You are probably thinking you are too young to start investing in real estate. Or you think being in your 20s or early 30s, you really don’t need to buy a land or a home of yours.
Well, it shouldn’t come as a surprise to you that eight out of ten millionaires own real estate. This is because they understand that there is passive cash flow from real estate that its appreciation beats any money sitting inside of a bank account.
So today I’ll be changing your thinking after reading this eye-opening article where I will be giving you 5 major reasons why you should start real estate investment at a young age and its benefits to you, your family and even to generations yet unborn.
Why You Need to Invest in Real Estate at a Young Age
1. Capital Appreciation in Real Estate Happens Over Time
Buying a land or a house is a great investment, especially when you are young.
An annual average appreciation for land in Ibeju Lekki area of Lagos is around 60% to 150%. This is so due to the mega projects (government, individual, corporate and international) and developments happening in the axis and there are a large number of people moving here.
Ninety per cent of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined. The wise young man or wage earner of today invests his money in real estate. – Andrew Carnegie
This example is going to give you the comfortability of knowing that your investment is going to appreciate if you hold on to it enough, say 10 to 20 years.
Going more practical, if you invested in a land worth N10 million at Ibeju Lekki axis at the age of 30, with the rate of capital appreciation (60 to 150%) in this axis, how much do you think your investment will worth by the time you clock 40?
This is how great men retire young and rich!
In a worst case scenario, using the least possibility of 60% capital appreciation over a period of 10 years, a land worth N10 million now, will worth N60 million in 10 years from now.
And will worth N120 million in 20 years but the truth is it will worth much more than that!
It is already happening because I have seen a capital appreciation on a land in this axis rose from N8.4m to N16m – that is a whopping 68.42% in a year!
2. Inflow of Ever-Increasing Residual Income
Landlords grow rich in their sleep without working, risking or economising. – John Stuart Mill
It makes a lot of sense when you buy real estate at a young age because it is a great investment vehicle. I mean, who doesn’t want to be called a landlord or a landlady at a young age?
One of the mistakes most young people make is that they don’t look at real estate as an investment vehicle, which is why they don’t buy land.
If you buy a land in a good area and build it for tenement purpose, you can live on the money from rent for the rest of your life. The interesting part of this type of income is, it never comes down but keeps increasing year after year.
3. Return on Investment in Real Estate is Huge
Just as we’ve discussed in point number 1, real estate is the only investment that is solid and profit is sure if done right.
Yes, there are several investment methods like stock and I am not against it because it is a great way of investment as well.
While investing in the stock market can give a return of about 10% or so, real estate investment can do much better.
Though this article is not about differences between real estate and stock investment, however, real estate is capable of reducing your liabilities, building your equity and in case of tenement, gives you passive income.
4. Real Estate Investment is Forced Saving But With Huge Interest
If you are the type that has trouble saving, real estate is a forced savings account because it gives you a way to save for the future while earning high return on your savings investment.
If you buy a land for N1,000,000 now and it appreciates 60% every year, it will worth N1,600,000.
This means that your savings of N1m (as a form investing real estate) has yielded a little bit over half a million for you. So if you are having a saving problem, real estate is going to be the largest item of value you could be proud of.
5. Passive Income from Rental Property
Becoming a landlord is what everyone crave for but becoming a wealthy landlord should be your desire because they are two different things. Investing wisely and in the right way is the difference.
When you invest wisely in landed properties where there are fast developments, then you are going to be a happy and wealthy landlord you desire to be.
This type of investment is one of the best ways to create a type of passive income that will allow you to live without having to ‘work’ hard for money ever again.
Buying a land and building yourself a home is also a way of reducing your expenses and at the same time making money off it.
Always note that whether you plan to rent out the property you buy to tenants, lease it, resell it (land flipping) or build and live in it by yourself, you are still going to thank yourself for starting out young in investing in real estate.
If you don’t own a home, buy one. If you own a home, buy another one. If you own two homes, buy a third. And, lend your relatives the money to buy a home. – John Paulson
And if you are in your forties and fifties, buy more land even if you have one. Although, buying land or properties especially in this part of the world is a tedious and stressful process, there are ways you could do this without fear and stress.
Investing in real estate in Lagos is a great deal, but investing in Ibeju Lekki area of Lagos is a greater deal and a smarter investment move.
Ibeju Lekki real estate is appreciating at between 60 to 150% annually depending on the location and title.
So investing in properties in this part of Lagos state is a wise and smart investment decision you could ever make, especially if you are looking at land banking or real estate investing.
And if you need a professional realtor to talk to about your investment needs, please don’t hesitate to reach out to us. We’d be happy to chat with you and help you in your real estate investment journey, making you a happy landlord with zero stress whether you’re young or old.
