Success factors to consider for residential property investment

To invest in any property type, a serious investor should recognize, before committing to a purchase, especially in a market with numerous shades of opportunities, that there will always be some good, many terrible, and other marginal properties.

He is to dig through the marginal and terrible ones towards identifying the great opportunities and this requires asking the right questions, working with trusted professionals and educating yourself through independent research.

There are mainly five locations to consider for investing in a great property. The first consideration is prime location. Ikoyi in Lagos is still one of the most desirable residential locations in Nigeria for the affluent and aspirational class. It will always be an appreciating location as far as real estate prices go.

It is almost an everyday story of someone who bought a property years ago and today the property is worth significantly in excess of what he paid. In prime locations, when the market rebounds, typically, the rate at which prime locations grow exceed other locations exponentially.

In particular, Cooper Road in Ikoyi is still one of the best preserved roads, retaining its old colonial charm and serenity. This gives it an added value over other busy or not so favoured locations even within Ikoyi. This is where Oakwood Residences, a real life residential project, is located and it is a case study on the key success factors that make a good residential investment.

The second factor to consider is if the property is of low price, great value and immediate equity. Buying a property off-plan typically gives an investor an opportunity to buy below the actual market price upon completion. In some cases, developers release an early bird investors pricing to kick start the project, this is usually the time to get the most benefit and room for growth as prices are usually increased as more properties are sold.

Oakwood, for instance, has not yet been launched, and is currently being offered at below average Ikoyi prices, and is discounted further for early bird investors. It has a lot of room for growth- at least 30-40 percent by completion stage. This is a hidden secret for astute investors. It beats having cash depreciating in a savings account or on low yield assets.

An investor should also consider a property’s high rental yield potential. Rent on Oakwood is estimated at N13-15m, amounting to approximately 10-12 percent yield of current early bird and estimated completion prices. Because it’s priced below market price, an investor can charge a sensible rent and get good quality tenants rather than have the property vacant for long periods of time while waiting for an unrealistic rent like most investors who bought over-priced properties. Average rental yields for most investments are approximately 6-8 percent.

Flexible payment plan and low deposits are also factors to consider. Low deposit required to reserve Oakwood Residences gets an investor into the property ladder in a prime location with minimal stress. The ability to pay over the construction period of approximately 18 months makes a huge difference to some investors’ ability to get onto an opportunity.

Investment is usually about sacrificing, and money usually follows vision. Most investors have found from experience that when they commit to an investment, they become more disciplined about their spending, and even become more creative about finding business opportunities to generate the income needed to complete their property investment which they’ve committed to.

The last factor to consider about a property for investment is good title. Good title is the bedrock of any real estate investment. An investor does not buy buy bricks and mortar, but a secure investment that contributes to his wealth creation plan. Peace of mind, a sense of financial security and freedom to live the life of their dreams are some of the reasons people invest in real estate, and a good title is the foundation of all those aspirations.

“At Fine and Country, we stake our brand on this particular factor”, says Maryanne Udo Okonjo, the Chair/CEO of the company, disclosing that Oakwood Residences comes highly recommended and is an excellent investment opportunity for any serious or aspiring investor.

“Whether to live in or to buy to let; for a limited time, on offer at the Residences are a couple of units of 4-bedroom apartments and only 1unit of 5-bedroom Duplex Penthouse in at an early bird investor price with 20 percent discount of the full offer price”, Okonjo says.

CHUKA UROKO