Last updated on August 14th, 2023 at 08:09 am
The real estate business in Nigeria has been in existence for as long as one can remember. Our forefathers have been practicing it and we are still practicing it today, even though with a little difference.
Many people are practicing it without knowing it. If you are a landlord with tenants in your house or if you have ever sold land to people, you have done real estate business.
The moment you decide to go into it full-time or part-time, you will become a real estate businessman or woman.
The real estate business in Nigeria is not for the faint-hearted because it involves a lot of risks, research, mentorship, and dedication, but if you are willing to pay the price you will smile in the end.
This post will explain to you the types of real estate, careers in real estate, types of real estate businesses you can venture into, and how you can start a real estate business in Nigeria.
What is Real Estate?
Real estate is real property that consists of land and improvements, which include buildings, fixtures, roads, structures, and utility systems. Property rights give a title of ownership to the land, improvements, and natural resources such as minerals, plants, animals, water, etc.
In other words, the Real estate consists of land with everything that’s on it, which could be building, fences, water, or trees.
What is a Real estate business?
A real estate business is any business transaction that involves land, infrastructure, and natural resources existing on the land. The land could be used for residential, commercial, special, or industrial purposes.
Types of Real Estate
Real estate is generally categorized into five
- Land
- Commercial real estate
- Residential real estate
- Special purpose real estate
- Industrial real estate
1. Land
The land is the earth’s surface that is underdeveloped with every natural resource on it. Natural resources like water and trees. Real estate developers buy lands and then develop them to increase their value.
2. Commercial Real Estate
Commercial real estate consists of properties that are developed for commercial purposes that are used for hosting business transactions. Hotels, office buildings, shopping malls, and provision stores are examples of commercial real estate.
3. Residential Real Estate
These are properties that are used for residential purposes. They consist of buildings where people live in. Some examples are Bungalows, residential estates, single-family homes, apartments, and other residential arrangements.
4. Special Purpose Real Estate
Special purpose real estate is properties that are used by the public like cemeteries, hospitals, oilwells, amusement parks, worship places, and government facilities.
5. Industrial Real Estate
Industrial real estate are properties used for industrial purposes, such as factories, warehouses, dormitories, construction, logistics, transportation, etc.
Types of careers in Real Estate Business in Nigeria
It is common to think that the real estate business is limited to developers, salespersons, and brokers. In the real sense, many other people have to be involved for the real estate business to be complete, that is what you will read about next.
- Real estate Attorney – A lawyer that specializes in Real estate. They take care of all matters that relate to the Real Estate business in Nigeria.
- Home Inspector – Someone who inspects houses to make sure everything is in check for a buyer or a seller.
- Agent- Also known as a salesperson or realtor is an individual licensed to help people rent, buy or sell properties. They are middlemen and
- are entitled to a percentage commission or a flat fee for every successful transaction.
- Building Inspector – Someone that inspects buildings to make sure everything is in check for the buyer or seller.
- Appraiser – someone who analyses and evaluates properties to determine their value.
- Analyst- someone that takes the financial analysis of properties
- Developer – someone that buys land and improves its value by building infrastructures to increase its value before selling it.
- Landlord- Someone that gives his or her house out for people to rent for an agreed amount that is to be paid monthly or annually.
- House agent – Someone that helps landlords to find tenants for a commission.
- A broker – is a real estate agent that has the qualification and licenses to hiring real estate agents to work under and can even start a brokerage firm.
Overview of the Real Estate industry in Nigeria
For you to have an understanding of how the real estate business in Nigeria works you need to know about some subsections of the industry.
It is generally categorized into sales and marketing, development, brokerage, property management, lending, and professional services.
1. Development
This involves purchasing land and then improving it by raising structures or building on it. Real estate development increases the value of the land.
When a developer has finished building, he or she will then sell or rent it to people, by so doing profit is being made.
2. Property Management
This is the managerial category of real estate business in Nigeria. Managerial firms take care of managerial duties like building maintenance, repairs, painting, collecting of rents, and managing tenants.
3. Sales and marketing
There are sales and marketing firms that market and sell real estate units to buyers for a commission. They market the units to buyers with their resources and sales agents.
4. Professional Services
This category involves professionals that are involved in the real estate industry to make it function optimally. Examples of professional careers in the industry are analysts and lawyers as mentioned above.
5. Real estate lending
The real estate business in Nigeria have lenders that Real estate business person leverage to facilitate the smooth running of their activities. Examples of lenders are Government, Banks, and Credit unions.
6. Brokerage
This involves having a team of sales agents that help to facilitate the transaction between buyers and sellers. The firm that makes this possible is called Brokerage.
Types of real estate business in Nigeria you can start
The real estate business in Nigeria has many areas you can choose from to start, you will be learning about some of them next.
