Starting a real estate business in Nigeria seems to be on the rise as every individual is starting to get attracted to the commission received per sale of land, benefits from agent activities, and more.
Basic necessities of life include food, clothing, and shelter. With these things, humans can survive in life.
With the ever-growing population being experienced in the country, as daily, people are looking for houses to rent or build a home of their own, hence the need for shelter is increasing too.
Starting a real estate business has helped fill the gap to some extent. As undeveloped or underdeveloped areas are fast becoming developing, this and some other factors has contributed to the need for the business in Nigeria.
The real estate occupation is one of the 45 hot business ideas in Nigeria that anyone can do.
Today, you can make a lot of money if you learn how to start a real estate business, whether as a real estate agent or as an investor.
All in all, everyone is looking for a successful business to be involved in. These days, real estate is considered to be one of the most profitable and growing businesses.
Starting your own real estate venture is a good career option that comes with a lot of difficulties and challenges.
The market is a well-established one with tough competition from numerous new and established individuals and companies.
NOTE; When there’s competition in a business niche, it means existing businesses are making money, and you can too!
However, do not be intimidated by the rivalry; rather be focused on building a unique brand that stands out amongst the rest.
Real estate companies require a substantial amount of money to start but you can still start something real with minimal or no money.
What Is Real Estate Business?
Real estate is a property consisting of land or buildings or a huge collection of properties, while real estate business is a profession of buying, renting out, or selling properties such as land, homes, buildings, and apartments for commercial purposes or personal use.
Real estate agents assist homeowners, businesses and investors to buy and sell all these types of properties.
It is a successful profession if you know how it is done. You need to know how to spot good deals and at the same time, take action when necessary.
Be that as it may, spotting deals and taking the right action at the right time makes it a profitable venture. Put in mind that success in real estate does not just come overnight; it requires hard work and dedication.
So, let’s share with you how to start a successful career in the real estate business world.
Practical Steps to Start A Real Estate Business In Nigeria
As a business owner, nurture your ambitions and become a goal-oriented and organized person.
Keep in mind that the real estate sector is not about achieving instant success. Instead, it is a long-term game, which requires a lot of patience and hard work
Here are seven important steps needed to operate a successful real estate business in Nigeria:
Conduct Extensive Market Research
How does the sector work? Who are the big players? What exactly do they do? How do they serve their clients? What laws guide operations in the city/state where you want to operate in?
These questions have to be considered and answered for you to have a clear vision of your direction. Your research can also include learning from those whose real estate businesses are thriving.
A successful business plan is always preceded by in-depth industry research, which should identify a specific function, market area, and potential competitors.
Your research should focus on what market area is best suited to your investing niche. Online research, networking events, and even getting a mentor can help during this part of the process.
Always remember, the more research you complete now the more prepared you will be to start developing your business plan.
Here are some points to consider:
- Make sure that you research the market early to save time and money
- Find out if you possess the right skills by researching the market
- The research will give you some real world experience
- As you know more about your niche, you may find a mentor to guide you
The planning and research will give you confidence in moving forward in a measured way.
For example, if you know how much cash you need to get your company started, you will plan your office building design, purchase the office furniture, equipment, and other things accordingly. You can set realistic goals also
Develop A Tactical Business Plan
After conducting your research into the business, writing a good business plan is the next important thing to do.
A business plan is vital for any real estate investor, and one of the best advice you’ll get in the housing market is to start out small and plan.
This step is especially important if you’re planning on becoming a real estate investor for the long term. You can get advice from Small Business Development Center experts when writing your business plan.
Remember, your business plan is a living document; that is to say, it has to well write and detailed, also you just don’t “develop it and forget it”.
To emphasize, the best real estate business plan is one that evolves with you and one that you continue to work on and alter its contents as needed as your business grows.
Relatively good real estate business software will assist you in maintaining your business plan.
The purpose of a real estate business plan is to set goals and a direction. But more importantly, you can take the plan as a document to investors or lenders for financial assistance.
Decide On The Type Of Real Estate Business Sector
Regardless of the type of real estate business that you have decided to go into, there are plenty of opportunities to make money. Your personal decision on the type of business sector determines your success rate.
Although, in Nigeria, you need not have any form of formal education to be an estate agent; but there are real estate institutions dedicated to training individuals willing to learn the trade.
You can get trained to run a successful real estate business by taking various courses on the subject matter. In fact, you can register with any of the accredited property training institutions in the country.
You can get trained in any of the following property management training: Facility Management, Mortgage lending and real estate financing, Advanced Real Estate Management. Nevertheless, a good training institution on real estate business will set you on the right part.
Register Your Business
Business registration is very important. If you really want to make this business to the highest level possible.
Register the business with the Corporate Affairs Commission (CAC). This gives you an edge over unlicensed estate agents.
Registering as a Business Name with CAC is enough at this stage if you can’t afford to register it as a Limited Liability Company (LLC) but if you can afford it, it is a welcome idea.
There are also associations and agencies that regulate real estate operations in Nigeria therefore get to know the rules and regulations guiding professional real estate bodies in Nigeria to ensure that you are not operating against the law.
Real Estate Marketing Strategy
Train yourself on how to think strategically about what’s happening in your market and be ready to offer something of value to your clients, no matter where they come from.
Just like any successful business, a good real estate company or agent needs to have a strong marketing strategy. This marketing strategy needs to focus on every aspect of the business that will bring in clients.
In general, there are only two types of marketing strategy you can go with; these are Online Marketing Strategy and Offline Marketing Strategy.
With the online marketing strategy, you will engage yourself to use all the available online marketing options available to you.
Such options may include the use of a social media marketing strategy, creating a website or Search engine optimization (SEO) strategy.
