Earning rewards on real estate investment means being able to avoid pitfalls that could hinder its success. But how can you overcome these pitfalls if you have no understanding of what they are?
In this blog post, you will learn about factors that can affect your investment reward as an investor in real estate Nigeria.
Economic Factors
This is a major factor that can affect any and every investment because it encompasses the country’s state of health. Every factor that determines individual financial capacity which in turn contributes to the economy’s growth is found here. They include;
- Gross Domestic Product Growth; it measures the increase in size of the country’s economy by the total output of goods and services over a period of time. A robust economy with constant GDP growth will affect the demand for real estate, especially commercial spaces.
- Foreign Exchange Rates; this depicts the value of the country’s currency over other currencies. Naira fluctuation affects investment value and real estate property price.
- Inflation and Interest Rates; inflation depicts the fast rise in price of properties, while interest rate is the percentage earned on fixed savings. Imagine making a fixed deposit to buy a property, only for the property price to increase and you earn low interest on your savings.
Infrastructural Development
Areas with no potential infrastructural development plan experience a low investment record. The development of roads, bridges, airports and other infrastructural facilities will contribute to the growth of Nigeria’s real estate sector. These infrastructural facilities include;
- Transportation systems such as railway stations, connecting road networks, airports, etc.
- Technology and telecommunication including smart homes development, broadband and fiber connections, etc.
- Social amenities including health care facilities, electricity, water supply, etc.
Governmental Policies
Various regulations, laws, and zoning restrictions can significantly impact real estate investment. Some of these regulations include;
- Tax policies; these are charges levied on real estate property owners including capital gains and other tax incentives.
- Urban renewal Programs for redevelopment of land and buildings in certain areas.
- Land use regulations; this controls how land is used in certain areas including zoning laws and land use restrictions.
Investment Financing Options
What financing options are available to real estate investors?
- Government housing program; this provides subsidies or incentives for homeownership to boost the housing market.
- Real estate investment funds: Real estate investment trusts (REITs) and other investment vehicles can provide opportunities for both institutional and individual investors.
- Affordable mortgage rates.
Land Reform And Title System
This is categorized into three (3) sections, which are;
- Land acquisition processes for property development and infrastructure projects.
- Land ownership through clear land title documentation for property transactions and investment.
- Land registration through a reliable land registration system to ensure property ownership and prevent disputes.
Conclusion
Real estate investment can be very complex, especially when it is being influenced by these factors. As an investor, you have to stay updated with any real estate trends that impact or affect your investment.
At Novarick Homes and Properties Limited, we are not just about selling properties, we understand that your property is more than just an asset, it is an investment. This is why we always provide tips to ensure they maximize the full potential of their property.
You can visit our website at Novarick Homes and Properties Limited to read up on other helpful content. You can also check out affordable property available for sales.
