Before we discuss the advantages of investing in off-plan properties in Nigeria, I’d like to explain what the term “off-plan property purchase” really means.
What is Off-Plan Property Purchase?
The term ‘off-plan property purchase’ simply means buying an apartment or property in advance of its completion, that is you’re buying into the concept and design of the property development with the idea that the project execution process would be favorable and meet your expectations on the long run.
For most investors, purchasing an off-plan luxury property might be a turn-off due to the fact that they tend to doubt the authenticity of the developers in terms of delivery and sizes of each housing unit. Most investors feel this way mainly because of the fear of failure that arises when investing in property in Nigeria. However, this isn’t supposed to be an issue because you have the opportunity to carry out your housing measurement and inspections before you go ahead to transact with the developer or the company in charge.
Usually in Nigeria, a deposit of just 10-20% of the initial property value is required to secure an off-plan property. If you then occupy the property, you may choose your preferred fixtures, designs, fittings, finishing of the property.
There are several advantages of buying and investing in off-plan property in Nigeria, and as a result, this form of real estate investment has become a favored option for most real estate investors across the country. However, there are few things you need to consider before you invest in any off-plan property in Nigeria. Some of which includes the benefits, the risk, and the process involved.
Advantages of investing in off-plan properties in Nigeria
1. Market Value
One of the major reasons why developers sell off-plan properties in Nigeria is that they want off-takers, they need money to push the project and they just push out some units to sell off-plan, so they offer the units to you intentionally at a cost below market value. Most of the time, the developers wants to demonstrate a certain level of sales before marketing the development so they try to sell as many units as possible before the property completion, you can always take advantage of this as a real estate investor.
2. High Return of Investment (ROI)
When you buy an off-plan property, you buy at the current market value for a property that would be ready in a year or two. And before the completion of the property, your ROI would have skyrocketed; you would have made a huge return on your investment within the span of a year or 18months of the property construction. For instance, if you purchased an off-plan property in 2022, that means you’d secured the property for the current market price as at that year, and by the year 2023 the price of the property might be double the price of 2022, as we all know real estate investment is highly lucrative, which means you’d be enjoying a huge return on the investment you made in 2022 within a span of a year or 18 months.
3. Payment Convenience
When you intend to purchase an off-plan property in Nigeria, the developers would usually offer you a payment plan that’d be very convenient for you. If you’re a salary earner, you really need to consider buying an off-plan property as you’d be able to pay conveniently anytime you get paid. For instance, it may be difficult for you to deposit 100million Naira at once for a property but you may have the ability to deposit 10million Naira every month for a year or 5million Naira for 2 years. With that you can lock down the property, this alone is enough motivation to drive you to continue paying for the unit till you complete the payment for the property. This really helps to lower the burden; you may just have to pay 40% to 50% of the total price in installments before the whole property is completed.
4. Personification and Design Tweaking
When you buy a property that is already completed and you’re not satisfied with the designs or structural layout, you may not have many options in tweaking the designs and it may cost you so much money and hassle. Changing the AC positions, Switches, scraping the paintings, changing the POP, and the likes may cost you so much time and money. Besides, personalizing and tweaking the designs of a completed property may meet your taste to a large extent, but it may not fit perfectly. However, when you purchase an off-plan property, you’ll be presented with the floor plan, with that you can always work with the developers to personalize and tweak the designs before it’s even built, as long as the modifications or tweaking doesn’t affect any structural element in the building. So what you get on the long run is what you desire, you can even tell them the type of tiles or kitchen that you want. Only an off-plan property offers you the luxury of choosing and customizing most aspects of your unit to get your desired results.
Another major advantage of investing in off-plan properties in Nigeria is Flexibility; Flexibility helps you plan your life confidently without any pressure whatsoever. Let’s take a retirement plan for instance, if you plan on retiring in a couple of years, then you can start buying your retirement home today, go through your last year’s stress-free and move into your own home immediately just after it is completed.
Making Money Investing in Off –Plan Properties in Nigeria
When you invest in an off-plan property that is located in an area with a high level of infrastructure, such as express roads, malls or new university, you can always flip the property before completion as it would be typically deemed attractive.
For instance, if you buy an off-plan property of 70million Naira, with you making an initial deposit of say 7million Naira, which is (10%). As demand increases, months down the line, and the property prices in the neighborhood rise by 5%, meaning the house that is still under construction will now be worth 73.5million Naira upon completion. In fact, you may be able to find a buyer looking for a home to live in or an investor willing to buy the off-plan property off your hands.
In conclusion, it is very important for you to understand the whole processes involved before deciding to invest in any off-plan properties in Nigeria. It is best to work with reputable real estate agents that have access to a wide network of contacts that can bring you the best developer deals possible without any stress or hassle.
Author: Gbemisola Ojerinde Esq.