The offline marketing strategy you may want to use as an estate agent in Nigeria is by words of mouth, placing advertisement in magazines and newspapers or to employ the services of sales agents for your business.
Branding And Customer Loyalty
Branding is essential to build credibility and your business will look bigger than its size to the target consumers.
There are tons of Real estate companies in Lagos Nigeria today, and each brand stands out.
Branding is all about creating a perception about your business in the minds of people.
Brand credibility is important in building a successful business in Nigeria especially when it has to do with the investment of millions of Naira. Branding is all about creating a perception about your business in the minds of people.
To turn your real estate business into a trustworthy brand, you need to give your customers more than enough value for their money and build a relationship by engaging with them on a personal level.
Also, set your business apart from the competition by investing in premium branding identities such as logo, website, adverts, and more.
Options For Starting A Real Estate Business
In order to be successful in the real estate industry, one should have good knowledge and information in this field.
This basic guide will equip you with the knowledge and information you need to start your own very successful real estate business in Nigeria.
The business is capital intensive, but there are a few options to choose from if you want to start with a little amount of capital or with no cash at hand.
Partnerships are very common in real estate investing. According to Fortune Builders, a very common path in real estate investment is through partnerships.
What one investor lacks, the other can make up for. For example, one partner finding a distressed property at a discounted price, that could be you while the other one uses their credit score and working capital to finance it; just make sure everyone is bringing something to the table.
Though it is not advised to start a real estate business with borrowed funds, a serious-minded individual seeking to start a property business and can have access to a free loan with a very low-interest rate.
You can actually get a business grant from alternative funding sources, and invest in a finished property and gradually pay overtime.
Offering a Service
You can offer any service and find clients that own many plots of lands, you could negotiate to be paid with a land property, and should the service offered not up to the property worth, you could offer to pay the balance over time.
You can start a real estate business using the mortgage strategy. With this method, a small percentage of the total sum is paid and the rest spread over time while the property is handed over to you.
Most times, a mortgage bank is involved. If the borrower stops paying the mortgage, the bank can foreclose.
The thing about starting a real estate career is that it can turn you to an overnight billionaire. Make no mistake; there is a lot of money to be made.
Investment Opportunities In The Real Estate Industry
My biggest piece of advice for anyone going into the real estate world is to “start with what you have“.
As you grow in the business, you can expand your portfolio. Or you can start big straight away if you have access to capital.
Real Estate is very wide with many branches and divisions. Now, let us discuss these various divisions and the opportunities that are open for you.
Real Estate Managers
A real estate manager which can also be called Real Estate Broker, Realtor, or real estate agent is an individual that acts as an intercessor between sellers and buyers of real estate property.
Real estate agents connect sellers with buyers. It is not an investment per se but service rendering.
When sales are made, you receive your commission as the broker for successfully concluding the transaction.
This commission is usually shared with other participating real estate brokers or agents if you are not the only one involved in the deal.
The commission ranges between 10% and 25% depending on the location, type of property, the individuals involved, and your bargaining power. The most common is 10% and 15%.
In order for you to find buyers, as a real estate agent you can make use of different methods to make known to the public properties in your possession.
These include using fliers, banners, public notices, etc. The most common now is the use of the internet, by far the cheapest and easiest.
You can also place a “For Sale” or “For Lease” sign on the property indicating how to contact the real estate office and agent.
You can also advertise the property, using social media and digital marketing in addition to paper advertising etc.
This is a kind of business where you buy landed property at a cheaper rate and sell it at a later time to get profit.
This is one of the smartest investments in the industry and requires no effort whatsoever. Just your money and knowledge and you are good to go.
This strategy requires a reasonable amount of money and extraordinary efforts to start. All you need is some money and research knowledge to acquire your first plot of land.
After that, you can grow your business by buying tens of plots and acres of land and keep selling all year round.
Vacant lands in some areas are more expensive than other areas. You will make more in sales when it comes to selling lands located in commercial areas than those located in non-commercial areas in the country.
This strategy is simple but costly; this is where the big guys in the industry are putting their money.
This involves buying a property in a good location, develop it into commercial structures or luxury apartments, and sell for a bigger sum of money at least double of what is spent on developing the property.
Such a kind of real estate business requires much more investments than other types of real estate investments, but it can yield a significantly larger profit.
Commercial Property Leasing
Another good way to make money on real estate is renting out properties. This works in a simple and unique way. Buy a property in a good location and lease it out for temporary use.
It is important to purchase the building in a good location, and you won’t struggle for tenants. The occupants will pay you every month or yearly.
It is worth mentioning that commercial property leasing can be divided into three different categories namely: Office Property, Retail Property, and Industrial Property
You can lease it to churches or business that wants to develop a provisional outlet such as car wash and mechanics.
They will be paying you monthly rent while the property still appreciates for future sale. It is like borrowing money for someone and gets paid double interest and still get your money back. What a lovely and sweet investment!
Residential Property Leasing
This is another Simple and profitable type of real estate business because no matter what the economic situation of the country, people always need a place to live.
Not only does this type of real estate option deliver a stable income, but it is also the most popular type of real estate business in Nigeria.
As a matter of fact, we have more real estate agents in Nigeria dealing with residential property letting than any other type of property business.
Summary of Starting A Real Estate Business
Although it is not a daily income business, the business is very profitable and real estate investment is one of the best investments any serious minded investor needs to look into.
With little diligence and prudence, you can confidently and successfully start your own real estate business and grow with time.
Take a closer look at the business and see how you can invest in this sector of the economy irrespective of how much you have and make a serious profit.
One thing very good about the real estate business in Nigeria is that the investment opportunity is so diverse that there seems to be something for everyone.
The business requires a business plan and research of a niche market to find out the target consumers, and make huge returns.