Real estate is booming in Nigeria and aside from a large number of locals, visitors and foreigners are starting to invest in the sector in
a rental property.
Of course, becoming a landlord in Nigeria at the
moment would be a smart move; however, it is important to understand
what the commitment entails.
While
it may sound like an easy way to make money, becoming a landlord is
certainly not something you should do with your eyes closed. It requires a lot of research and consideration, as it can be a costly undertaking that requires a lot of time.
Financial resources
Buying
or building a house for rent out to tenants is not an easy task,
especially in Nigeria where the bureaucracy can be a huge bottleneck. It
is important that you have enough capital as well as opportunities to
raise extra funds in the case of emergency before you delve into it. As
from the cost or raw materials, the possible cost of paying contractors
and workers legal fees, as well as administrative charges (costs related to interviewing potential tenants, running their credit histories and checking references),
there are a lot of hidden costs to tackle. In addition to personal
savings, you could consider taking a loan from the bank or seeking out
investors. Bottom line; evaluate your finances and ensure you have
enough financial resources necessary to complete the project.
Target Tenants
Before
you decide to become a landlord; you need to decide on the sort of
tenants you are aiming for. Are you looking for the upper class, middle
class or are you looking to build something for those on a low budget?
The type of tenants you are aiming for will help you know the kind of
property you will be building in the first place, and it will help you
know the kind of marketing plan you may need to adopt. For instance, if
your target tenants are dignitaries and people of high class, the rental
property has to locate in a high-brow area and must be built and
decorated with high-end equipment, so they can attract quality tenants.
State and local laws
Nigeria
is a large country and while there are national laws, certain parts of
the country have their specific state and local laws which either
directly or remotely affects real estate as they regulate tenants’ and
landlords’ rights and responsibilities and dictate the things that must
be covered in your rental agreement. Ensure you know every important
detail listed in the local and state laws and guidelines. Some areas
require that you pay special fees or taxes for building rental
properties. Thanks to technology, you can get all the information you
need online.
Property management
Before
you even start the process of building or buying a rental property, you
need to first decide on how the property will be managed. The property
will require repairs/maintenance at intervals, the tenants will require a
point of call and a system will have to be in place for rent
collection. You can either decide to manage the property on your own (if
you are certain you have time to dedicate to the role) or you could
consider using an agent or hiring a property management company to
manage it for you. If you chose any of the latter, ensure you put them
on a contract and ensure you peruse the term of the contract carefully
Insurance
The importance of buying insurance for your property cannot be
overstated.From buildings and contents cover to liability insurance, loss of rent protection, and even home emergency cover, it essential that you protect yourself and your property with this insurance
The importance of buying insurance for your property cannot be
overstated.From buildings and contents cover to liability insurance, loss of rent protection, and even home emergency cover, it essential that you protect yourself and your property with this insurance
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