Binnabook Magazine: Real Estate


Showing posts with label Real Estate. Show all posts
Showing posts with label Real Estate. Show all posts

Five Abundant Opportunities in Real Estate Business in Nigeria

 If there is any business in Nigeria that is truly lucrative and extremely profitable, it has to be Real Estate business in Nigeria. Most of the top billionaires in Nigeria are real estate investors. The business is a money making ventures .

 Real Estate is currently booming in Nigeria and people are making millions in it. Today, we want to take a closer look at the business and see how you can invest in this sector of the economy  and make serious profit.

One thing very good about real estate business in Nigeria is that the investment opportunity is so diverse that there seem to be something for everyone. Anyone who wish to invest can invest whether he has thousands or billions of naira, you can even invest without a dime in your pocket. Let us see how it works.

Benefit and Profit Potential in Real Estate Business.

Before I proceed  with this discussion, I want us to look at the profit potential of Real Estate Business in Nigeria.

In 2017 I bought a plot of Land in Owerri Egbu Road which I intended to start up a small Hotel Business, I paid ₦500,000 for the land excluding Agent fees and Land Survey.

In 2020, I changed my mind and decided to sell it. When I asked the estate agents how much property was going in that area, they told me the current price as at then was three million naira. And that my own which is very close to the main road will go for between 4 to 5 million naira. If I had bought more plots that was offered to me for ₦500,000 each, I would have made millionaires of Naira from that single Deal.

A novice like me that don't know much about the Real Estate business made about 4.5milllion Naira in a single deals, for a land that has just stayed about 2 and half years under my custody. Then imagine what the professionals who knows the ins and outs in the business must be making. 

I know how some of the millionaires in the industry started. Some of them started as small real estate agents in a kiosk. Today, they control the finest estates in Lagos, Abuja and other major cities in Nigeria.

Investment Opportunities in Real Estate

Investment opportunities abounds in Real Estate. Start with what you have. As you grow in the business, you can expand your portfolio. Or you can start big straight away if you have access to capital. In this article, I will only deal with real estate categories that are peculiar to Nigeria. 

Here are some of the areas you can invest and make your own money without tears.

1. Land Flipping

This means buying of land and quickly reselling it for profit. This is one of the smartest investment in the industry and requires no effort whatsoever. Just your money and knowledge and you are good to go. You will need substantial amount if you want to make hundreds of millions but you can start small by buying just one plot and grow to buying tens of plots and acres of lands and keep selling all year round.

2. Open Space Leasing

This works in a simple and unique way. Buy a property in a good location and lease it out for makeshift use. You can lease it to churches or business that wants to develop a makeshift outlet such as car wash and mechanics. They will be paying you monthly rentage while the property still appreciates for future sell. It is like borrowing money for someone and get paid double interest and still get your money back.

3. Real Estate Agency

This one is the simplest and easiest of them all. It is not investment per say but service rendering. How it works? Go round and look for properties to let and for sale, advertise your service and help secure clients for the property owners, you will be paid percentage as commission base on the amount the property is sold or rented. You can start with little or no money and if you are smart enough, you will grow to become a giant realtor.

4. Property Development

This is where the big guys in the industry are doing their stuffs. They acquire properties in nice locations, develop it into luxury apartments, commercial structures, etc and sell at a very high profit margin. If you spend N200 million to develop a property, be sure you are going to sell for N400million.

5. House/Office Rent

Build a house and put it up for rent, get paid all year for a life time. And the Property still appreciate in Values with time .

Above are few of the opportunities that are Abundant in Real Estate. You can apply them and change your life entirely .

Real Estate Business is a big Business and it never dies with time 

Google is building a whole new town for its workers

 Google has announced plans to build an entirely new campus for its workers in Mountain View, California.

Middlefield Park, as the area has been named, will span 40 acres of land and include every amenity one might expect from a small town - including homes, offices, shops, parks and sports fields.

Despite Google having recently informed employees they will work from home at least until mid-2021, the new village will boast 1.33 million square feet of office space and as many as 1,850 housing units.


30,000 square feet will also be dedicated to retail, 20,000 to civic and event space, and 12 acres set aside for green areas.

New Google campus

The philosophy behind the new Google campus - that proximity to work makes for happier living - appears to contradict lessons learnt from the rise of remote working, which suggest collaboration and productivity are not contingent on physical presence.

