How to start real estate business in Nigeria [Client acquisition process explained]
August 18, 2020
How to start real estate business in Nigeria [Client acquisition process explained]
Real estate business – Investment in fixed asset is arguably one of the real life hacks of the 21st century.
As real estate investment soars across different countries of the world, Nigerians thankfully had not given a blind eye to it.
Citing the 2013 boom in the industry, which shows that real estate GDP growth rose from 15.1% in the first quarter of 2013, peaking at 24.14% in the second quarter of same year.
With full year GDP growth hitting 20.49% in 2013.
There appears to be fluctuating indices in the sector ever since, that notwithstanding investors have continued to reap benefits on a ride.
To this end, investment in the real estate sector can no longer be referred to as an emerging market anymore.
For instance, real estate makes for majority of national income in developed nations like the U.S.A
Again, residential real estate provides housing for families. It’s the greatest source of wealth and savings for many Americans.
Suffix it to say that “in 2018 alone, real estate construction contributed $1.5 trillion to the American economic output, mathematically, that’s 6.2% of the U.S gross domestic product in the period under review.
Moving away from that now, if you are a prospective or existing investor and wants to have a smooth sailing in the industry for maximum profit, I detailed and prepared this guide to help you.
This should serve as your touch light into a discovery that’ll reshape your business ideology in the real estate sector.
Additionally, you will learn how to start a real estate business for maximum profit.
Also featuring in this guard are;
- How to start a real estate business from scratch
- How to make money as a real estate agent in Nigeria
- Real estate business in Abuja
- How to register a real estate company in Nigeria
- What is real estate business all about?
- Is real estate business profitable?
Understanding the concept Real estate/what is real estate all about?
Real estate is a business that deals with properties like land and buildings, homes etc of huge effect.
This deal could be selling, buying or renting of these properties for a profit.
Hope that is well understood?
Now going into real estate does not just happen like other businesses, this difference is attributed to the fact that it requires huge capital outlay, which must be invested appropriately.
Again, you must ensure a property worthy of investment is not under valued for certain market conditions and circumstances.
This then leads us to categorizing investment in this sector into types
Types of real estate
- Residential real estate
- Commercial real estate
- Industrial real estate
The above are the most prevalent branches/types of real estate investment to be studied critically, as any investment in the sector apparently falls within one or more.
#1. Residential real estate
These are properties that have to do the residential buildings, which could be purchased as well be on a resale.
The most common form of residential estates are Bungalows, storey-buildings or duplexes.
#2. Commercial real estate
A commercial real estate is that used for commercial purpose, like business stores, warehouses, shopping malls and centers.
It may also include buildings for hospitals, schools, hotels, corporate offices and other buildings which major aim is to make money or generate revenue.
#3. Industrial real estate
When you say industrial estate, these are buildings set aside for manufacturing goods and services, sited for industrialization. They may be converted to warehouses, so long they serve purposes of industrial value.
#4. Land real estate
Land estate is the pivot of all the estates itself, this can be referred as an empty or vacant land capable of housing a building of any intent, be it residential, commercial or industrial buildings.
It could be developed or under developed as the case may be.
How to start a real estate business in Nigeria
Having known that you can actually pull a fortune from the industry, it becomes pertinent to learn the robe for effective success.
It does not go without saying you’ve got to put it right the first time. The success of this business like any other depends on the level of information at your disposal.
#1. Define your niche
As this may not really stand through for Nigerians, it however makes a lot of sense if you’re in the U.S and developed world.
Like I stressed earlier, the various niches include; Residential estate, commercial estate, Industrial estate and Land.
You may choose to combine all of them in Nigeria, after all there’s no special reference to them.
Whatever happens, you are making real money so long you are able to hold on and complete a deal.
#2. Get your business registered
The importance of business registration in Nigeria cannot be over emphasized, when you register your business, you are certified by law as a business entity.
It as well exempt you from certain anomalies, in a situation where the business faces a legal uproar, you cannot not be sued as an individual rather the business is being sued.
When this happens, you can delegate your legal department to respond and represent the business in law suits while you keep on driving other activities of the business that invariably brings in revenue.
Additionally, you stand to benefit from a number of things like accessing loans with banks, this may not be possible with unregistered business.
#3. You may get a physical office
If you want to render apartment renting services, then having a physical office may likewise be ideal.
Clients feel comfortable talking to a known person with a physical office.
They can easily onboard, register their choice of apartment while you search out with your network.
Of course you have to make your fee known beforehand.
Some agents charge as high as N50k to N100k per 3 bedroom flat.
Client acquisition process explained in 4 & 5 below
#4. Set up a business website
Businesses that want to make impact are online, any business that wants to succeed within a shortest frame gives an affirmative node to online presence.
Gone are the days business takes years or even ages to get noticed or acquire clients, by simply creating your real estate website, you are on your way to meeting clients you’ll convert to leads having done your lot on buyer persona.
Does it even stop at that? Not at all, you’ll need to go extra mile by blogging and creating content that engage your audience.
Having created an endearing content, ensure to have an email list collector/aggregator in place, read #5 below to put you in perspective.
