Good Evening and Welcome to 2016! It's Brabus again and this time we need some hard talk to get our new year started.

I'm sure there are some people who doesn’t love the controversial headline. And I also believe this topic is going to upset some commercial brokers, investors and real estate agents who will be ready to unleash a mouthful of comments on this thread.

Now before you make your comments, please keep in mind that I’m a big believer in commercial real estate investing and I'm well aware of the direction we are headed (in Nigeria) right now.

So I'll advice you to sit back, relax and enjoy this topic. It'll be fun and educating.

cc: seun, lalastica

I don balance well for the gossip be that..




BIKO¡ Someone should call that grandnut girl for me !!

The bad news no one will tell you!


You might have heard that there's boom in the Nigeria real estate sector, blah, blah, blah; that any type of property, whether it’s commercial or non-commercial, is a good investment opportunity in Nigeria. And more so, the commercial properties offer much more financial rewards in comparison to non-commercial properties.

But the things most people won't tell you is that investing in commercial properties is quite a bit riskier and messier than investing in non-commercial real-estate.

Here, I’m going to touch on the key issues that should make you think twice before investing in real estate.

Before I do, let's define Commercial Real Estate

Commercial real estate is a class of property that are used for business purposes. It consists of three sectors: office, retail and industrial. Commercial property is often preferred for reasons like high returns on investment, longer leases and smaller deposits. These things look good mostly on paper but the associated risks are enormous.

Commercial properties are complicated to understand and manage.


Before investing in a residential property, you (in most cases) are already armed with information about the rental market, the build cost, what it will cost to repair the house (if you're buying-to-let), the value of the house after the build/reno and the kind of rent that you’ll be able to get from it. These simple things come with experience, and none of the information are difficult to obtain. In fact, you can get a lot of information simply by asking people. Talking to the neighbors about what other places nearby are able to collect in rent will immediately give you a good idea of what you can expect and what to invest.

Simple! You think.

Things are not so with commercial property. This requires been armed with similar information and much more complicated details.
Figuring out the numbers/stats requires knowledge that are not readily available. Other crucial factors includes the future desirability of your property, the lease period, how solid the tenant is and the type of business that best suits your property. The value and the rent of your property also depend on the types of businesses running in the area in which your property is located. All this and many more makes it quite complicated to jump into commercial real estate investing.

Commercial properties are sensitive to economic conditions.

As the economy grows and shrinks, both commercial and residential properties change with it and can have a lower ROI than expected. But experience have prove it to us that commercial properties are far more sensitive to a changing economic climate. Everyone needs a place to live, and most jobs are relatively stable. More people now work-from-home. Even when the economy is taking a downturn, people will always need to have a roof over their heads. There's 17 million housing deficit in Nigeria yet we have thousand of unoccupied commercial properties lying down.

When the economy is strong, the demand and the price of commercial real estate go up. People renting commercial property may choose to operate from home instead and close shop when the market is bad. But, even when the economy is doing great on a national scale, local economic changes (government policies) play their part as well. Maybe the location you’re offering is no longer as desirable as it once was or the location was affected by new government policy. When that happens, your property might go years without having a tenant.

Valuing commercial properties is difficult.

Residential properties are usually rented out by using rent comparison. This means the owner compares his property to similar properties around. And finding similar residential properties is never a difficult task. It usually means going around the neighborhood or from estate agents.

In the case of commercial properties, it is very difficult to compare two properties. A number of factors affect the value of these properties. It is very hard to find similar looking properties that have been rented out recently and are also relevant for the same target audience.

Getting tenants takes longer with commercial properties.

Though commercial properties can enjoy long-term leases of three or even up to 10 years upfront. However once it's vacant, it usually takes much longer to find suitable tenants for these properties. Since these properties are rented out for business purposes, finding a suitable match between the location of the property, the type of the property and the business requirements of relevant companies usually takes a longer time.
That has a big effect on the cash flow. The owner is also expected to cover all the costs (maintenance, fees and licensed as required, etc) during this period. This can be a huge burden on the owner, as it cost a lot more to maintain commercial properties when compared to residential real estate.

In addition to all this, handling commercial tenants, lease value and vacancy agreements demands quite a lot of expertise which comes at extra cost to the owner.

Old commercial properties are threatened by new and upgraded properties in the same area.

Investors of old commercial properties are always threatened by newer and upgraded commercial properties in the same area. Tenants always look for modern and upgraded office areas or business spaces. It’s the same with residential properties but the cost of upgrading offices can be a lot more expensive than upgrading a house. As newer properties pop up, the risk of vacancy to existing properties increases which might mean the owner of old properties will be forced to lower their rents.

