How To Start A Real Estate Business in Nigeria

How To Start A Real Estate Business in Nigeria

Do you want to start a real estate business in Nigeria? If yes, then be rest assured that the interest rate in Nigeria is high. It has been observed that there are a lot of opportunities in this sector.

Even though you can only get so much money from just one deal, but it will earn you high returns as long as you know what you are doing.

It is no longer news that many people in Nigeria and other parts of the world are now seeking real estate business because of its huge profit or returns. Starting a real estate business is not as easy as it looks but with the right information, dedication and commitment is possible.

Our website can be of great help to you by providing you with necessary information and guidelines on how to start real estate business in Nigeria, but first, what is real estate?

What is Real Estate?

Real estate is a term that refers to physical land, buildings and the air rights above the land and the underground rights below it.

Real estate is bought and sold either through a licensed real estate agent or directly by the owner. It is a major sector of the economy of many countries, as well as a significant source of tax revenue in most developed nations.

Real estate is also known as real property (sometimes also called realty) or immovable property (to distinguish it from personal or movable property).

Real estate generally consists of five categories:

Residential (single-family house, condominiums, apartments), commercial (office buildings, hotels, shopping malls), industrial (factories, warehouses), agricultural (farms, ranches) and special purpose properties (hospitals, schools, railroad yards).

How To Start A Real Estate Business in Nigeria

Have a strategic business plan

Most real estate entrepreneurs fail because they don’t have a strategic business plan for their business. A strategic business plan can help you set your goals and achieve them. It will also help you track your progress and stay on the course of achieving your business goals.

A strategic business plan will also help you raise money to start your real estate business in Nigeria, and it will save you a lot of headaches down the road.

If you want to enter into any type of investment, you need to have a strategic plan for your investments. The same applies to real estate investments in Nigeria. You need an effective real estate investment business plan that outlines the steps you’ll take if you want to be a success in real estate investing in Nigeria.

Legally register the business

The first step is to legally register the business. You can start a sole proprietorship where you are the only owner or you can go into partnership with a few people who are involved in the real estate business.

You also have to register your real estate business with Corporate Affairs Commission (CAC) which falls under the Federal Ministry of Trade and Investment. The registration gives your business a legal entity.

After registering your business, you have to obtain a tax clearance certificate from Federal Inland Revenue Service (FIRS). You cannot get this certificate without firstly getting your Tax Identification Number (TIN) which is also obtained from FIRS. So it is advisable to do both at once.

The next thing you have to do is to get an operating license from Lagos State Ministry of Physical Planning and Urban Development. This will enable you carry out your business in Lagos state.

The first step is to legally register the business. You can start a sole proprietorship where you are the only owner or you can go into partnership with a few people who are involved in the real estate business.

You also have to register your real estate business with the Corporate Affairs Commission (CAC) which falls under the Federal Ministry of Trade and Investment. The registration gives your business a legal entity.

After registering your business, you have to obtain a tax clearance certificate from Federal Inland Revenue Service (FIRS). You cannot get this certificate without first getting your Tax Identification Number (TIN) which is also obtained from FIRS. So it is advisable to do both at once.

The next thing you have to do is to get an operating license from the Ministry of Physical Planning and Urban Development. This will enable you to carry out your business comfortably without any hindrance.

Raise the required capital to start

The real estate business is a lucrative venture, especially if you venture into it with the right amount of capital. It is a good idea to find out the reasons why people who have ventured into the business failed.

A lot of people have ventured into the real estate business in Nigeria but have failed. This is because they ventured into the business with little or no knowledge of the market, and with very little capital.

To start a successful real estate business in Nigeria, you need to raise the required capital from whatever source you can lay your hands on. You can even approach a bank for a loan if you are sure that you will be able to pay back at the end of the day.

Another thing that would make you fail in this business is when you do not know how to run a real estate agency. This is because there are lots of properties for sale or for lease in Nigeria, and investing in all these properties would be very costly even if you eventually invest in some of them, it might be difficult for you to sell them off within a short period that would enable you get back your capital and make a profit as well.

Get Started & Get Working

The final step in starting a real estate holding company is execution. Implement everything you have developed in your business plan. Many Nigerian businesses fail as a result of a very poor execution. Execution includes your daily activities in the company. This involves business deals, marketing, networking, customer orientation, human resources etc.

Starting a real estate business is not for the faint of heart. So, to be successful in the real estate business, you must be willing to face difficulties. Personally and as an entrepreneur, nurture your ambition and become a goal-oriented and organized person. Remember that real estate is not about quick success. Rather, it’s a long game that requires a lot of patience.

Conclusion

On the other hand, one can invest in Bricks and mortar which means you have to have a huge capital to start with in order to purchase properties close to major roads for your sales. The advantage of this real estate business is truly having to write it on your own name and enjoy it later on.

This means that you are given an opportunity to get some good return after some years of staying into the property sales business. Indeed, Nigeria offers affordable housing as compared to other countries in the world but as a matter of fact, this is not really cheap at all due to the rampant inflation in the country.