1. Become a real estate agent
This is the simplest way to enter into the real estate industry without having capital, you need to just have an understanding of sales. You can’t be a great salesperson if you don’t love selling.
It doesn’t require you to go to a formal school of marketing. For starters, you need to like working with people, because you will have to interact with a lot of people in your career as a salesperson.
When you sell to a buyer you are entitled to a certain commission, the more you sell the more money you have.
2. Become a real estate developer
Real estate developers are people that take land or property and develop it to increase its value before renting or selling it.
They have eyes that see beyond what is being seen physically with the eyes. A developer can see a skyscraper where people are seeing a garbage dump. They will then convert the garbage into a skyscraper.
To be a developer you have to be a risk-taker because it takes risks to take the bold step of investing without assurance and hoping for a great return.
Developers need to have a large capital to carry out their business successfully. You need to leverage the lenders to achieve your goal.
Real estate moguls like Donald Trump and Robert Kiyosaki have become masters in the real estate industry. You can become better by reading materials created by them.
3. Become a landlord
Landlords build houses and rent them to tenants to pay them monthly or annually. For Landlords to be rich they need to expand their reach by owning more houses for rent.
You can start by owning just one house and end up owning estates. You just to keep be consistent in learning and applying.
4. Buy and flip lands and properties
Some people earn a living by buying properties when the value is low and selling them when the value goes up.
You need to have a good understanding of the market to earn from this process if not you will lose money.
5. Manage properties
Real estate managers take care of real estate properties like estates and shopping malls.
You don’t have to own or buy properties to become a manager, you just need to have repair and maintenance tools with the right staff and strategy.
6. Real estate professional careers
The needed services of professionals in the real estate industry have created room for professionals to join the real estate business in Nigeria.
If you are a lawyer, account, or any other professional whose services are needed in real estate, you can narrow it down to real estate so you can create a brand in that niche.
7. Combine the real estate business ideas in Nigeria
You can combine more than one real estate business idea and be successful. That is to say, you can be a landlord and also a developer at the same time.
After mastering one area of real estate, you can venture into another field and increase your reach, which also means increasing your wealth.
How to start a real estate business in Nigeria
The post so far has explained the careers in real estate, an overview of the real estate business in Nigeria, it is now time to learn how to start your real estate business
1. Identify the real estate business or career
The first step you need to take is to decide on the career or real estate business in Nigeria you want to start with. Remember, some of the important ones have been discussed in this post.
Start by identifying the one that you can do and then start working towards becoming it.
You will need mentors to show you the ropes so you don’t repeat the mistakes they made. Taking this path will make your journey easy. There is a popular saying that says “you see better when you stand on the shoulders of people that have gone ahead of you”.
2. Create a business plan
A business plan will help to see the end of your business from the beginning. It will make you see things better.
It is important to write down a business plan because it will help you to identify challenges that could come your way while operating your business, which will help you identify how to solve them.
A typical business plan is made up of an executive summary, product, and services, market analysis, marketing strategy, financial planning, and budget.
If you cannot draft one yourself, you can contract it to others to help you, after which you will go through it to understand and verify if it will give you the desired result. But note that business plans can be adjusted with time as the business grows.
4. Register your business
The importance of registering your business with the Corporate Affairs Commission (CAC) to start any business in Nigeria cannot be overemphasized.
When you register your business, you can easily create a business brand because they will make sure no one has registered any business in Nigeria with the name you want to use for your business.
You will also be certified by Government which will give you the confidence to do your business anywhere you want to without fear.
5. Start with what you have
You must not have everything set to start your real estate business in Nigeria, you can start with the little you can gather from your savings, friends, and probably lenders.
When you start, you will be able to scale the business to a higher level because you would have grown in the business. By that time you will know the best lenders and best practices to carry out.
6. Create a real estate business website
Your real estate business in Nigeria will need an online presence since a large percentage of people in Nigeria are active online, and one of the best ways to do that is by creating a website.
There are important things you or your web designer will need to be able to design a real estate business, they are hosting, domain, and Content management system (CMS).
Web hosting is the space given to you on the internet to host your website. There are companies that sell hosting to people to create a website.
A domain is the name or identity of your website on the internet. This name distinguishes your website from other people’s websites.
CMS is the software that enables you to manage your content on the internet. The popular CMS in the world that is used to design websites is WordPress.
WordPress was used to design about 40% of the websites in the world. You can use WordPress and the service of Truehost to design your real estate website today at an affordable price.
A website will help to showcase what you do to people whenever they visit it.
Read also: How to Market Real Estate in Nigeria (And Make Sales)
Conclusion
The real estate business in Nigeria has made many people rich and has made many millionaires in the world.
But having a successful real estate business comes with a price, if you are willing to learn the rope, fall, and get up you will succeed one day.
You should make sure you create a website for your real estate business and don’t forget to buy hosting and domain from Truehost.