Before I drop the last point, it may be worthwhile to ask ourselves "Is investing in commercial property worth the hassle?"

Financing a commercial property is difficult.

This is one very important factor not to be overlooked. Financing residential rental properties is never difficult, as there are a large number of lenders (mortgage houses) available who will offer loan for a period of 15 to 30 years. And moreso, the residential real estate isn’t expensive anyway and is something that can even be paid off using rent money.
In the case of commercial properties, the loan amount (that's if you're able to get a nod from your bank) will be amortized for lesser year.

It’s true that larger properties can yield a more steady income, but to get that kind of money from a bank, you’ll need experience to go with it.

Investing in commercial properties require a lot of ground work. You need to pay your due diligence evaluating the market and the property. If you want to go ahead with investing in commercial properties, you need to keep an eye on local market and property conditions. You have to do a lot of calculations, as a number of factors affect the value of a commercial property. Lastly, while you do all that, you should have a solid exit strategy in your plan. It’s all these things that make residential real estate so much more attractive for investors, especially those who are just starting out.

Feel free to share your view.

Good write up...

brabus:
Investing in commercial properties require a lot of ground work. You need to pay your due diligence evaluating the market and the property. If you want to go ahead with investing in commercial properties, you need to keep an eye on local market and property conditions. You have to do a lot of calculations, as a number of factors affect the value of a commercial property. Lastly, while you do all that, you should have a solid exit strategy in your plan. It’s all these things that make residential real estate so much more attractive for investors, especially those who are just starting out.

Feel free to share your view.

In 2016, NextHome recommends residential properties to newbie investors to start off with and then once you gain years of experience along with a substantial portfolio holding in residential developments, its worth looking into the commercial side. Maybe a mixed-use development first; then retail complex and malls. Once you’re 100% leased (commercial properties usually have longer lease), you’re basically on cruise control.

What's trending in 2016!

Residential
Mini flats, bachelors pad, 2 bedroom flats, terraced flats, and apartments.

Commercial
Event center, parking lots, warehouse, amusement park, mixed use development, malls and shopping centers on single/ double floor, pools and astro turfs, spas, outdoor bars and clubs, and more.

Hot Locations in Lagos for commercial and residential properties
Lekki Free Trade zone, Ikeja, Orange Island (residential for the big boys), Surulere, All lands from Lekki Roundabout to Lagos Business School, Ijesha (redevelopment into commercial), Isheri Oshun, Okota, Gbagada and environ (commercial), LASU to Badagry, Sangotedo Monastery road (residential), Ajayi Apata and more.

Next-Rated and Upcoming

Epe, Abijo GRA, Lekki Scheme II, Agbowa, Imota, Oko Orisan, Igando, Lusada, Okokomaiko, Okun and more.

Is Badagry, LASU hot now? on what basis?

I have been to Ajayi Apata alot of times (was there last thursday) and nothing seems to be happening there.
Will you advice someone to take a punt on this? if yes, why?
Await your feedback...

brabus:
What's trending in 2016!

Residential
Mini flats, bachelors pad, 2 bedroom flats, terraced flats, and apartments.

Commercial
Event center, parking lots, warehouse, amusement park, mixed use development, malls and shopping centers on single/ double floor, pools and astro turfs, spas, outdoor bars and clubs, and more.

Hot Locations in Lagos for commercial and residential properties
Lekki Free Trade zone, Ikeja, Orange Island (residential for the big boys), Surulere, All lands from Lekki Roundabout to Lagos Business School, Ijesha (redevelopment into commercial), Isheri Oshun, Okota, Gbagada and environ (commercial), LASU to Badagry, Sangotedo Monastery road (residential), Ajayi Apata and more.

Next-Rated and Upcoming

Epe, Abijo GRA, Lekki Scheme II, Agbowa, Imota, Oko Orisan, Igando, Lusada, Okokomaiko, Okun and more.

ANYONE WHO HAS ANY PROOF OF FRAUD, MISAPPROPRIATION OF FUND, DIVERSION OF PAYMENT, THEFT FROM BRABUS OR BRABUSNG SHOULD SEND IT TO pevscamm@gmail.com
WE ARE BUILDING A CASE AGAINST HIM. THANK YOU

abrahamwise:
ANYONE WHO HAS ANY PROOF OF FRAUD, MISAPPROPRIATION OF FUND, DIVERSION OF PAYMENT, THEFT FROM BRABUS OR BRABUSNG SHOULD SEND IT TO pevscamm@gmail.com
WE ARE BUILDING A CASE AGAINST HIM. THANK YOU

Hian and I was about contacting him, Naija na wah

excellentmomma:


Hian and I was about contacting him, Naija na wah

You can still go ahead and contact me here. Contacting us doesn't have to transalte into a business all the time.
I can't count the number of people I attend to their request offline that do not have any business relationship with me.