Along with fellow technology giant Amazon, however, Google appears to have placed a significant bet on the long-term future of the office.

“[We want to] create a mixed-use neighborhood where a lot of the needs and services are within walking distance from where you live and work,” Michael Tymoff, Real Estate Director at Google, told the Mountain View Voice.

However, not only Google employees will live on the newly built campus; a portion of the new housing will be set aside for other San Franciscans and many of the campus facilities will be accessible to the public too.

The project will go some way to fulfilling the company’s billion-dollar commitment to building 20,000 new San Francisco homes, designed to alleviate tensions in the region over the effects of Silicon Valley giants on real estate prices.

The company is aiming to dedicate 20% of the new campus’ residential capacity to affordable housing (equating to roughly 350 units), building on progress made by another similar pending project in San Jose.

“We really see [Middlefield Park] as another step forward with our housing commitment,” added Tymoff.

The Mountain View project is still in its infant stages, however, with some buildings yet to be designed. It is unclear how long it will take to bring Middlefield Park to fruition.

\Source: Techradar

Ghana: James Town to Get Gh¢1.8 Million Ultra-Modern Edifice

The Nii Arde Nkpa family of Plerno-James Town has cut sod for the construction of a GH¢1.8 million three story ultra-modern edifice in James Town in Accra.

The 24 room apartment facility will also host offices and conference facilities in the building.

The multi-million Ghana Cedis facility will also boast of spacious parking spaces, Internet facilities, security outpost, a standby generator and other features that make business convenient.

In an address at the sod cutting ceremony, the Head of the Nii Arde Nkpa Family, Daniel Nii Arde Tagoe said the Nii Arde Nkpa family who were allodia owners of Kokrobite, Langma and Tuba lands in Accra, saw the need to put up the edifice to serve many other purposes besides providing accommodation as a family house.

He said the facility would be a permanent residence for the chief and the head of family as well as family members both home and abroad.

Mr Tagoe urged the youth of James Town to be circumspect in all their actions in order to sustain the family name and maintain the respect it had gained over the years and reminded them of their positions as future leaders of the country.

"We should make it a point to send our children to school to the highest levels since that is the only perfect gift and legacy we can leave for our children," he said.

According to him, the facility which would also serve as an office will afford the youth and people of James Town the opportunity to walk in with their concerns for solutions.

In attendance were the Municipal Chief Executive for GA South, Mr Joseph Stephen Nyarni and the Mayor of the Accra Metropolitan Assembly (AMA), Mr Adjei Sowah.

The GA South MCE in his address commended the family for the initiative and urged other families to emulate them.

He praised the head of the Arde Nkpa family and elders and averred that the assembly was instituting massive development in James Town and appealed to all to support the assembly.

Source: Allafrica

Students in UK can now Own a House Worth £400,000 With Zero Deposits

Homes for sale in the Selly Oak area of Birmingham, which is popular with students. Three lenders are now offering ‘buy for uni’ mortgages.
Fancy literally lording it over your college flatmates? A growing number of building societies are offering deals that let young adults buy their university home and pay the monthly mortgage with the rent they charge other students.

This week the Vernon building society in Stockport, Greater Manchester, launched a range of “buy for uni” mortgages, the third lender to do so. The other two are the Bath and Loughborough building societies, though the property can be purchased at any university town in England and Wales.

The striking feature of these deals is that students can borrow 100% of the property value – so there is no need to save up tens of thousands of pounds for a deposit. What’s more, the student almost certainly won’t have to pay any tax on the rental income, unlike a traditional landlord, nor the higher stamp duty that landlords have to pay when purchasing a second home.

Bath building society says it knows of one student who used the scheme and walked off in her early 20s with a profit of about £120,000 four years later. She then bought an apartment in Manchester and lives entirely mortgage-free.

Charles Hepworth was 19 and studying engineering at Loughborough when he bought a £130,000 three-bed house in the town with a loan from Loughborough building society. He chose a very short repayment period as he wanted to pay off the mortgage as soon as possible. And apart from taking rent from two flatmates, he worked 20 hours a week to earn more cash to keep paying the sum down. Now a graduate but still living in Loughborough, Hepworth reckons the property is worth about £145,000, and he has also managed to cut the amount of mortgage outstanding.

