How I Help Nigerians Abroad Invest Safely And Get High ROI From Land Banking
- Posted by Karo Itoje in Blog Updates, Featured, Land Tips and Advice, Uncategorized
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This post was inspired by a question asked by one of the visitors to this website. I decided to expand on my response and publish it as an article because I know more people will find this helpful.
Question:
Kindly let me know what your real estate services and how this may benefit us in the UK. Particularly around land banking and flipping.
Stephen from England
My real estate services include:
- To help you identify safe land in strategic places in Lagos within an estate with available plots to buy.
- Help you process your application for such land and make sure you get your documents after payment.
- Help you follow up with the estate developer should you have any concerns later on and make sure your concerns are addressed.
- Keep you up-to-date about new development on the land.
- Rinse and repeat. Helping you over time build a solid property portfolio in Nigeria.
How does this benefit Nigerians Abroad?
Most of my clients are based abroad. UK, US, ITALY, SINGAPORE, CANADA. They find me either through a search they did or through a referral.
People abroad are looking for investment opportunities to put their money back home and there’s no investment opportunity in Nigeria that offers better returns and stability than the real estate industry. Land never depreciates. The worst that can happen is that price remain constant for awhile. But usually we see good price appreciation especially when you focus your investment in strategic places.
Land Banking and Flipping in Nigeria and why it works better for those abroad
First what is land banking?
Land banking is the practice of purchasing undeveloped land with the intention of holding on to it and selling it at a profit at a future date.
Read: How Many Years Is It Good To Keep A Land In Nigeria Before I Can Sell?
There are different real estate investments you can do and make good profit from including renting. However land banking is the only real estate investment strategy that requires zero time and effort. All you have to do is make good buying decision and then wait. And in a few years or more cash out big. Instead of depositing your money in the bank where you make like 3% in a year simply be depositing it on landed properties.
Anyone can do land banking and flipping and make good money from it. But it’s even better for those based abroad because since they don’t live in Nigeria they are more patient to leave the land to triple its price before selling. And the years does seem to fly by quickly when you’re not paying attention.
Land Banking Strategy that works
For you to be successful with land banking, you have to apply a strategy to it and the strategy is simple. Only buy your land in an area that has indication for a good price appreciation within a few years.
How do you know a land that has potential for high return on investment?
Look at the financial status of people who live in the area. You can easily tell this by checking the current cost of housing there. Be careful here though, the higher the cost of living doesn’t always mean better appreciation. You want to make sure that the area isn’t already at its peak for property appreciation where it can now only appreciate with 1% or less every year. Example of such areas are Lekki phase 1 and Victoria garden city. Investing in those areas now will live you in debt and give very little returns. The time you should have bought into those areas was 10 years ago, now it’s too late.
The place you should be investing now with very fast growing cost of housing is Sangotedo and Abijo Lagos.
For example rent in Emperor estate which is just opposite Novamall (Shoprite) Sangotedo cost about N4million per annum for a 3 bedroom duplex and about N5million for a 4 bedroom duplex. And property prices there is N95 million for a 3 bedroom and N115million for a 4 bedroom. This was as at writing this August 1st, 2018.
Fortunately for you there are still some undeveloped lands behind Shoprite and within a few minutes drive from Shoprite. Developers are picking them up quickly now and some are starting to develop. Even though some will think they are expensive now they are just starting. If you buy now you are positioning yourself for a quick high return on investment. I guarantee you!
How I Helped a Client in London turn N8.4million to N16million in 17 months through Land Banking
From some of the undeveloped lands behind Shoprite, our fastest growing estate developer Landwey, bought some and named it Westwood Park Estate. When Westwood Park estate was opened for sale in early 2017, someone based in London contacted me about the estate. He was interested but thought it was a bit expensive. I convinced him that it was a good buy and he bought one plot.
Within a year Westwood went from N8.4million to N14million. And best part? It sold out! And when it did we still had people lining up to buy. There was a particular client who was desperate for a plot in the estate and asking to be considered, but there was no more plot to sell. Then I asked my client that bought in 2017 if he was willing to sell, and he was like…sell fire!
He kept his plot and now Westwood reopened 10 plots for sale at N16million a plot, from those who want to sell theirs. And my client who thought it was too expensive then now regrets not buying more plots. Every chance he gets he tells me “I should have bought more plots of Westwood”, “you should have pushed me to buy more”. Imagine if he had bought 2 or 3 plots. He is still holding on to his plot. I am sure if he waits a few more years he can sell that plot for as high as N30million.
Why the jump in price in such a short time? The answer is Location and Estate development. The only reason the undeveloped lands don’t currently sell for N30-40milion is because they are not yet developed. But once they start to develop them, they will jump in price especially if they are built to the same standard as Emperor estate as they are in the same neighborhood. So there is still a lot of room for Westwood price to grow. With the infrastructural and amenities planned for Westwood within the next 2 years it should compete with Emperor Estate in price.
Truth is, this kind of quick high returns doesn’t happen every day. But it can happen with every of your land investment if you’re very strategic about the lands you buy, which as I have said is necessary to do really well with land banking and flipping. If you want this to happen for you with every land banking you do then choose a good location and buy from a progressive estate developer like Landwey. Westwood’s success wasn’t a stroke of luck, another of their estate called Orangeville estate in Ogombo appreciated quickly too. It was launched after Westwood started selling and it was selling for N7million. Now after only 14 months it sells for N11million/plot.
When you want to buy a land within the Sangotedo and Abijo axis now pick an estate that is still upcoming, without any built houses inside it so you give the land room to appreciate continuously in price as the estate is being developed. Make sure too that you buy from an estate that will deliver good infrastructural and amenities, otherwise your land will never be worth as much as luxury neighboring estates.
For right now the estate I recommend within the Sangotedo/Abijo axis to invest in for land banking is East Amber estate. It’s still coming up and has a long way to go in terms of development and therefore price appreciation. It’s the fastest developing estate from Landwey so far, ready to build.
Other Places to Invest for Land banking
Other places to invest for land banking are places with great landmarks. And right now that place is Ibeju Lekki. Ibeju Lekki is the fastest developing area in Nigeria as a whole right now. Ibeju Lekki is where you have the Lekki Free Trade Zone, Dangote refinery, Proposed airport etc.
Right now a major part of Ibeju Lekki is still undeveloped. So lands are still selling cheap. It’s the right time to take advantage and bank some plots before it is developed and prices skyrocket. Think of Lekki Phase 1 10 years ago.
Right now a land with good title within an estate in Ibeju Lekki sells between N2.350million to N6million a plot.
And I recommend Livewell Gardens to you for land banking if you choose the Ibeju Lekki axis to invest.
Read:
Why Invest Now In A Land In Ibeju Lekki Lagos Nigeria
How To Invest In Lands Around Lekki Free Trade Zone And Cash Out Big
Yes, buying a land within an estate is more expensive because they include in the price administrative cost and profit margin. However there’s a big advantage to buying from an estate when land banking, and that is you never have to worry about someone reselling your land to someone else due to abandonment as is the case with Omonile. And if the proposed estate is going to be a standard estate, with all infrastructure and amenities, then that too will help price appreciation when it starts developing.
Read:
About Land Statutory Charge And Estate Development Levy
Why Buy Land From Real Estate Company Instead Of Omonile
How To Buy A Land In Nigeria From Abroad Without Fear Of Scam
Want To Send Money To A Sibling To Pay For A Land For You? DON’T!
