by
Patrick Ogungbola
MD/ CEO, BLUEHEDGE REALTORS
Hmmm… This is August 2020!!!
We welcome you to another brand new month. It seems everything is in fast forward mode, July 1st was just like yesterday; lo and behold, the month of August has started again. Atimes, I just wish it’s possible to ‘pause’ the time for a moment, most especially during the ‘sleeping times’, ‘break times’ and ‘holiday/ enjoyment times’, but nah it’s not just possible – all these also form part of our ‘lifetime’.
Interestingly too, the period of global lockdown caused by COVID-19 (when most of us were locked indoor) was also part of our lifetime, and sad enough, some countries are still on total lockdown, while it’s been eased in some other climes.
The above notwithstanding, life goes on! My people have a saying, which goes thus: ‘B’aoku ise otan’ which literally means that ‘as long as we are alive, we must keep working’; it also mean ‘where there is life, there is hope’. Indeed, ‘a living dog is better than a dead lion’ (Ecclesiastes 9:4).
So, what should we learn from this? The need to brace up and never give up, the need to continue to strive and hope for a better tomorrow as long as we’re still breathing. As a matter of fact, every living being should have the three most important virtues of faith, hope and love. These are what give meaning to life, and also connect us to divinity.
Now, let’s go straight to the subject of today, which is also related to the importance of taking appropriate action while we still have the time. There is indeed time for everything under heaven; there are certain things we can never do again at this stage of our life. For many people reading this article, you can never enroll in professional sports again for life, as many of us have already exceeded the age of enrollment. Imagine a man of 45 years of age who is planning to enroll as a professional boxer or wrestler, you already know his end, a punch may reduce him to spare parts. This is why we need to make hay while the sun shines, we don’t have all the time in the world, opportunity once missed may never be regained.
As professional Estate Surveyors and Valuers, we were not trained or taught to be desperate and aggressive in the marketing of our services and products, and this is why we rarely write promotional articles or adverts about such; although things are fast changing in this era of digital marketing. I used to have a firm believe that you don’t need to cajole or talk someone into taking advantage of seemingly obvious real estate opportunities. But this belief is also changing as we have come across so many clients, who have money to invest, but still they need a little push, or should we call it conviction on why they should invest or buy properties.
There are several reasons why you need to take owning real estate (properties) more seriously, and these reasons cut across physical, financial, emotional, spiritual/ religious, institutional, and so on. All the reasons for property ownership are positive, they are usually to the benefit of the owners; you can never be wrong to own properties.
Following the above, please find below 10 reasons why you should seriously and immediately consider owning properties:
· You enjoy physical and emotional satisfaction. Real estate is both tangible (Brick and mortar) and intangible (interests and rights). In the words of Troy Harris, ‘Property is one of the few investments which you can actually see and feel, and this often makes it feel more real. You can’t take your friends for a drive on a sunny day past your share portfolio’. This is funny and at the same time, very deep.
Real estate also satisfy emotional needs. There’s a kind of confidence and feeling of superiority and contentment you have when you own real estate. You can only understand such feeling if you own properties, and you can also understand it in a way if you are a tenant – the kind of feeling your Landlord has when he’s coming to ask for his rent.
· You enjoy security of capital, as well as capital appreciation. Security of capital is one of the inherent attributes of real estate. This means that the original capital you invested is secured (untouched). For instance, if you bought a property for N50million last month, and you want to resell today, the market value, all things being equal can’t be less than the purchase price, but should be higher. Another interesting benefit of property ownership is capital appreciation – the capital growth can be phenomenal. Our parents and other ‘privileged’ elders will always tell us when land were being sold at Ikoyi and Lekki Phase One both in Lagos for less than N100,000 about 20 to 30 years ago, whereas today, you need millions and billions of naira to purchase such land. Can you estimate the rate of capital appreciation in this case?
