The Basics Of How To Start A Real Estate Business In Nigeria

Real Estate Business In Nigeria

There have been a lot of discussions going on for some time now in Nigeria and worldwide, whereby most people ask the question about the real estate business in Nigeria.

Real estate is a housing and land property owned by an individual or a company. A real estate business is the business aspect of land and housing properties.

Many business owners dream of having a real estate license and having knowledge in the business because it’s a modern-day business and it is a business that can make you rich in a short period if it’s been done in a legit way and through the right authority.

However, to start a real estate business requires land and physical properties. Also, real estate can be owned in any location and can be sold in any location due to the choice of the clients.

More so, clients preferred the developed and expanded areas, while most preferred a quiet, cool, and newly developed area. Therefore, as a real estate agent, you must have a lot of connections with sellers, building contractors, architects, engineers, and other estate developers, for an effective business experience.

All the same, the real estate business requires a lot of research and findings on a particular property before engaging in business. It also requires going through the right authority, which makes it easier for you to grow a reputable real estate business that is trusted by people to invest their money in.

Above all, growing a reputable real estate company brings more clients, more contracts, and government projects, which means, more money for you.

In this article, we will discuss all you need to know about starting a real estate business in Nigeria.

Who Is A Real Estate Investor?

A real estate investor is someone or an organization who specializes in the purchase, rental, sales, or management of real estate for profits. The sole aim of a real estate investor is to make a profit.

Is Real Estate A Good Business In Nigeria?

Yes, a real estate business is a good business to start in Nigeria only if you have understood how it works. Moreover, with a population of more than 200 million people, the real estate industry satisfies the high demand for housing and other related properties. Perhaps, this makes real estate a good business to invest in Nigeria.

Is Real Estate Profitable In Nigeria?

Real estate is a profitable business to start in Nigeria. And as the population is increasing there has been an increase in demand for housing, landed properties, etc.

However, many Nigerians rely on the services of real estate agents to get a rented apartment and buying & selling of properties. Therefore, the higher demand for all these services has made the real estate business a lucrative venture.

Also, if you are in the field of land flipping, there are a lot of profits to be made because land appreciates. For example, you can buy land at the rate of ₦5 million, and in the next two years that same land will sell for ₦8 to ₦12 million depending on how fast the area is developing.

What Are The Types Of Real Estate Business In Nigeria?

Four main types of real estate are most common in Nigeria and they are:

1. Commercial Real Estate: Commercial real estate deals on business-related properties like office space, shopping malls, warehouses, etc.

2. Residential Real Estate: As the name implies, it deals in residential properties including land and buildings used for housing. Examples of residential real estate are apartments, townhouses, family houses, etc.

3. Land Flipping: This is the type of real estate that involves buying and selling land. For instance, you buy land at a low price and sell it at higher prices when it appreciates.

4. Industrial Real Estate: Industrial real estate deals on buildings and lands that accommodate industrial activities like manufacturing, warehousing, factories, etc.

Can Foreigners Own Real Estate In Nigeria?

Yes, as a foreigner you can own real estate in Nigeria. However, before you rush to start a real estate business as a foreigner there are a few things you should know. First, there are legal frameworks guiding every foreign investor in Nigeria, and one of them involves obtaining approval from the government to acquire real estate properties.

Secondly, a foreigner can own real estate in Nigeria through joint ventures with Nigerian entities or citizens. Finally, it is very important to consult an experienced lawyer in this field before making any further decisions.

What Is The Demand For Real Estate In Nigeria?

Rapid urbanization, infrastructural development, and population growth in Nigeria have made the demand for real estate assets to be enormous.

Meanwhile, further analysis showed that the demand for real estate in Nigeria has grown more than 80% unlike before. Overall, the real estate sector is currently the fastest-growing industry in Nigeria.

How Much Can I Make From Real Estate In Nigeria?

It all depends on the type of real estate you want to get into. But all the same, on average, you earn a commission of 5% to 10% on any property sold or rented out through your real estate services. It is however known as “agent fee or commission”.

Additionally, you can make 2× profit from buying and reselling properties (most especially lands).

How Can I Get Clients For Real Estate In Nigeria?

Below are several ways to get real estate clients in Nigeria:

1. Make friends with other real estate agents and let them know about your real estate services as well.

2. Hire other people to join your team so that they can help you get buyers. And pay them on commission.

3. Advertise your real estate services online and offline to build your brand.

4. And lastly, be sincere in your dealings so that you can build trust from people. However, getting trust from people can get your property sold/rented faster because you will always be recommended due to your sincerity.

What Are The Challenges Of Real Estate Business In Nigeria?

