The post TITLE DEED IN REAL ESTATE INVESTMENT appeared first on 9japroperty.

The post Dangote Refinery confirms Lagos as prime investment destination – Ambode appeared first on 9japroperty.

The post Stakeholders seek pension fund investment in housing appeared first on 9japroperty.

He said the NIESV had sent out proposals to the Federal Government to look at housing as a total programme beyond the input of the private sector.

“The government must be involved in two key areas: social and investment housing that will incorporate everyone,” the NIESV president said.

“The Nigerian government should take a cue from Singapore; there should be a scheme to produce flats on a continuous basis yearly,” he added.

According to him, once the government begins massive construction of houses, jobs will also be created for the youth.

Patunola-Ajayi said that the institution aimed to take proactive steps on building membership, improving professional practice and public perception of the profession, and building on international affiliations in the next two years.

He said, “Membership of the institution is just about 5,000 compared to the population of the country; so, we are looking at creating awareness for members to register and come in to practise.

“We are also setting a higher standard to ensure quality; so, members will go through a modern technology-based procedure. We also want to intensify disciplinary measures so as to protect the profession’s image.”

He also said that the institution planned to train more real estate agents under the auspices of the Association of Estate Agents in Nigeria, which the NIESV created about two years ago to check quackery.

“The AEAN is one of the best things to have happened to estate agency and we are working in phases to improve their activities. Presently, we are doing prequalification of members,” Patunola-Ajayi said.

PUNCH.

The post Govt should target social, investment housing – Patunola-Ajayi appeared first on 9japroperty.

The post Real estate investment 101 appeared first on 9japroperty.

Many hot spot areas experience surging prices until they peak and mature. Their value does not diminish but appreciates at a more realistic level.

In a normal setting, properties appreciate over a period of like ten years but this general rule usually does not apply to these hot spots. They might have been slow growth areas but when they suddenly begin to appreciate the pace is frantic. In fact, there has been instances where a property worth millions appreciated by 15 per cent within less than a week.

Some could double in value in less than five years. Those investors that are fortunate to be properly positioned in those areas at such times always reap amazing dividends. This is why many real estate investors desire to know what to look for in order to take part in those opportunities.

More often than not most of those who benefit from sudden growth and property appreciations did not see it coming. Many people invest in real estate without understanding the dynamics but astute real estate investors are intentional when it comes to investment. They have clear rules that help them to determine where to invest and what to expect.

They are also psychologically prepared for whatever comes out of it. They spend their spare time researching and inspecting the likely places to invest in and comparing the reasonable rate of returns to expect.

Although we cannot predict with accuracy where these property hot spots will be we can make the best educated guess that is based on knowledge and observation.

This would significantly reduce the likelihood of missing a good property deal or a high growth area.

Let’s start from the basics. One of the building blocks of high growth areas is population spread. If you take a little time to analyse some high growth areas you will understand the dynamics that exist between population and property values. Consider Lagos State that is estimated to have a population of about 25 million people.

The social, economic and government activities that take place there is simply enormous. The more intense the economic activities of an area the more people are attracted to the area.

The more people are attracted to the area the more they love to stay in that area for family or personal reasons. The more people settle in the area the more real estate values will increase.

The areas that are close to high growth areas also benefit from the spillover effect. Once a high growth area starts rapid appreciation in value the areas around the place suddenly becomes more attractive due to lower purchase price and proximity.

The rapid appreciation in the prices of property prices in Lagos, for instance, is helping to boost the value of properties in the neighbouring Ogun State.

Driving on a 10 kilometer stretch from some part of Lagos for instance, you could move from an area where a parcel of land goes for N10m to a nearby area where the same size of land is available for a fifth of this value. This comparism could be examined on a micro level when you look at the factors driving growth that has been directly or indirectly discussed above.

Property hot spots are usually areas that are close to commercial areas that also have good infrastructures. Sometimes all you need to position yourself in a property hot spot is to investigate areas that are close to where the government has committed itself to solid infrastructural projects and where the private sector is gravitating. It is better to position yourself in these areas prior to the commencement of these projects.

The moment these projects commence they will lead to the movement of people to those areas. The companies, the staff of those companies, suppliers and several other individuals and businesses connected to those areas will begin to move to the area either for residential or commercial purposes.

These new arrivals will need houses to live in and shops or offices to rent.

Once demand suddenly increases and keeps on increasing the value of the limited accommodation and land will follow suit. This cycle and trend keeps repeating itself all over the world. If you missed out of a property hot spot the next ones may be closer to you than you think. Look well and you will see.

PUNCH.

The post Hot spots in real estate investment appeared first on 9japroperty.