· You also enjoy security and regularity of income. People also own properties for investment purpose, that is, to get predictable cash flow through passive income (rent). For instance, if you own a block of 6 units of 3 bedroom flats at Agungi, Lekki, Lagos or at Wuye District, Abuja, FCT, you are assured of N2million per annum per flat, and this translates to N12million per annum for the 6 units. I know many Landlords who have sponsored their children’s education either in Nigeria or abroad from the rental income of their properties. There’s a caveat here however, to be able to adequately plan on the proceeds of rental income, it is advisable to engage an experienced and capable Property Management company to manage your rental properties. If you have not experienced ‘bad and rent defaulting tenants’, you may not appreciate this advice. At Bluehedge Realtors, we have a well-structured and organized Property and Facility Management Departments in all our branches at Lagos, Abuja, Port Harcourt and Uyo, Akwa Ibom State. You can talk to us today in this regard.
· Hedge against inflation. Real estate also provides an excellent hedge against inflation. Rents usually increase with inflation, while mortgage payments on the property remain stable. This increases cash flow, without increasing the expense of holding the property. In other words, as economies expand, the demand for real estate drives rents higher. This, in turn, translates into higher capital values. Therefore, real estate tends to maintain the buying power of capital by passing some of the inflationary pressure on to tenants and by incorporating some of the inflationary pressure in the form of capital appreciation. This attribute of real estate made it a very good store of wealth. No wonder Billionaire Andrew Carnegie said that, ‘90% of millionaires got their wealth by investing in real estate’ and Peter Hernandez (President of the Western Region at Douglas Elliman) also said, ‘Most millionaires I know made more money from owning real estate than any other investment. Real estate consistently increases in value over time and outperforms other investments’.
· You enjoy diversification with real estate. Real estate is always a great investment because you have more options than with other types of investments. If you invest in stocks, bonds, or a private offering, your options are limited to holding, buying and selling. With real estate, you have unlimited options.
You can diversify based on location (geographical diversification – Lagos market, Abuja market, Port Harcourt market, Uyo market, Ibadan market, London market, South Africa market, New York market, etc.) and physical classification or use (Residential use – apartments, maisonettes, terrace house, detached and semi-detached houses, Commercial use – shops, offices, hotels/ guest houses, filling stations, Agricultural use- farmland, ranches, Recreational Centres – Playgrounds, Tourism centres, etc).
In addition, you can also buy or build a house with the intent of flipping or letting or short-letting (popularly referred to as ‘airbnb’). If the property appreciates in value significantly, you can resell it. Real estate is always a ‘win-win’. In addition, a property can be refinanced, renovated, redesigned and rebuilt to something else. If it is a vacant land, you can develop it, lease it, subdivide it, or add parcels to it. These are just a few of your options. This flexibility is one of the reasons it has created more millionaires than any other asset class (Daniel Lesniak, founder of Orange Line Living).
· You enjoy absolute control and certainty: With real estate, you have 100% control of your properties, unlike in the stock market where the value of any shareholding is dependent on market conditions and the actions of the people running that company, and this introduces an element of uncertainty. This is not the case with real estate; once you’ve closed the deal, you directly own the asset and you have complete control over it. This is a very powerful thing as it means that you can influence both asset worth (by adding certain features) and cash flow (by raising the rent) directly – something that’s almost impossible to do with shares in a company.
Also, unlike the stock market, where many factors are out of your control, your investment can’t disappear overnight in real estate. You can also build your wealth with excellent rate of return and tax advantages.
· Real estate is less volatile. Real estate is a more stable investment, unlike the stock and forex market. The return in real estate is not sporadic; it is sure and consistent. The property market is less volatile than the stock market, at least partly due to the effort required in order to purchase a property – in terms of due diligence, legal checks, inspections, length of settlement periods and so on. This means that property is less prone to short-term speculation like paper asset classes. These, including the amount of time it will take to liquidate a property asset also reduces market volatility significantly.
Also, a professional real estate expert, Cherie Barber also said “Properties in well located areas, underpinned by good supply and demand, rarely crash overnight or even over extended periods of time. They hold their value or at least level off and rarely experience major falls”.