The challenges facing the real estate industry in Nigeria are:

1. The capital is very high.

2. Purchasing of disputed land unknowingly.

3. High increase in building material prices.

4. Lack of proper regulation can be a challenge facing the real estate business. That is to say that unqualified agents operate in this industry thereby spoiling the reputation as a whole.

5. Trust issues among the real estate agents and also among clients.

6. You may face high competition.

7. You may face the challenge of a complicated transaction process and this can affect your real estate business negatively.

Who Regulates Real Estate Companies In Nigeria?

The regulatory bodies of real estate companies in Nigeria include:

1. Nigerian Institute of Estate Surveyors and Valuers (NIESV)

2. Estate Surveyors and Valuers Registration Board of Nigeria (ESVRBON)

3. Nigerian Institute of Town Planning (NITP)

4. Real Estate Developers Association of Nigeria (REDAN)

5. The Federal Ministry of Housing

Furthermore, the real estate industry in Nigeria is governed by several laws and regulations which include:

1. The Nigerian Urban and Regional Planning Law
2. The Land Use Act Of 1978
3. The National Housing Fund Act
4. The Public Health Law
5. The Nigerian Building and Road Research Institute Act.

Do I Need A Real Estate License In Nigeria?

Though there are various real estate agents operating without license. But for you to become a certified real estate agent you need to get a real estate license.

Regarding the above, you have to first understand the process of acquiring a license. For instance, in Lagos State, the LASRETRAD (Lagos State Real Estate Transaction Department) is in charge of licenses. And for you to get certified, you have to meet up with their requirements by passing their training program.

Meanwhile, every state in Nigeria has its perspective qualifications and requirements that the real estate agents must meet before getting a license. It is however advisable to contact any real estate zonal office in your state to know the minimum qualification.

What Are The Requirements For Registering A Real Estate Company In Nigeria?

1. The basic requirements for registering a real estate company start by submitting two proposed names of your real estate company to the Corporate Affairs Commission (CAC) for approval.

2. Then you register your real estate company with the approved name.

3. Furthermore, the details you will need in the process of registration are email address, proposed registered address, details of shareholders, means of identification, and electronic signature.

4. Another basic requirement is to register your company with the Federal Inland Revenue Service (FIRS). This is very important for tax purposes.

5. Then finally, you register with a real estate regulatory agency in your state and obtain the necessary licenses and permits.

How Can I Succeed In Real Estate In Nigeria?

To succeed in the real estate business in Nigeria, you have to first know your target market and understand the ups and downs of the business. Then most importantly, you need to take your marketing seriously to be successful as a real estate agent in Nigeria.

How Much Is Needed To Start A Real Estate Business In Nigeria?

The cost of starting a real estate business in Nigeria is ₦20 million to ₦100 million on average. But you must know that certain factors like the type of real estate business, business size & structures determine the capital required to start a real estate business.

On the other hand, other real estate services may require less than ₦500,000 or almost no capital to get started and that is finding a property for a buyer and earning a commission from it, or connecting a buyer to a seller and also earning a commission from it (Agent fee/commission).

What Are The Ways Of Starting A Real Estate Business In Nigeria?

To start a real estate business in Nigeria, you have to follow the below procedures:

1. Choose Your Real Estate Niche: For you to start a real estate business, it’s more important to choose a real estate category to get into. You have to be more wise and sensitive when choosing a niche, this is because the profitability of a real estate may depend on your location.

Also, understanding the real estate system will help you make the right decision.

2. Develop A Real Estate Business Plan: Now that you have identified the type of real estate you want to venture into. Next is to build a solid business plan that outlines all the strategies to attain success in your business.

3. Register Your Real Estate Business: First, you choose a business name that is simple to pronounce. Secondly, you register your business with the Corporate Affairs Commission (CAC) and get a certificate of incorporation. Lastly, you register with other real estate regulatory bodies in your state and obtain licenses and permits.

4. Start Your Business Operation Fully: Once you have launched your real estate business, getting clients will be the next line of action. And this is where marketing plays an important role. However, your business plan will help you figure out how to reach out to people and attract them to your real estate services.

Also, it is very important to partner with other real estate agents and businesses. As you are building a relationship with them, it will help in the growth of your business.

Finally, as long as there is enormous demand for real estate services, there are great possibilities of you making money in this industry.

Ambassador Victor Chidera
Ambassador Victor ChideraAmbassador Victor Chidera is a business consultant, writer and a blogger. He provides lots of professional and expert advice to small businesses, entrepreneurs and organizations. He has many years of experience in business, teaching field, and research work. And his aim is to provide business articles that matters to you both nationally and internationally.
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