“I decided to do it in my first year. I could see that coming out of halls in my second year would mean paying loads of rent and seeing the money just go down the drain. So I started looking into alternatives,” he says.

I lived with friends, and it was just like any other student rental. We managed to ignore the fact that I was the landlord. Actually, my friends thought it was better, as if there was anything that needed doing, I sorted it out straight away.”

Does all this sound too good to be true? For most people it is, because there is a rather large catch: the loans will only be handed to students with relatively well-off parents.

In conventional buy-to-let deals, the borrower normally has to put down a 25% deposit. The “buy for uni” deals get around this by giving the student a 100% mortgage, but then putting a charge against the parental home to cover the risk.

Let’s say a student wants to buy a £120,000 three-bed in Manchester, and has parents who live in Brighton in a house valued at £600,000. Rather than demand a £30,000 deposit, the building society puts a charge of £30,000 against the property in Brighton, then lends the student the entire £120,000 for the home in Manchester. The parents don’t actually have to pay anything upfront but are liable for the entire loan if the regular monthly payments are not kept up.

A £120,000 mortgage on an interest-only basis will cost a student £500 a month – relatively easily covered by the rent from letting out a couple of rooms in the house, and allowing the young owner to live rent-free.

Steve Matthews of Bath building society, the first lender in the UK market, says it has lent £40m to student buyers since 2006, and arrears have been almost invisible. “They are very good landlords. They may be very young but, because they own the property rather than renting it, they look after it well.

“For the student buyer, it’s their principal residence, so it’s not the same as a buy-to-let mortgage. There is little or no stamp duty, there’s no capital gains tax on sale, and the rental income is very likely to be free of tax because the student has their own personal tax allowance [£12,500] and the tax-free rent-a-room allowance [£7,500]. In effect, it’s a large tax-free income.”

The interest rate on the loans can be high – typically 4.8% variable – and if base rates rise these loans could become quite costly.

But mortgage brokers are enthusiastic. Chris Sykes of the broker Private Finance says: “For a student with an entrepreneurial brain and who has inheritance/savings/a gift or equity from parents, this could well be the perfect opportunity to get a secondary income stream early in life and maybe even allow them to pursue other business ideas due to having a stable inflow of income.

“It may also allow them to make enough to not have to take additional student loans, with someone else funding the mortgage with their rent.” The schemes tend to have a minimum loan size of £90,000 to £125,000, and a maximum of £300,000 to £400,000. Buyers are also limited to three-bedroom houses, with no HMOs (houses in multiple occupation, usually five to six bedders) allowed.

What happens at the end of the student’s university years? 

Matthews says about 50-60% sell up on leaving college, with the rest either leaving the property rented out or making it their permanent home.

David Hollingworth of broker firm London & Country warns about the costs of buying and selling over a relatively short timeframe. “The student needs to be happy to take on the mantle of landlord as well, and it will also be important to consider the costs of buying and selling property. However, those that are likely to be studying for some time or are considering staying on after university could find they have the chance of home ownership before they thought it was possible.”

Source:The Guardian

Small Assets Account for 37 Percent of U.S. Multifamily Property Sales in 2019

Small Assets Account for 37 Percent of U.S. Multifamily Property Sales in 2019

According to global real estate consultant CBRE, there were 1,531 small U.S. property acquisitions in H1 2019, representing 36.7% of all multifamily asset purchases and revealing the scope of small asset buying. However, this purchase count is conservative since a notable number of transactions were under $2.5 million and therefore not included in the total.

The percentage of small asset purchases in 2019 is on pace to exceed the 35% annual average since 2010. The expected gain is attributable to several factors, including healthy property market fundamentals, investors' search for new investment opportunities, new buyers entering the market and attractive financing options, says CBRE.

Based on dollar volume, small asset investment seems modest at 7.8% of total multifamily investment in H1 2019. But given the very large total volume of multifamily acquisitions, this percentage is quite significant.

Investment on Track to Exceed $12 Billion

CBRE further reports small multifamily asset investment volume reached a record $14.5 billion in 2018, up by 20.1% from 2017 and well above all previous years tracked by Real Capital Analytics (RCA). In H1 2019, total sales reached $6.4 billion--down 10.1% from the same period in 2018. Aided by lower interest rates, 2019 investment volume should be comparable to the 2016-2018 annual average of $12.8 billion and be the second strongest year for small asset investment volume.