#5. Get an email list
Congratulations on taking your business online, at least you’re close at hitting the real deal already.
At this point, it becomes necessary to inform you about email list.
An email list is a container of emails acquired from website visitors who apparently are interested in real estate business, order wise they wouldn’t have visited your website in the first place.
These are your to be or prospective clients.
With a good email list, you can target clients who have similar interest here, getting them converted to leads is very easier than calling all and sundry which could be very expensive and not targeted.
As soon as your real estate website is up and running, ensure you collect your web visitor’s email.
By cultivating this, you can send out targeted emails on deals and available businesses, the response is usually enormous if well targeted.
You see, content is the currency of the web, businesses that blog see 82% return on investment (ROI).
There’s no mincing words about that, let it sink straight.
Additionally, once you acquire these clients and they do business with you, ensure they do repeat business when the need arises in the future.
A study has shown that it’s easier and less expensive to maintain and keep existing customers than acquire new ones.
With the right form of attitude, you will convert these clients to brand advocates, this can only be achieved with exceptional customer service, let that sink as well.
#6. Execute and execute
Having drafted your line of actions in the new business plan already, though not mentioned, but ideally you should have one, you appear to have fixed every other modality.
You are being stared with opportunity and ability.
Take your steps one after the other, execute your plans according priority in ascending order.
Nothing comes easy, however consistency and resilience is your sure bet to success
Having said that, let’s take a holistic look at how you can make money from your new found bride.
How to make money from real estate business
You now understand how to set up your real estate business, revenue and customers are the livewires of every business just in case you’ve not heard.
Let me announce to you that there are different ways you can participate in the real estate and make real money out of it.
#1. You may invest in real estate shares
Real estate is a sector in the Nigeria Capital market, by this arrangement it’s been listed and traded by the Security and Exchange Commission (SEC) on the floor of the Nigeria Stock Exchange (NSE).
There’s no rocket science involved, all you need to get started is to visit a stockbroker, who in turn helps open a Central Securities Clearing System (CSCS) account for you, which is like a bank account from where you authorize the stock broker to make certain purchases or investments on your behalf.
The broker may be responsible for advising you on viable and promising securities you should consider, invest and reap your dividends thereafter.
#2. Buy and sell properties
You shouldn’t be ignorant of the fact that you make money in this industry by buying and selling properties, which as well can be referred to as property flipping.
You may decide to buy buildings which have reached completion stage or those still under construction, whichever you choose depends on your business model and what you wish to achieve.
If you have the budget, buying a completed building and selling it later for a profit when it appreciates seems the best deal in most situations.
Though is very much subject to your financial outlay.
You can make a lot of money buying or selling properties, the record is everywhere in town.
You may however adopt any of the below strategies;
- Purchase and resell an undervalued property: This market can be very exciting, there are a lot of people who want to dispose off their properties in a hurry. Emergency and other reasons involved could give raise to this. They are willing to sell it at much lower price because they bought at a lower price too, you can purchase such property and sell it at a very high market and current value.
- Purchase property, renovate and put it up for sale: All that’s required is to locate a dilapidated property in a good location, repair and renovate it, then put it up for sale at the current market price and smile to the bank.
- Do corporate investment: This is a practice where investors come together, pull up resources to invest in real estate, they sell the property and share the profit.
#3. You can make money as a land surveyor
You’d better understand the role of a surveyor in the real estate market.
A surveyor takes land or property measurement to determine boundaries, they work both in the field and office.
Their work could be tedious depending on the land or topography of the property.
You can make a fortune taking to this line of profession, you however need requisite qualification and probably register your business routinely for operations. There’s no limit to how much you can make in this field.
#4. Become a property agent/how to make money as a real estate agent in Nigeria
Becoming a property agent presents further opportunity to make money in the industry, as a property agent, you will need a vast knowledge of the system across versatile network.
You should be able to locate properties at choice areas, then make recommendations to your clients who then evaluate and acquire them.
Becoming a property agent does not come at the snap of a finger, you need to be well versatile, have good network of other agents who may be able to identify properties as well.
As an agent, you may be required to locate; Residential buildings, commercial buildings, industrial buildings, even lands in accordance with client’s specification and location.
There’s always a 10% fee attached to this, most often shared among the league of property agents who worked and actualized the acquiring of the said property.
#5. Construction Company
As a construction company, you make money from the industry when it requires moving of large earth or clearing a particular land after purchase is made.
It may be deforestation or whatever, depending on what the property is aimed for.
You will make money by deploying your machines to undertake such project.
Running a real estate business in Abuja is just like running it in any other Nigerian city. The edge Abuja may have is giving to the fact that there abounds many investors in this city, thus money is easily displaced to work.
Buyers could be pretty much as well, just like you have sellers flooding the market, with this in mind;
There’s no point leaving idle funds in your bank account, put these funds to use and you’ll better off with it the nearest future with real estate business.
Raphael Orji is a freelance writer, professional blogger and a content marketing consultant. I work with small businesses, startups and entrepreneurs in building their brand image with high quality blogging and content marketing strategy.
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