THE BENEFITS OF INVESTING IN REAL ESTATE: A SMART FINANCIAL MOVE 

The esteemed billionaire, Andrew Carnegie, once famously remarked, “Ninety percent of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined. The wise young man or wage earner of today invests his money in real estate.” – Andrew Carnegie, billionaire industrialist.

Real estate comprises properties, lands, or buildings that hold intrinsic value, and real estate investment has long been acknowledged as a powerful wealth-building strategy. Despite this recognition, real estate investment is often overlooked, especially in regions like ours where land issues abound. The apprehension surrounding real estate investment is palpable, leading us to ask: How exactly should one invest their wealth?

Numerous experts have expounded on various investment options, from transportation and stocks to bonds, agriculture, and even technology. While we do not discredit these options, today, we aim to guide you on a journey towards building transgenerational wealth. Here are seven reasons why you should consider investing in real estate: 

1. Real Estate is a Physical Asset:

   Real estate represents an asset that offers tangible control. Unlike digital asset investments such as stocks and bonds, or assets like transportation, which depreciate in value due to high maintenance costs, real estate appreciates in value over time.

Land, being a natural resource, is inherently competitive, making real estate a tangible property that generates steady income. While investing in real estate is accessible to all, it is not suited for everyone.

2. Real Estate has a Growing Demand:

   Nigeria’s population, as of 2023, stood at 226.2 million, with a 2.4% annual increase rate. As Nigeria continues to experience population growth, the demand for residential and commercial spaces escalates, creating an ever-expanding market for real estate investors.

Regardless of the type of real estate investment – whether in rental properties, hostels, short-let apartments, or hotels – the demand remains high, providing investors with a stable income source.

3. Real Estate Makes a Real Impact on Economic Growth:

   The Nigerian economy has demonstrated resilience and consistent growth, propelled by diverse sectors such as oil and gas, agriculture, and services. This economic vitality contributes to urbanization, with people flocking from rural to urban areas in search of better opportunities.

Cities like Lagos, Abuja, and Port Harcourt are witnessing rapid urban development, driving increased demand for real estate. Investing in strategically located properties, such as Estellar in Yaba, enables investors to ride the wave of economic growth.

4. Government Involvement in Real Estate:

   Past investors have harbored fears about issues with local landowners (“Omo Onile”). Concerns about purchasing land previously owned by others have also been rife. However, the government has acknowledged these issues and is now directly involved in real estate.

Legislation, such as the Land Use Act in Lagos, has been enacted to prevent property theft and scams. Various programmes, such as the National Housing Programme, aim to improve land titling and registration processes, thereby creating a more conducive investment environment.

5. Real Estate Helps Diversify Your Portfolio:

   Real estate offers diversification benefits for investors seeking to balance their portfolios. Unlike stocks or bonds, real estate investments often exhibit a low correlation with other asset classes, providing a hedge against market volatility and reducing overall portfolio risk. Furthermore, real estate presents an opportunity for investors with diverse risk appetites to invest, as it encompasses residential, commercial, and industrial sectors, allowing investors to tailor their portfolios to match their risk tolerance and goals.

6.  Real Estate Provides a Lifetime of Income:

   The rental market has historically provided attractive yields for investors. As demand for rental properties continues to rise, particularly in urban centres, the potential for favourable rental yields remains high. For instance, investing in a highly student-populated area like Yaba ensures a steady stream of rental income, as students will consistently seek accommodation. Strategic investments in areas poised for growth can lead to substantial appreciation, offering investors both wealth preservation and capital appreciation.

The popular game Monopoly recently offered three simple tips for becoming rich:

– Build up properties

– Charge rent

– Stay out of “Monopoly” jail

While Monopoly is a game, it undeniably imparts a vital lesson: Investing in real estate is not only a smart financial move but also a strategic step towards unlocking long-term prosperity.

Whether you are a seasoned investor or exploring real estate for the first time, the  real estate market presents a compelling case for those seeking financial growth and stability.

Will you invest in real estate today? If you need assistance or guidance on real estate matters, do not hesitate to reach out to us!