Tips on how to start a Real Estate Business in Nigeria
Real Estate Business is one of the most profitable business that anyone can do; in fact, it is a business that top our list of lucrative business ideas in Nigeria. To some, they go into this type of business as an investor while others will actually start a real estate business as an agent. All in all, everyone is looking for successful business to be involved in. Therefore, let us look into the question of “how to start real estate business in Nigeria”.
For the purpose of this particular article, we will concentrate on the real estate agent side of the business. If you are interested in the investment side of the property business, read more on it at “Real Estate Investment Opportunities in Nigeria”.
Are you looking to start a real estate business? Either as an agent or as a developer? If yes, then let me take you into the world of successful real estate business in Nigeria.
Before diving into the nitty gritty of our topic, let’s go through most questions people asked; these are:
What is Real Estate Business?
Real Estate Business is a profession of buying, renting out or selling of properties such as land, homes, buildings and apartments for commercial or personal use.
Therefore, anyone involved in any of the profession listed within the definition is in a the real estate business.
How successful is real estate business?
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.
How to Start Real Estate in Nigeria as a Profitable Business
Real estate is a business opportunity that has been in existence for years and still is; a business that can turn the table of prosperity in your favour. In fact, it is a game changer when it comes to profitable untapped businesses in Nigeria.
Uniquely, property business in the country has done far better than most other business. Why is this? Well…. simply because real estate projects springing up everywhere can not cater for what is needed in the country. Although, there are many luxurious places to live in Lagos and other states in the country; there are still shortage of good accommodation for the masses.
PricewaterhouseCoopers (PwC), in a document called: REAL ESTATE – Building future of Africa made mentioned that there is a shortfall of 17 million housing units in Nigeria.
So what does this article tells us? In short, it simply means that there are numerous opportunity in the Nigeria real estate market.
How to build a successful Real Estate Business in Nigeria
First thing to remember, success in real estate does not just come overnight; it require hard-work and dedication.
For the purpose of this article, here are the important steps needed to operate a successful real estate business in Nigeria. That is to say, the following are real estate business tips.
- Decide on the type of real estate business sector you want to get into
- Get the necessary government license required
- Knowledge is power, educate yourself
- Develop a business plan
- Create a real estate marketing strategy
- Embrace technology – Create a website to showcase your property
- Budgeting play an important role – Create a realistic budget
- Network with others in the same industry
- Advertise in the industry advertising platform
- Develop customer loyalty
Now, let us take each of the above one after the other.
1. Types 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. You personal decision on the “HOW” and “WHAT” side of the business sector determine your success rate. Meanwhile, for the purpose of this article we will concentrate on the subject of the day; that is “Tips on how to start a Real Estate Business in Nigeria“.
In the real sense of the business, vast majority of real estate professional – agents and brokers works in four main types of real estate businesses.
- Landed Properties;
- Residential Properties;
- Commercial Property; and
- Industrial Real Estate
Their main involvements include either renting these properties out, or selling them or both.
This comes in the for of you buying a piece of land and selling that same piece of lands at a higher rate to make profit. Vacant lands in some areas are more expensive than other areas; for example, a plot of land in some choice area in Ikoyi area of Lagos State is more expensive than that of Akowonjo area of Ikeja.
So for an estate agent, the commission he will pocket for selling the Ikoyi plot of land will be more than the commission he will receive for helping to sell the Akowonjo plot of land.
Similarly, an agent will make more in sale when it comes to selling lands located in commercial areas than those located in non-commercial areas in the country. Although, there may be some kind of exceptions in some areas. This all depend on the area where the land is.
In my experience with real estate business in Nigeria and all around the world, residential property real estate business always deliver the most stable income; both for property business owner (real estate agent) and real estate investor.
Why is this?
Simple because no matter what the economy situation of the country (recession or no recession), people always need a place to live. Not only does this type of real estate business 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.
Although, we do have some unregistered estate agents in Nigeria parading themselves in this sector like any other sectors in the country. My advice is for individual looking to transact business to check thorough the license of such estate agent before doing business with them.
To check the legitimacy of an agent, please visit the database of Licensed Real Estate Agents(Lagos State ONLY).
By and large, this is the most profitable property investment type of all time; either for estate estate agents or investors. This is simple because, one deal done will cover for any period of the property being dormant.
For the purpose of those individuals looking to state a real estate business, it is worth mentioning that – the commercial property aspect of the business can be divided into three different categories namely:
- Office Property;
- Retail Property; and
- Industrial Property
The only disadvantage in commercial property to estate agent is that the property may be empty for months.
2. Get the necessary government license required
As mentioned above, there are some unlicensed agents in the industry. For you to run a successful real estate agency business in the country, you will need to get the appropriate licenses for the business you are conducting. This gives you an edge over unlicensed estate agents.
More information on getting the appropriate license to operate as a real agent in Nigeria, visit the Estate Rent And Commission Agent Association Of Nigeria website.
3. Knowledge is power, educate yourself on Real Estate Business
Although, in Nigeria, you need not to 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.
Until now, many people or organizations interested in this sector get their training from post-secondary institution; that is to say, from tertiary institutions across the country. They either get the qualification in quantity surveying or estate management degree. This has been the norm in the Nigeria real estate sector.
At the present time, things have changed. You can get trained to run a successful real estate business by taking various course on the subject matter. In fact, you can even register with any of the accredited property training institutions in the country.
Real Estate Training Courses in Nigeria
You can get trained in any of the property management training below.
- 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.
4. Develop a business plan
Like any other business startup, you will require a good business plan. A business plan that will suite the purpose of the business. Remember, your business plan is a living document; that is to say, 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 your business grows. For example, your initial business plan may give special consideration to cold calling as a way of marketing your business but as other marketing strategy evolves, you will need to go and re-evaluate your business plan.
On the positive side, as you discover more about the business you will your initial business plan grow to accommodate the changes. A relatively good real estate business software will assist you in maintaining your business plan.
For those looking to develop a good real estate business plan, Bplans has more than enough resources that can help you. you can take a look at them.
5. Create a real estate marketing strategy
Just like any successful business, a good real estate company or agent need to have a strong marketing strategy. This marketing strategy need to focus on every aspect of the business that will bring in clients.
As an estate agent in Nigeria (existing or new to the business) you will need to perfect your marketing strategy in other to excel in the business. 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 option may include the use of social media marketing strategy or Search engine optimization (SEO) strategy. The choice is your; you may also look to engage social media marketing companies or SEO companies in Nigeria like Truviamedia.com
The offline marketing strategy you may want to use as an estate agent in Nigeria is to employ the services of sales agents for your business. In addition to the use of sales agents, you may try the multi-level marketing strategy that has worked for many real estate agents.
6. Embrace technology – Create a website to showcase your property
As a good real estate business owner, you will need to embrace technology to move your company in the right direction. Not only do you have to take advantages of all it brings, but also make technology work for you.
After reading the above, you need to ask yourself………..
Is real estate a good investment?
Yes, it is a good investment.
Real estate business is one of the best investment that yield good returns over time; In other words, the return on investment (ROI) is high over time. As a matter of fact, it was listed as one of the best business investment opportunities creator of all time.