For those asking is real estate a good investment in Nigeria, do you know that buying a house to rent out is one of the best ways to succeed in real estate investing.
Looking into an investment portfolio of any successful real estate investors, you’re sure to find a variety of different real estate investments. However, among all these investment types, rental properties will probably be the most common one.
Whether you are a first-time or an experienced real estate investor, investing in rental properties is the best way to succeed in real estate investing. I am sure you will agree with me after going through the below 5 reasons why you should start investing in rental properties.
5 Good Reasons You Should Be Investing in Rental Properties
#1: Lenders Love Rental Properties
Lenders see rental properties as a low-risk real estate investment because of the steady rental income that it provides, which will allow you to cover your mortgage payments.
With the right investment property and location, you will always find tenants because people are always looking for a place to live.
This type of investment is a very profitable one in the long term nowadays that rental properties are booming and prices going up as homeownership rates are going down as a result of high cost of lands and building materials.
#2: Passive Income
Expanding on point number one, having a rental property allows you to enjoy the luxury of earning passive income.
Passive income is when you are making money with little or no work involved, over and over again. You must have put in all the work into buying a land and building a rental house and then go to sleep and be making your money.
Ever heard of the popular saying; landlords grow rich in their sleep without working, risking or economising?
As your cash flow increases from the rental property, you can expand your real estate investment portfolio.
- Find the right location.
- Find the right property that promises the best return on investment, do your background check/search on the property and buy it.
- Start building preparations (building plan, approval, etc), build and furnish.
- Find tenants (with the service of real estate agents).
All of this work is done at the beginning of investment and you can use the service of a Site Manager/Site Engineer to oversee the construction from start to finish in order to reduce the stress of visiting the construction site yourself always. But you need to follow up often so you won’t be cheated and to make sure you get the best and quality work done.
Because every real estate investor is unique and has a different strategy to his/her goals, investing in rental properties have room for varieties.
Rental properties offer varieties for investors that other types of real estate investments do not.
There are many different types of rental properties and your choice will depend on you.
If you want a steady rental income with little or no management, then going for a single family investment property is the way to go. Property like a 4 bedroom duplex in a good location will fetch you 7-figure every year with little or no maintenance at all.
A multi-family property would be ideal for a real estate investor who wants more of a rental income from multiple tenants and wishes to take on the property management. Properties like terraces, blocks of flats, room and parlour self-contain (depending on the area) are hotcake nowadays.
Then there is commercial real estate properties, which are very profitable especially here in Lagos if it is located in a good location.
And then there is land that can be rented out for several purposes. If you have land which you are not ready to use yet, renting it out to businesses will fetch you rental income yearly and will even serve as a way to secure the land from land grabbers.
Investing in rental properties comes with security. You have the feeling of being secure as this type of investment has caused many to retire rich.
Although investing in rental properties may not get a return on investment instantly, you will make money over a long period of time, forever.
This type of real estate investment makes a lot of sense especially to those who have trouble saving money (like me 🙂 ) for the future. Investing in rental properties can be your safety net for retirement.
Successful real estate investors have even achieved financial independence in a few short years by owning and managing multiple rental properties.
#5: No Experience Needed
Just like other real estate investment options, investing in rental properties requires no experience so far you are in the hand of an experienced realtor.
For beginners, reading from real estate books, blogs and various online articles about investing in rental properties could go a long way in arming oneself without enough knowledge, coupled with an informed real estate consultant.
There are several ways to get started in rental properties investment and one sure way is to find a good, genuine and informed realtor who can help you find and locate a very good area for your rental properties with high return on investment. This is why you need me to assist you in becoming a successful real estate investor through rental properties in Lagos. Call or WhatsApp me on 08036129474 for a free consultation.
Other real estate investments bring in active income and a huge one at that but the investor needs to keep working by buying and/or renovating and reselling landed properties. And when these properties are sold, that is it – the real estate investor no longer benefits in any way.
Investing in rental properties give real estate investors a long term passive income which can span from generation to generation.
Becoming a successful real estate investor starts with investing in rental properties. It is the best real estate investment strategy for making money with little effort, experience, and cash on hand. If you’re thinking about starting real estate investing, investing in rental properties is where you need to begin and note that location is very important. Speaking of location, read this article on What are the Best Locations to Buy Land in Lagos?.