Small asset investment is attractive for many reasons. The size of these assets makes them accessible and operationally manageable to a very large pool of investors (91.6% of investment in H1 2019 was by private buyers). Debt financing has been favorable, with many lenders expanding their small balance lending programs. Market fundamentals remain healthy.

RCA's historical cap rate data reveals a consistent trend of small asset cap rates being lower than overall multifamily averages. Lower operating costs and the strong appeal of the product--whether for current income or for value-add opportunity--help keep cap rates low. However, a 20-basis- point cap rate increase over the past year likely represents a softening in trades resulting from rent stabilization laws in some markets like New York.

Small Assets are Older

Small multifamily assets purchased in recent years represent a diverse range of properties. However, as a group, some common characteristics stand out.

They are small, of course, by definition. Although they encompass a deal size range of $2.5 million to $10 million, the average sales price for Q2 acquisitions was only $4.2 million.

Small assets are older. The average age of small assets acquired in Q2 2019 is 60 years, versus 31 years for all other multifamily acquisitions.

Los Angeles, New York and San Francisco Dominate Markets

Small multifamily investment is occurring the most in gateway markets. Nearly two-thirds of investment by dollar volume over the past four years was for assets in New York City, Los Angeles and San Francisco. Most small asset investment also is in older neighborhoods, many of which are undergoing significant gentrification and redevelopment -- certainly a driver of steady investor interest.

U.S. Mortgage Rates Uptick in Early October

Freddie Mac's latest Primary Mortgage Market Survey shows that the 30-year fixed-rate mortgage in the U.S. averaged 3.65 percent, a slight increase from last week.

"While mortgage rates generally held steady this week, overall mortgage demand remained very strong, rising over fifty percent from a year ago thanks to increases in both refinance and purchase mortgage applications," said Sam Khater, Freddie Mac's Chief Economist. "As economic growth decelerates, it is clear that low mortgage rates will continue to support the mortgage market and we expect that to persist for the remainder of the year."

Freddie Mac News Facts

  • 30-year fixed-rate mortgage averaged 3.65 percent with an average 0.6 point for the week ending September 26, 2019, slightly up from last week when it averaged 3.64 percent. A year ago at this time, the 30-year FRM averaged 4.71 percent.
  • 15-year fixed-rate mortgage averaged 3.14 percent with an average 0.5 point, down from last week when it averaged 3.16 percent. A year ago at this time, the 15-year FRM averaged 4.15 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.38 percent with an average 0.4 point, unchanged from last week. A year ago at this time, the 5-year ARM averaged 4.01 percent.
US weekly average mortgage rates as of October 3rd 2019.jpg

Reshaping The Future Of Real Estate For African Cities

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Researchers predict that in 2030, Lagos, Cairo and Kinshasa will each have to cater for over 20 million people, while Luanda, Dar es Salaam and Johannesburg will have crossed the 10 million mark. By 2035, close to 30 million people could live in Lagos alone, turning Nigeria’s commercial hub into the largest megacity on the continent.

While Africa’s cities are growing rapidly in population, they are developing informally as current urban planning has proven to be ineffective, and private development is often deterred by opaque or inappropriate regulations.

When it comes to investments in infrastructure, industrial and commercial structures, and affordable formal housing, African cities have, until now, failed to keep pace with the concentration of people.

In Dar es Salaam, 28% of residents live at least three to a room; in Abidjan, that number rises to 50%; And in Lagos, Nigeria, two out of three people dwell in slums.

The World Bank’s African Cities report has also found that in cities like Antananarivo, Madagascar; Brazzaville, the Republic of the Congo; and Harare, Zimbabwe, non-contiguous built-up areas are scattered throughout the centre, with more than 30% of land within 5 kilometres of the city centre still left unbuilt.

In Ghana, buying land has often proved difficult when people often try and sell land that may not even be theirs. Others even end up building on land thinking they own it; only to find out when they need a loan that the land is not theirs.

Tackling the problem with land registration, Benben is a digital land registry and transaction system that was designed to solve a number of the inefficiencies in land administration currently experienced in Ghana, aiming to promote investment and encourage transparent property management in the region in future.