· You enjoy freedom and peace of mind. Imagine a situation whereby you don’t have to worry about money or be desperate for anything. Real estate can achieve this for you. Also, imagine a scenario whereby two men working in the same company lose their job. The first man lives in his own house, while the other man resides in a rented apartment. Out of these two, who do you think will maintain some level of sanity to think and plan on the next strategy after the job loss? The answer is obvious – the man that lives in his own house, as the other man will be full of anxiety, uncertainty and confusion because he knows that he must pay rent in few months’ time or he stands the risk of being ejected with his family.
As earlier said, there’s a kind of joy, inner peace and a sense of accomplishment that comes with property ownership. Interestingly, money can buy you a property, but it can’t buy you this kind of inner joy and peace that a home gives you. You also enjoy freedom to do whatever you want with the house. There are many restrictive clauses in a typical tenancy agreement since the house was ‘borrowed’ to use by the Tenant, but as a property owner, you’re at liberty to do whatever you want to your property.
· Legacy (Real estate can be passed down to generations by inheritance). ‘A good man leaves an inheritance to his children’s children’ (Proverbs 13:22). When thinking long-term for your investment, you don’t just have to think of only yourself and your immediate family – you also have to think about your grand-children, this is a good advice from the wisest man that ever lived (King Solomon) – referring to the above quote. Depending on the legal structure in which you own your properties, you can pass your investments onto your children either before or after you pass away. In this wise, real estate is a better asset that can be passed down to your unborn generations as against shares in some companies which can suddenly become valueless after few years due to bankruptcy or liquidation. Many companies that were listed on the Nigeria Stock Exchange about 10 years ago have either been delisted or valueless, whereas, a property will not just retain, but increase in value. All the already mentioned reasons make real estate a very ideal asset for inheritance.
· Improved social status and prestige: No doubt, property ownership, most especially in the choicest parts of the city improves ones social status and prestige. If you can achieve this, you will be respected in your family and in the society. You will agree with us that it is more prestigious and pleasing to be called ‘Oga Landlord’ than ‘Oga Tenant’. This emotional reason has caused some people to strive to own their own homes for the singular reason of ill-treatment from their ‘former Landlords’. Don’t get too comfortable as a Tenant; paying rent for 20 years in a rented accommodation cannot make you the house owner, however, paying mortgage for such number of years could buy you a house. Home ownership gives you and your family a sense of stability, security and prestige. Be wise!
The above points are not exhaustive, we have only made an attempt to make you see reasons to seriously begin to consider real estate investment. Once again, you can never be wrong owning properties. In climbing the property ladder, the earlier one starts, the better; but at the same time, it’s better late than never. A wise person once said, ‘strive to do what your age mates are doing’ – When your age mates are getting married, do likewise; when they are buying or building properties, strive to do likewise. As we pointed out in the introduction of this article, there are certain things that we won’t be able to do again when we pass certain age, and ‘had I known’ is not a statement of the wise.
We can still correct the wrongs of the past by taking decisive actions today towards property ownership. You can never have enough properties. If you own 5 properties and you feel that you’ve arrived, remember, some people own estates.
We, at Bluehedge Realtors can assist you in a number of ways to achieve your real estate dreams and goals, talk to us today, we’re just a phone call away (+2348177766110-5).
We wish you the very best in the month of August.
As usual, we want to remind you that we care so much about you, and that when it comes to your real estate investment and advisory, we are always here to give you the very best service you can never get elsewhere. This is our promise, and will always be.
Meanwhile, please find below the powerpoint presentations of our current properties for sale in Lagos, Abuja and Port Harcourt, Nigeria.
Thank you.
Affordable Properties for sale in LAGOS, Nigeria
Affordable Properties for sale in ABUJA, FCT, Nigeria
Affordable Properties for sale in PORT HARCOURT, RIVERS STATE, Nigeria
