The real estate industry in Nigeria is a very alluring industry.

This is not surprising, as the industry is very lucrative and has created many millionaires and billionaires.

But, just like any industry, as much as it appears like an all-comers affair, it is anything but that.

If you must succeed in real estate in Nigeria, you need to know exactly how to start and succeed in it.

As much as the real estate industry in Nigeria has produced many millionaires and billionaires, there have also been many victims who have gotten their fingers terribly burnt because they did not know how to succeed in the real estate industry of Africa’s biggest economy!

So, how do you start and succeed in real estate in Nigeria?

Before we answer that question, we need to understand what real estate means, as well as the types of real estate. What is real estate you might ask: real estate may be defined as the land with all the improvements that human activities added to that land such as perimeter fencing, building, landscaping, farm ranches etc. real estate also include natural resources beneath the ground such as minerals, crops. The improvements to land from human activities can also be beneath the ground such as water pipes or sewage tanks

Fundamentally, there are 6 types of real estate:

1. RESIDENTIAL REAL ESTATE

2. COMMERCIAL REAL ESTATE

3. INDUSTRIAL REAL ESTATE

4. AGRICULTURAL REAL ESTATE

5. MIXED-USE REAL ESTATE

6. SPECIAL USE REAL ESTATE

1.RESIDENTIAL REAL ESTATE

Residential real are properties in the residential category. This is the most important part of real estate. This type of real estate caters for homeownership and reduction of the housing deficit gap.

Broadly speaking there are two (2) main types of residential real estate:

1. Single Family Homes

2. Multi-family homes

Single-family homes may include detached or attached homes such as Duplexes and Townhouses while Multi-family homes are apartment buildings that usually allow many families to obtain housing units in a building. Many investors looking to maximize rental income usually favour apartment buildings in their property asset acquisition because it guarantees multiple streams of rental income from various tenant families in such rental apartment buildings.



2. COMMERCIAL REAL ESTATE

Commercial Real estate is a type of property that is used for the purpose of business or various forms of commercial activities such as office spaces, shopping centres, Parking Lot, Malls, Stores, and entertainment facilities such as Cinemas, Studios, hotels, motels,

3.INDUSTRIAL REAL ESTATE is the type of real estate that is used for manufacturing or industrial activities. These include properties such as warehouses, powerplants, factories, tank farms etc. Industrial real estate is about the least talked about real estate but it is an equally important real estate that should not be overlooked.

4.MIXED-USE REAL ESTATE is the type of property that has multiple uses. When commercial and residential activities occur in the same property such property is said to have mixed-use.

5.AGRICULTURAL REAL ESTATE is the type of land and property used for the purpose of providing crops, raise animals and plants. An investor might buy, sell or lease land for agricultural purposes these include farmlands and ranches.

6.SPECIAL PURPOSE REAL ESTATE: These are the type of property that is usually publicly held such as places of religion, schools, government buildings, cemeteries and recreational parks.

So, how do you start and succeed in real estate in Nigeria?

First, Identify the aspect of real estate you want to focus on.

Practically speaking there are about 5 ways of making money from real estate:

These are:

1. Real Estate Speculation

2. Rental income

3. Property development

4. Property Flipping

5. Real Estate Brokerage

REAL ESTATE SPECULATION

You can earn income via real estate speculation. You can become a real estate speculator by buying property, holding it for a period and then selling it after the property price appreciates in value.

RENTAL INCOME

You can also earn income via rental income. This refers to buying rental income-generating property and making money from the rent paid by your tenants. The rental income here refers to income earned by the rental of real estate.

PROPERTY DEVELOPMENT

You can also earn income via property development. As a property developer, you can buy land, build residential apartment blocks on them, and then sell each apartment at a premium price to recover your capital and make a profit too. This is for the big boys and is consequently cost-intensive.

PROPERTY FLIPPING

You can also earn income via property flipping. Property flipping refers to the art of buying an old property, renovating it, and selling it.

It is not unusual for an old property in a choice location to be undervalued because it has become old. As an investor desirous of earning revenue from property flipping, you can identify such property, buy them at their reduced and under-valued price, renovate them and sell them. After the renovation, because the property is already in a choice location, the value of the property is bound to soar. You can proceed to make your profit from the sold property and move on to the next one.

PROPERTY BROKERAGE

Lastly, you can earn an income via property brokerage. This requires that you facilitate a real estate sales transaction and earn a fraction of the value involved as sales commission. A person who engages in this is called a realtor.

Written by Dr Freeman Osonuga

Dr Freeman Osonuga is a Multi-award winning Nigerian Real Estate Investor, Advisor and Broker. He is a global leader who effortlessly dons many caps and has made an easy meal of successfully being a Real Estate Broker, Philanthropist, Best-selling Author, International Public Speaker, Medical Doctor and a successful entrepreneur in all his strides.