“With the inevitable population growth, African cities have an exciting opportunity to embrace technology to leapfrog ahead of the world in terms of affordable services and smart cities.

 Through adopting innovative technologies such as blockchain and AI there is the potential to uplift millions of people into prosperity and the formal economy” comments Daniel Bloch, Co-founder, BenBen

Springing African cities from this low development trap, how else can governments and institutions begin to properly address Africa’s need for better urban infrastructure and affordable housing?

Are developers involved in real estate development in Africa looking at the right solutions, using architectural and planning approaches that are more than just mere carbon copies of cities elsewhere in the world?

“The problem of rapid urbanisation is a wicked problem that requires developers and their professional teams to think more systemically.

We still find too many examples of Western products, systems and technology been implemented in Africa that is not appropriate for our conditions. We need to ensure that whatever we implement has an Afrikan lens applied to it.

We need to have empathy and place our people at the centre of everything we do. We call this Afrikan design innovation.” Abbas Jamie, Director Innovation and Transformation Aurecon Africa

Over the next 20 years, the rapid growth of Africa’s urban populations is expected to thrust new demand for infrastructure, housing and other physical structures, and amenities. To meet this new demand, city leaders and planners need adaptable strategies.

Future Cities Africa sub-conference will look at how African governments and institutions can help formalize land markets, clarify property rights, and better leverage off land values to finance Africa’s urban development.

“As Africa faces a new reality, we must accept that the continent cannot move forward without proper discussions around the planning, infrastructure and urban development requirements of African cities in order for them to thrive and grow.

Africa Governments  should look into how African Cities can better open its doors to the world while creating more economically dense and inclusive urban areas.

“In order for African cities to bridge the economic, socio-political gaps they currently face, we need to pay special focus on how we can create sustainable, connected cities.

Without them, Africa’s growth and development will remain sluggish, and uncertain. The answers to these key issues will not only help to develop Africa’s future cities, but will ultimately have a positive influence on the growth of the real estate market for the rest of the continent.

Africa’s Real Estate Sector Continues To Evolve Despite Market Volatility

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Over the last year changes in Africa’s regulatory environments, coupled with constant swings in commodity prices as well as heightened political and economic tensions, have resulted in ongoing volatility in the continent’s real estate markets. Despite this, fundamental demand-supply imbalances continue to present a largely attractive long-term investment outlook and thereby drive demand for real estate investment opportunities. As a consequence, there has been significant interest from both domestic and international investors as well as some - albeit marginal – growth noted in the market during this period.

“This growth points to an evolution in the continent’s real estate sector as well as to the urgent need for investors in this space to adapt their approach in line with this evolution and to seek out more economically sustainable ways to participate effectively in these markets,” according to Niyi Adeleye, Head of Real Estate Finance for Africa Regions at Standard Bank.

Given the volatility which Africa’s economies are generally subject to, more patient, long-term strategies for delivering value also need to be adopted and thorough market research, conducted as well as ‘Fit for Purpose’ solutions, applied.

A ‘one-size-fits-all’ approach does not work in Africa and it is crucial that sufficient time and resources are put into understanding the vast and varied markets that call the continent home.

The more traditional private equity funding model has begun to fall out of favour and in order to effectively navigate the current environment, investors are now increasingly taking portfolio views and evolving from short-term to more permanent real estate investment structures.

“When the size of an economy does not allow for the scale that investors are looking for, this limits the depth and size of the investments that they are able to make in that economy,” says Mr Adeleye. “We are however, now seeing a shift towards more diversified markets and the evolution of previously untapped asset classes, as well as the emergence of a new breed of investor class,” he adds.

Historically, the markets have been dominated by developers or development entities creating assets but ‘property aggregators’ are now buying properties out at reasonable levels of discount and creating investment theses for them to achieve their return objectives. This demonstrates a level of depth within the markets and, once again, speaks to the evolution thereof, which is creating a demand for new asset classes and triggering the start of a new cycle of development and acquisition, with increased sustainability built into the structure.

Real estate investment offers long term, stable return profiles and continues to represent an exciting opportunity for the deployment of local savings for broader investment and economic growth. And while African real estate investment has traditionally focused on top end, global quality opportunities aimed at attracting hard currency funding; these markets are today rapidly developing the infrastructure that connects their economies to the world and making middle and lower end real estate opportunities more attractive to investors.

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