5 essential tips for aspiring land banking investors: maximize returns and minimize risks

Dear aspiring land banking investor.
Investing in real estate is indeed risky but by following the correct information you could succeed.

In this short article, I will be sharing 5 investment tips that should be ticked to maximize higher returns and minimize risks.

1. TIMING – There is a right time to buy and to sell in any market and real estate investing is no exemption either. There are certain indicators to look out for to correctly predict the right time to buy. 

• When it’s cheap – Many estate companies offer pre-launch offers, discounts, and bonuses. This is the right time to buy as a smart investor because you will be richer at the end of the offer. Though you can buy after the pre-lunch offers it will take you a more longer time to get back your money. 

• When development starts – You don’t want to keep your money stuck forever. When considerable developments like roads, fencing, drainage systems, houses, etc are getting done in an estate is the right time to sell because the value of the land has greatly increased.

As a land banking investor timing is more important than the location because you are more interested in quick returns. Getting a suitable location and failing to buy or sell at the right time would reduce the worth of your property

2. LOCATION – As an investor, you shouldn’t be concerned with the nearness of an estate. What you should look for is landmarks surrounding an estate and potential businesses or infrastructural developments moving towards that area. One good indicator of a good location is government presence. If there is a government-owned facility like a school or hospital it promotes growth in the area which affects the appreciation of the land. 

As a smart investor, don’t buy land from an area that has past its potential for development. Because new developments will be moving to open areas with a lesser competition thereby affecting property values in the area.

To get a quick return on investment, invest in a developing location rather than a location already developed.

3.QUALITY – As an investor, you don’t want to buy land that is difficult to sell. Always go for dry table land if possible and inspect the quality of the soil. Stay away from land areas experiencing oil spillages or areas with high activities of sand dredging and mining. All these activities devalue your land. 

One thing that also affects the quality of your land is security. If an area is prone to violence, civil unrest, and communal crises the values of properties within such areas will be greatly affected because industrial and infrastructural developments which aid the appreciation of a property will come to a standstill or completely driven from such areas.

4.TITLE – Check out options with lands that have a good title. The better the title the more valuable and easy to sell the land is. For example, land with CofO will have greater market value than land with freehold as a title.

You don’t have to wait until you get the perfect title before making your investment. You can buy land containing just a deed of assignment as a title and then increase the value by getting a CofO done.

5.AMOUNT – Make sure you understand the correct price you are paying for land. Most of the time, the amounts advertised on flyers aren’t the complete price you have to pay to secure your investment.

There are some hidden charges such as plot demarcation, and legal and development fees. A plot of land that is advertised for 1 million naira could end up being 2m naira after payment of all necessary fees. The shocking thing is that most agents will not disclose these to you after your purchase so make you ask for the legal fees and any other fees attached to the said land.

It is a good thing to plan and follow through on your budget. You may get tempting and amazing offers from your realtors that you could jump into if you don’t have a budget already planned. You don’t want to invest and go broke at the end of the day. Make sure your investment doesn’t affect your lifestyle.

A well-planned budget will save you from selling off your investments before they get profits.

These are tips you want to check before investing in landed assets. If you get them correctly, you will get a better return on investment.

Remember real estate investments are risky, to minimize your risks you need the help of an experienced realtor.

See also 5 mistakes beginner investors must avoid to succeed in Nigeria