The first thing that comes to the mind of any person whether Nigerian or foreigner who wants to invest in real estate in Nigeria is the location of the land or house. Location is the first thing to think about because a good location for a good purpose is what makes a good property. When you make a wrong choice of location it affects every use to which the property is put. A good choice of location guarantees a greater profit on the investment in that property.
Your choice of location is determined by so many factors which include:
1: Amount of money available for you.
2: The purpose for which you want to buy or acquire the property.
3: Environmental situation of the location.
4: Security considerations.
5: Proximity/Accessibility to major concerns in the city.
6: Government regulations and interests in the area.
7: Infrastructural development of the area.
We now discuss these issues one after the other:
The amount of money available to you is the number one determining factor in venturing into real estate business. When you have good money, You consider more viable and developed or developing areas. When you have small amounts to start, it is always better to look at prospective developing areas.
For instance, a plot of land somewhere in a remote area of Ajah in Lagos State will appreciate more in value in ten years more than a plot of land of same value today in Okigwe in Imo State of Nigeria.
The purpose for which you want to buy or acquire the property is the next factor that will determine your location. If you want to acquire land or a house for residential purposes, you try as much as possible to do so within or around your area of work or business. A lot of people do not think of this, they just go on and procure a potion of land for their residential building without looking at the structure of their life in the next ten or fifteen year.
Always consider your work, your business, your children’s school etc before making a choice of location. Also when you are purchasing/acquiring a piece of land or building for investment purposes, study the rental value of the area and speak to estate valuers to give you a projection in value of the area in years to come. The same is applicable to business concerns.
When you are acquiring a land or house for business, think about your intending customers and those who are doing complementary businesses to your own business. You will also look at other businesses in same area to see how they can affect your business positively or negatively.
Environmental situations of the location is of paramount importance. Examining the environment in which the property is located will reveal weather there are hazards like erosion menace, noise and air pollution, movement of heavy equipment, big factories or circumstances that could constitute nuisance , presence of dangerous animals and toxic material etc.
This is important especially here in Nigeria where town planning laws are not strictly followed or fragrantly violated as evidenced in several factories found in residential areas in Lagos and other major cities in Nigeria . Nobody likes a dangerous environment.You need to consider the environment where the land is located and know how it is currently affecting the people living there presently and in the future in order to guaranty your safety while living or doing business there.
Security concerns is another very important consideration in choosing your location. You need to know how secure the area you are planning to buy your property is.
Check to see if government has provided adequate security for that area and also check to see if the community itself has a way of tackling security challenges. An area with good security attracts a high population which benefits properties in the area.
Properties in a well secure area are bound to attract better value in terms sales , lease or renting as no one wants to be in any environment where his/her life and properties are not secure.
Proximity/Accessibility to major concerns in the city. In choosing a location for investment in real estate, it is very important to check how accessible the location is to the public and major public concerns like schools (private/public) hotels, malls, hospitals (private/public), airports, recreation centers, banks, churches and mosques, stadium, embassies/consulates for foreigners, post offices etc.
You have to check if it is open to a network of roads. In this way, people living there will have no problem moving in out of the area. Good road network in an area also increases the chances of development in the area, thereby increasing the value of the property. Most businesses fail as a result of bad location therefore proximity to these concerns should influence your choice of location for your property.
Government regulations and interests in the area. This is one area that is very important in making a choice of your location in investing in real estate. It has become a common occurrence that houses built by persons are occasionally demolished by the state or local government authorities as a result of non compliance with the laws.
When you want to purchase or acquire a land or house, get professionals to assist you check and find out what the Government of your state or local government has marked that place for.
So many people, individuals and companies alike have fallen victims of acquiring properties in an area which has been marked as government acquisition. In Lagos state of Nigeria, an application to the Surveyor General’s office in Alausa Ikeja will reveal to you if there is any government interest in the area.
Also of importance is the fact that persons purchasing already developed properties should also check to ensure that the developers of the property have the title to the land and has complied with the relevant laws.
Infrastructural development of the area is also very important when considering the location of your property depending on the purpose of the investment. It is common knowledge that good infrastructural development increases the value of the property in terms of rent, lease and sales.
It is however important to note that with proper information on infrastructural developments coming to an area either buy the government, agencies, individuals and companies could also guide you on investment in those areas. For instance the proposed Lekki Free trade zone, Dangote refinery, deep sea port, hospitals, stadium etc that are coming up in the Eti Osa /Ekpe axis of lagos State.
These are information which could guide a prospective investor in real estate to move to these areas to acquire properties now with the hope of speedy appreciation of these investments in future.
Taxation of properties is also another consideration for the choice of location. There are several taxes and levies that are associated with properties and it varies from state to state, local government to local government. These taxes and levies include but not limited to Property Tax, Stamp duty, Tenement rate (land use charge in Lagos State ) etc.
Recently the Lagos state government increased the land use charge for properties in Lagos state which attracted a public outcry and demonstrations led by the Nigerian Bar Association. The local government authorities indiscriminately introduce taxes and levis and this is one major concern in real estate business. Every investor in this area must take a close study of the taxes and levies associated with properties in the area he/she intends to locate the property.
These and more are major factors which can determine the location of your property when you want to venture into real estate. We are here to guide you.