While some investors may want to buy a property and rent it out straight away, others may choose to live in the home while they renovate it. Investing in bricks and mortar can be a great way to create wealth, but there are some golden rules to consider before taking the plunge into property investment.

1. Know your budget

Before investing in property it’s vital to have a thorough understanding of your cash flow. Also, ask your bank for a pre-approval of your investment loan, so you know how much you’re able to borrow before you start hunting for properties.

2. Don’t underestimate ongoing costs

Make sure you budget enough for rates, insurance and general repairs. And when you have purchased your ideal investment property do what you can to prevent costly maintenance issues arising, such as replace ageing taps.

investment1
3. Buy in a growth area

Try to choose an investment property in an area where there is strong demand for rental accommodation. Buying a property close to transport, universities and schools will make it more attractive to renters.

Read more: Investment Property Market Data

4. Be realistic about your investment goals

Are you looking for fast capital growth or wanting to hold the property long-term? During boom periods, it’s much easier to renovate properties and turn them over for a quick profit. In slower economic times, it may take many years to achieve the same growth.

While a home on a steep block may have a stunning view, it could be a nightmare to renovate due to retaining or excavation costs
5. Build sweat equity

Paying tradesmen to renovate your investment property is costly. If you’re prepared to get your hands dirty you can save money and increase your profit margin by doing the work yourself.

6. Look for liveable not luxury

Remember a rental property only has to be clean and functional. Don’t get sucked into buying a property simply because it has a stylish interior.

7. Buy with your head not your heart

When house hunting it’s very easy to get caught up in emotions. While a home on a steep block may have a stunning view, it could be a nightmare to renovate due to retaining or excavation costs. Be sure you weigh up the pros and cons.

investment2
8. Think carefully before negative gearing

If your repayments on the investment loan won’t be fully covered by the rent, your property will be negatively geared. While this can have tax advantages, it can also lead to financial stress if you don’t have enough cash flow to cover the loan repayments, rates or body corporate fees, so consider your budget carefully before buying

Read more: What is negative gearing

9. Still paying off your own home?

It isn’t necessary to have your own home fully paid off before buying an investment property, however it is important to be comfortable with your current debt levels. Ideally you’d want to have a large portion of your own home paid off and other debts, such as credit cards, under control.

10. Get a building inspection

Before signing a purchase contract, take the time to understand the building report to avoid expensive repairs down the track. Termites are one potential problem to watch out for.

The post 10 tips for getting started in property investment appeared first on 9japroperty.

Warren Buffet is a household name. He needs no introduction. Suffice it to say that Warren Buffett is an American business magnate, investor, and philanthropist. He is widely considered the most successful investor of the 20th century. He was ranked as the world’s wealthiest person in 2008 and as the third wealthiest person in 2011.

It is a great privilege to learn from this investment guru. In an exclusive excerpt from his popular shareholder letter, Warren Buffett looks back at a pair of real estate purchases and the lessons they offer for equity investors. Hear Warren Buffett:

…let me first tell you about two small non stock investments that I made long ago. Though neither changed my net worth by much, they are instructive.

This tale begins in Nebraska. From 1973 to 1981, the Midwest experienced an explosion in farm prices, caused by a widespread belief that runaway inflation was coming and fueled by the lending policies of small rural banks. Then the bubble burst, bringing price declines of 50% or more that devastated both leveraged farmers and their lenders. Five times as many Iowa and Nebraska banks failed in that bubble’s aftermath as in our recent Great Recession.

In 1986, I purchased a 400-acre farm, located 50 miles north of Omaha, from the FDIC. It cost me $280,000, considerably less than what a failed bank had lent against the farm a few years earlier. I knew nothing about operating a farm. But I have a son who loves farming, and I learned from him both how many bushels of corn and soybeans the farm would produce and what the operating expenses would be. From these estimates, I calculated the normalized return from the farm to then be about 10%. I also thought it was likely that productivity would improve over time and that crop prices would move higher as well. Both expectations proved out.

I needed no unusual knowledge or intelligence to conclude that the investment had no downside and potentially had substantial upside. There would, of course, be the occasional bad crop, and prices would sometimes disappoint. But so what? There would be some unusually good years as well, and I would never be under any pressure to sell the property. Now, 28 years later, the farm has tripled its earnings and is worth five times or more what I paid. I still know nothing about farming and recently made just my second visit to the farm.

In 1993, I made another small investment. Larry Silverstein, Salomon’s landlord when I was the company’s CEO, told me about a New York retail property adjacent to New York University that the Resolution Trust Corp (RTC) was selling. Again, a bubble had popped — this one involving commercial real estate — and the RTC had been created to dispose of the assets of failed savings institutions whose optimistic lending practices had fueled the folly.

