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Land vs House in Nigeria

Land vs house: Which is the Best Investment in Nigeria?

This has been an unending debate among Nigerian real estate professionals. Some would argue that buying land and allowing it to appreciate over the years is a better form of investment. Others say building a house for passive rental income is the best form of investment.

In this article, we will dissect the two lucrative investment opportunities. We will discuss the advantages and disadvantages of both investment opportunities. After reading this article, you will be better informed concerning what decision you will need to make.

See also how to avoid scams when buying a house in Nigeria

Investing in Land Vs Investing in a House

Before you can decide whether it will be profitable for you to invest in land or a house, you need to understand your financial status. Do you have an investment budget apart from living expenses?

Remember Jesus taught in the Bible that you need to calculate before starting a project? This is also what you need to consider here.

Most experts recommend spending 10 million naira or less on land investments because such a budget can’t afford building a house in this modern era.

If you have 15 – 20 million Naira and above then you can comfortably start investing in housing or both land and housing.

The difference here is that housing investment is capital intensive while the other requires little capital.

See also land banking investment tips to maximize returns

Pros and Cons of Buying Land Vs Building a House

 Long-Term Investment – Both land and a house can be a long-term investment. Building a house for rental purposes allows you to earn passive income for a very long period. While land will not start giving you a return on investment almost immediately.

Getting Your Return On Investment – When considering whether to buy land or build a house, you need to consider which will get you a better return on investment. You need to understand that if you buy/build a house you will need tenants to rent the house. You`ll also need to find tenants who can pay rent regularly to rent your house. So, if you buy/build a house in a high-income area you`re saving but if you have a house in a low-income area you`re in trouble.

For example, if you buy/build a house in high-brow areas of Lagos like Lekki Phase 1, Ikoyi, Banana Island ETC you will be able to get high-paying tenants who will not owe you rent. But if you buy/build in a low-income area, you may find it hard to get back your rent thus making it difficult for you to get your return on investment. So instead of buying/building a house in a low-income area, it`s much better to invest in land since you are guaranteed your return on investment.

Cost Of Maintenance – Buying land comes with a very low cost of maintenance. After you buy land, you don`t spend much extra money on land maintenance. In some cases, all you need is just to secure the land. To secure the land requires fencing it and putting a gate in the land and you`ll be good. In other cases, you will need people to be checking the land regularly to make sure no one else is developing it.

A house on the other hand requires regular maintenance for it to keep in shape and last longer. So, you will have to minus the cost of maintenance from whatever profit you will be making from the house. So landed property requires little or no maintenance while buildings require regular maintenance.

You can save yourself from the stress of fencing or sending someone to regularly check your land when you buy land from a trusted real estate company. A good realtor will help you through the process so that your land becomes safe and secure. Mishael Abilogun is a trusted real estate agent who will help you get your ROI quickly by guiding you along the land-buying process so your investment is safe and secure. The value of a good realtor and a trusted real estate company cannot be overemphasized in the real estate industry.

So, which is a better investment, buying land or building a house? Well, it depends. If you build a house in a high-brow area where people can pay your rent hassle-free then building a house is a good investment. But if it’s a low-income area, then you are better off investing in land because you`re guaranteed your return on investment.