Thanks for bumping our thread.

You can equally visit our website (www.nexthomedesigns.com) for more exciting topics on house construction in Nigeria.

Brabus.

Note: If there is no separate metering for the electricity, the tenancy agreement should put in a calculation about how the tenant’s costs will be worked out. For example, a calculation for electricity may be as follows:

total amount of bill ÷ total number of bedrooms in the apartment block × number of bedrooms in the rental premises in this tenancy agreement or based on different variables.

It is important to include these calculations as the tenant is not obliged to pay a utility bill unless there is written agreement about how the bill will be calculated.

Read more here Rentals: Tenant vs Landlord costs

n3xt:


Read more here Rentals: Tenant vs Landlord costs

What happened to your other handles e.g Brabus and BrabusNG?

FastShipping:


What happened to your other handles e.g Brabus and BrabusNG?

Brabus is hail and healthy. NextHome has only employed the service of an online content manager whose major responsibility is to develop the voice for all aspects of the organization's online presence.

However, Brabus is still reachable via his mobile +2348023429122 and email <bosun@nexthomebuilders.com>

Contact us in the way that is most convenient for you

Phone 0700NEXTHOME
Email support@nexthomebuilders.com

n3xt:


Brabus is hail and healthy. NextHome has only employed the service of an online content manager whose major responsibility is to develop the voice for all aspects of the organization's online presence.

However, Brabus is still reachable via his mobile +2348023429122 and email <bosun@nexthomebuilders.com>

Contact us in the way that is most convenient for you

Phone 0700NEXTHOME
Email support@nexthomebuilders.com

and were is the case they are building against u? am getting impatient

n3xt:


Brabus is hail and healthy. NextHome has only employed the service of an online content manager whose major responsibility is to develop the voice for all aspects of the organization's online presence.

However, Brabus is still reachable via his mobile +2348023429122 and email <bosun@nexthomebuilders.com>

Contact us in the way that is most convenient for you

Phone 0700NEXTHOME
Email support@nexthomebuilders.com

Brabus, why na?

FastShipping:

Brabus, why na?

bebe2:

and were is the case they are building against u? am getting impatient

The entire NextHome team looks forward to a very professional working relationship with you; and we ready to support you in any way possible to serve our audience better.
If there are any of our areas of interest on the Internet and offline that we are not doing our job well, please do not hesitate to contact us via any of medium provided above. We will action all requests.

Lagos building permit requirements and price depends on the scope of your project and the rate of each local government area where you want to build. In Nigeria, it can be cheaper if you know how to get the building permit yourself in stead of letting your contractor do that (the last is more likely to be asked for some grease money). Welcome to the real world! See how easy it is to get your title documents in Lagos with links to various forms and documents required.

Read more at: http://nexthomedesigns.com

Suggested reads How to process construction permit in Lagos | Case study of a warehouse

Please go through this Nexthome thread and tell us if you see anything wrong

https://www.nairaland.com/2089904/desmond-flats-ogombo-nexthome/10#44467739

Regards

Envy is an emotion we are all bound to feel at some point, and it can be a negative influence on your mind. The sooner you tackle it, the better your life will be.

@ Complainant above,

Can you in articulate manner list all your allegations against Brabus? I'm here to address all if the other thread opened for such can't serve your need.

Just give your allegations in bullet point. I believe you're talking fraud. Let's hear your complaints. How you were defrauded? And we will respond to your allegations.

Meanwhile, thanks for posting the link shared online. The issue which happened in 2012 has been laid to permanent rest. Find the link to the rest of the story attached.

https://www.nairaland.com/687022/building-luxury-block-flats-day-to-day/55#16407843

https://www.nairaland.com/1793643/nexthome-project-gallery/2#38391704



Is this a reprisal to the email attached concerning your project?

Hello Guys,

Please click on this link and hear for yourself....Speaking of Robbing Peter to pay paul...


Guys Be warned...Dont enter one chance o.......Be careful of Brabus Nexthome. He comes online to Act as someone who knows it all. But since he is more interested in things that happens in the background....Explain this





https://www.youtube.com/watch?v=oq7reIR3zUY