Property As Investment
By C. Udechukwu
Property as investment remains the world’s surest means of wealth accumulation. Studies have shown that in the generations past, as well as in this our generation, real estate has continued to be the underlying source of sustained growth of wealth by individuals, families and corporations.
And I dare say that this trend will continue for a long time to come, if not perpetually.
Raw land in particular, has been the millionaire maker of the past and continue to make waves as an investment.
Multimillions of respective countries’ currencies have been made through the purchase of vacant land, held for some time and off loaded.
Some wealthiest families we know today have made their fortunes from large expans of cheap land they purchased or obtained one of many ways possible.
There are also those who have profited immensely by buying farmland that skyrocketed in value as towns grew and development reach such locations.
There are many instances on record today where the natural growth of cities into rural areas and demographic shifts have resulted in land sold for #100,000 per acre in recent past now goes for #10,000,000 per acre or more.
This kind of opportunity is still possible today in Nigeria. However, there is need for caution here.
In the past what I highlighted earlier was much easier and also safer. Today, investing in raw land and property can be much more risky.
Today there are many controls, including the land use decree, which govern the use of a land and ultimately affect its value.
In any case, there are six factors that influenced and continue to influence the selection of raw land which has likelihood for impressive appreciation potential.
As a savvy investor, you should look out for these signs:
– Growing population – they will need land for their homes and businesses.
– Decline in supply of land available for development – this makes land a seller’s market.
– Improved infrastructure, making growth easier – this encourages a rush for private development, resulting in scramble for land.
– Political and environmental pressures limiting and shaping growth patterns
– Increased savvy for land owners and investors.
– Increased spending power, building top-end buyers.
Studies show that these factors work hand in hand. Some of them provide positive pointers to the appreciation of land, while others tend to redirect the attention to other areas.
Generally, when any of these indicators are present, property in the path of outward growth from any city will increase in value.
Proper timing of the investment is also of great importance.
An investor should carefully watch and follow the trends in other to properly time his investment- when to invest and when to off load the investment for greatest net profit.
I had a personal experience in what I have just said. It was a rude eye opener to me.
I had acquired many acres of land from some villagers in a Lagos suburb, by rendering of professional service to the community.
Not realising what a Gold Mine I got, and possibly also, because I was in a hurry to convert it to cash, I sold much of the land to the first bidder at a ridiculous low price.
Only few days later, the person I sold to resold the same land at x5 of the amount I sold it to him.
I realised I had lost a great profit to my naivity! That was then. I know better now. I learnt an unforgetable bitter lesson which opened my eyes.
My subsequent investments on land have increasingly been more profitable.
New investors who team up with me every now and then for one property deal or the other have equally greatly profited from that my singular experience.
I can now boldly declare that profitability or otherwise of land/property depends on being at the right place at the right or wrong time. On the whole, property, unequivocally, remains a gold mine.
Consider it!!!
