When you purchase rental properties, you take on many responsibilities as a landlord. It is essential that you are actively involved in running and maintaining your property. In the event that things become too overwhelming, you can hire a professional manager, which isn’t free.
Shelter is important as people would either need a place to stay or to do business, i.e houses, shops and offices. Buying or building a residential rental! Which can be a block of apartments or even shared spaces (office) is a good way to get started.
However, this can be more favourable if you are in the right location. When it comes to real estate, location matters most. This is a sure way of reaping profits for as long as possible.
The capital here is the money you will need to build a residential apartment, shops or offices. Looking at the current economic scenario, one would need a minimum of N12million investment to buy land and build for rent.
With investment of N12 million, my findings show that you can gain about N1million or more annually, depending on the location of the buildings.
Managing tenants can be tedious as tenants could potentially cause damage to property or refuse to pay rent.
The major challenge, according to Mr. Lateef Ogunbowale, who owns a two-storey apartment for rent in Lagos and Abeokuta, is that, some tenants fail to honour their rent obligations, saying, some tenants are notorious serial rent defaulters. This, he said, makes it difficult to get rent payment as and when due.
However, he advises intending landlords building for rent, to investigate potential tenants properly to ensure they are responsible and will not become defaulters as time progresses.
He also calls on landlords to hire the service of a lawyer in landlord-tenant transactions, such that, it makes it easier to prosecute defaulters.
The Real estate sector is currently booming in Nigeria and people are making millions in it, irrespective of the economic downturn, it can be seen as a real money-spinner.
Investing in rental properties is an age-old practice as is land ownership. You purchase a property and then rent it out to tenants. As the landlord, you are responsible for paying the costs of maintaining the property.
Rental properties can be a lucrative business for those with do-it-yourself (DIY) and renovation skills, and who are patient enough to manage tenants. Although this strategy does not require significant capital, it does require substantial funds to cover the maintenance costs and to cover vacant months.