired or committed area. If you have purchased a larger parcel of land, you will need to request a layout plan to know where the land within the more significant estate is located.
At times you may also want to see the development plan of the estate, to help you classify the buildings in the estate. Some estates do not permit the mixing of different building patterns. Therefore, it is always wise to ask how the plan will affect your intended use and program.
3. Excision document: This type of document is particularly useful when a Certificate of Occupancy (C of O) is not available. You need to be sure the land is not a government acquisition or on the government’s plan for future use. Excision properly gazetted and verified by the Ministry of Land will make for a suitable land document.
When you buy land from a family with Excision, you will fill out form 1c, which you will submit to the Government to prove that the land has been sold to you by the family.
4. Deed of assignment: This is a signed agreement between you and the seller of the land or building, signed and stamped by a notary public that a particular plot or plot of land has been given to you. The document will be signed by the property seller, the property buyer, and a notary public.
Also, a deed of assignment must include a certified layout plan and the survey plan for your plot. Also included in the contract is the plot number assigned to you and the coordinates for the main boundaries of the property. In addition to the above, other critical information to be included are the plot’s size, cost, a seal of the company, the signatures of witnesses, and properly initialed pages.
5. Certificate of Occupancy: This is the certificate issued by the Government to the first occupant of land. When land has a certificate of occupancy, it is an excellent land to purchase but make sure you verify the authenticity of such document from the Government. When an original owner has sold a property to another party, the land should have a governor’s consent.
The transfer of purchased land to another party from the original owner is incomplete without the Governor’s support. It is the only authorizing document notifying you of the Government’s approval of the transfer of such land property.
The advantage of obtaining the Governor’s consent whenever buying land in Lagos is that The Government will protect your investment from from being taken over by another person.
However, you must also register your Governor’s consent with the bureau of lands, which will attach a number to the document for easy tracking. I know the process can be overwhelming, but it is in your best interest to take the necessary steps to protect your property.
You might not be able to buy a land or a house now. The good thing is that you can invest in real estate without acquiring a land or a building. You can do this by: investing in real estate mutual funds, in a real estate-focused company, in home construction, among other options.
Contact real estate companies to ask for investment options. A few years down the line, you’ll be glad you did, because, well humans still live in houses.
With real estate, you can never go wrong.
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