Here, too, the analysis was simple. As had been the case with the farm, the un-leveraged current yield from the property was about 10%. But the property had been under managed by the RTC, and its income would increase when several vacant stores were leased. Even more important, the largest tenant — who occupied around 20% of the project’s space — was paying rent of about $5 per foot, whereas other tenants averaged $70. The expiration of this bargain lease in nine years was certain to provide a major boost to earnings. The property’s location was also superb: NYU wasn’t’t going anywhere.

I joined a small group — including Larry and my friend Fred Rose — in purchasing the building. Fred was an experienced, high-grade real estate investor who, with his family, would manage the property. And manage it they did. As old leases expired, earnings tripled. Annual distributions now exceed 35% of our initial equity investment. Moreover, our original mortgage was refinanced in 1996 and again in 1999, moves that allowed several special distributions totaling more than 150% of what we had invested.

The moral of this story is that you don’t necessarily have to be an investment genius to reap from real estate investment. Secondly, real estate investment has the tendency to out perform other forms of investment with the passage of time.

The post Real Estate Investment Tip From Warren Buffett appeared first on 9japroperty.

If you thought you couldn’t play in the property market because of the high cost of real estate, you’re probably wrong because people in similar conditions as you currently are have found ways to deal in property. There is no doubt that investing in property is one of the most effective tools for wealth creation. Historically, a substantial proportion of the world’s wealthiest people have had real estate playing a crucial part in the accumulation of their fortune. If you are desire to build financial capacity, real estate should interest you, as it could be a key part of a formidable investment portfolio.

Here, we provide resources to guide through a process of translating your dreams to reality in real estate investment.

Major Money-making Opportunities In Real Estate

How do you, as a small player, find your feet in the property market as to expect to make any money? That could be your worry and is legitimate, given the perception of high property prices. Expects, however, say there are things even a small investor can do to earn good returns from property. This articles outlines strategies that can see you making an impact in property, in spite of limited resources.
Read the article»

How To Negotiate Great Deals When Buying Real Estate

Negotiating a good property deal is a key element of investing profitably in real estate. How successfully you can negotiate a deal that proves favorable will depend on how equipped you are for that encounter. Especially if you are new to the business, there are some fundamentals that you must get right if you are to emerge from a property negotiation feeling good with about outcome. Here is a guide to give you a head start and ensure you come out with good results even from your first encounter.

The post Real Estate Investment: Making Money In Property Business appeared first on 9japroperty.

HMOs, generally rented to young professionals and key workers, are intrinsically geared towards maximising rental income by letting each room on an individual basis, according to the report from Platinum Property Partners.

According to Propertywire.com, research for PPP has shown that compared to capital gains, rental income for all types of BTL is by far the most dependable and stable source of return on investment. The firm says that HMOs landlords are therefore best positioned to absorb the higher mortgage costs caused by an interest rate rise, an event which the Bank of England has indicated will take place in early 2016.

It explained that the profits of a standard buy to let investment can be wiped out by a three per cent rise in interest rates, assuming mortgage rates increase by the same amount, as gross rental income is not sufficient to cope with higher mortgage interest repayments.

Even although HMO landlords pay for all household bills, the fact that the property generates a much higher gross rental income means that these costs are easily absorbed. The analysis suggests that the maximisation of income from a given size of property by creating extra rooms and renting them to multiple tenants means HMOs can generate rental income that is up to four times higher than the rents achieved in a standard buy to property.

Previous analysis carried out by PPP has shown that rental income is a far more stable and dependable source of return than capital gains, dispelling the myth that the success of any buy to let investment is mostly about rising house prices.

From 2010 to 2012, investors operating in both the standard BTL and professional HMO market were sustaining capital losses. It was only in 2013 and 2014 that capital gains began to recover but in contrast, rental income consistently increased throughout the same period for both asset classes, albeit at a much higher rate for HMOs, the report says.

It also points out that the best way that landlords can ensure their investment can cope with an interest rate rise, and any other unexpected costs, is by planning ahead and having a good understanding of the financial performance of their portfolio.
Research carried out by PPP in 2014 showed that a severe lack of research and poor planning is preventing many buy to let investors from maximising their income. A quarter of buy to let investors sought no advice and carried out no research before making their property purchases and a staggering 93 per cent had no five year plan for their investment.

Separate research by PPP shows that landlords are also prone to miscalculating their returns. Some 12 per cent landlords do not take any costs into consideration when calculating the financial performance of their buy to let portfolio. In addition, one in four landlords pay mortgage interest but do not take this into account.

The post ‘Multiple tenants’ houses have better investment appeared first on 9japroperty.