After reading this article, you should be able to –
- Understand the meaning of Land Banking and how it works in Nigeria
- Learn how to hedge inflation, using Land banking
- Understand land banking as a business module for highly successful entrepreneurs and Investors
- Learn Important Factors To Consider Before Indulging In Land Banking
- Learn how to be super successful doing land banking business in Nigeria
Please do not skip any part of this article, because you might be missing out on super-important information that could be very vital for a remarkable result.
WHAT IS LAND BANKING?
Land banking is simply a way of accumulating land for future use.
Future use could mean estate development, industrial development, or re-sale for higher profit.
In this article, we are going to be more concerned with the concept of Land banking in Nigeria and how to achieve “mind-blowing” financial success using specific strategies and techniques in Land banking.
Before we get into this proper, you need to consider if Land banking is right for you.
WHY SHOULD YOU CONSIDER LAND BANKING IN NIGERIA?
…Is Land Banking Right For You?
In March 2022, the Central Bank Of Nigeria (CBN) told us that the inflation rate was at 15.92%. This means that you lost 16% of the actual value of the monies you have in various savings accounts between 2021 and 2022.
This is correct because CBN did their calculation, using the overall price increase of general goods and services, however, we might need to bring it home properly and do the arithmetic ourselves, so the average man in the street can understand it better because everyone feels the heat of inflation base on what matters to them.
You remember that a bottle of Fanta and coca-cola beverage drinks went from 100 naira to 200 naira in 6 months. Now, this is a 100% inflation on Fanta and coca-cola beverages. You can continue the calculation on anything you can relate to and you will come to realize how much purchasing power your money lost while sitting idle in a savings account.
Regrettably, Nigeria banks pay you less than 5% on your savings and let’s say you are lucky to find an investment opportunity that pays you up to 10% per annum, you still run substantial loss because the average inflation rate between the period of 1960 to 2019 has been at 16.1%; This means that an item that cost 100 naira in 1960 would cost exactly
428,017.62 naira in 2020.
Can you calculate how much this same item would cost by the end of 2022? This explains the phrase; “savers are losers”
Now ask yourself this question, what item could you have bought in 1960 that will still be of the maximum value today, even in the next 50 – 100 years? The answer is Land, in a fast-developing region, Land banking in Nigeria, done right at strategic locations is the answer!
Smart investors discover where people will be going next, get their first and wait – This is the Almighty formulae of Land Banking in Nigeria.
Now that you’ve found a reason to get involved in the untapped gold mine, known as the land banking business, It’s important to note that Land banking is one of the smartest ways to protect your money from inflation, however, there are a few things you must consider before going into land banking in Nigeria as not considering these might result in low returns on investment(ROI) or outright loss of invested capital.
IMPORTANT FACTORS TO CONSIDER BEFORE PICKING UP LAND BANKING IN NIGERIA
There are four important factors you must consider before going into land banking, these are;
- Location Factor
- Information Factor
- Due Diligence Factor
- The Expert Factor
1. LOCATION FACTOR –
Every smart land banker must understand the role location plays on their asset; Some people will tell you that the 3 most important factors to consider when investing in real estate are location, location and location
A LOCATION CASE STUDY
Mr Peter, (not his real name) bought 10 plots of land in Isolo Town Lagos at 1.5 million per plot in 2002, at the same year, Sampson bought 10 plots at Ikate Lekki Phase 1 at the same price.
Then most people desired Isolo because Lekki Phase 1 was very swampy and Marshy.
Today, a plot of land in Isolo is worth an average of 25 million per plot while a plot in Ikate, Freedom Way is worth over 150 million naira per plot.
This means that Mr Peters’s 10 plot is now worth 250 million while Mr Sampsom’s 10 plot is worth 1.5 billion.
Both Mr Peter and Mr Sampson had the same amount of resources to invest with, one made a few million on ROI while the other maximized his returns on investment.
This is a result of the amount of information each had and their willingness to follow up on this information.
INFORMATION FACTOR –
The phrase “information is power” is everlasting truth, and your success in any field is in relationship to the amount and quality of information at your disposal and how much you are willing and able to make use of them.
The difference between the rich, the middle class and the poor have always been the level of information each has, and how they filter and make use of them.
Note that you can never grow bigger than the information you have, hence learn to connect yourself with experts in your field of interest and always tap from their wealth of information.
A CASE STUDY ON INFORMATION –
If Mr Peter had the amount of information Sampson had in 2002, they both would have probably made the same choice and would have had the same or similar result, or he probably had the information, but never acted on them, due to confirmation bias, or pressure from family and friends.
The quality of people you surround yourself with is always equal to the quality of information at your disposal.
Connect yourself with at least one expert in each of your fields of interest and always consult them for advice before you venture into any business or investment opportunity
N/B Real Estate and Investment GPS Ltd is you right plug for the right information and best investment-making decisions.
Before you act on any given information, we at Real Estate and Investment GPS recommend that you carry out a detailed and comprehensive due diligence
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3. DUE-DILIGENCE FACTOR
Due diligence is simply the act of evaluating and appraising the information at your disposal before acting on them.
Before indulging in Land banking, it is super important that you conduct a detailed and comprehensive due diligence on the information you have, as this will not only save your hard-earned money, it will also improve your returns on investment maximally
you could book an appointment, and we will assign one of our experts to guide you in verifying the authenticity of the property you wish to buy, as well as ascertain if the property is in complete alignment with your purpose of investing.
4. THE EXPERT FACTOR
The importance of working with an expert in any field of interest can never be overemphasized.
A lot of people shy away from it and pay the prize in diverse ways.
Experts are people who have been there several times. They have solved the problems you are facing more often than you have ever thought about it.
Have you ever bought and lost property before? It is because you never worked with a true expert. You decided to work with the comfort of family members, friends, loved ones, club members, Church members, etc and you ignored the place of experts and this cost you your hard-earned money.
If you will not trust your complicated health issues to a family member, friends or loved ones, but will always seek the guidance of a qualified doctor, who is experienced in the field, why would you trust a large chunk of your hard-earned money to someone, who does not have a comprehensive understanding on Land matters in Nigeria? when you know clearly that they don’t have all the experiences you need to excel
Real Estate investing is a serious business and should be treated as one. Never underestimate the importance of choosing the right expert when investing in Real Estate.
Real Estate and Investment GPS is the right plug for all your land banking and property acquisitions.
Please book an appointment with us today and experience the difference.