When you invest in residential real estate property, you will get more than a home or a piece of land where to build your house. Owning a home has become a popular way for people to earn money, specifically in Nigeria, where land for sale or homes for sale are huge. This is not uncommon to buy a home or land without the goal of living there.
Many people simply buy and hold property, waiting for it to appreciate in value before re-selling it. Having cash for an advance/down payment may be an easy and quick strategy to enter the real estate business in Nigeria, but it’s not your only option.
Many people have realized ways to start investing in real estate with no money of their own. Options include borrowing money as well as a number of more unusual and creative paths to ownership. This short article will explain some of the paths people invest in real estate in Nigeria with no money.
1. Invest Without a Down Payment
Search for seller financing. If the seller is motivated enough, s/he may be willing to help you to buy by offering you a loan. You can offer to make higher monthly payments rather than a down payment.
You might also negotiate an agreement where the seller pays your down payments into a traditional lender as a way to sell the property faster. The seller might expect you to pay him/her back or s/he may agree to the down payment for free, essentially lowering the selling price of the property or homes.
For all these scenarios, ensure you have a real estate attorney write-up the agreement to ensure each party are protected.
2. Lease the Property with an Option to Buy
You can invest in real estate property slowly by making payments over a lease agreements in anticipation of having the money to buy. Your instalments would (at the very least to some extent) be credited toward the fee you will pay when buying the property.
Ensure the agreement specifically states a last price for that property. Define the exact part of the rental payments that is to be put toward the final purchase price.
3. Work out a Trade
Within your budget, you can pay for real-estate by bartering another piece of property or possibly a specialized skill you’ve. For instance, a contractor could give a real-estate developer labor in return for a down payment.
Other possessions you may offer to swap include motor homes, campers, boats, cars, large appliances, valuable artwork and furniture.
For any virtually bartering deal, write up a legal agreement with an attorney specifically stating the value of the items from the trade. Some other appraisal are usually necessary if you’ll need an outside appraisal.
4. Take Over Home Loan Repayments.
If you would like to invest in real estate in Nigeria, but you can’t pay the down payment, offer to take over the home loan repayments in exchange for the deed. However, you will need to investigate the existing loan prior to making this kind of offer. Some home mortgages or home loans have specific language preventing such a transaction. Be careful before you trade in this kind of strategy, particularly those advertised for sale by owner.
You might like to offer to take on the seller’s other debts like credit card payments as opposed to a down payment. This really is something you could pay off over time. Make sure the agreement is written, as you don’t pay the credit cards by the due date the seller’s bank account will probably be negatively affected and the creditor will come after you. Keep in mind that this strategy is a new development that banks in Nigeria are introducing to lenders.
5. Borrow Money from Friends.
If you have little or no money on hand and you want to make a real estate investment, borrowing money from family and friends is another option. Be sure you jot down the official promissory note with payment dates, interest rates, and what ownership, if any, the lender will have from the property.
If you repay the loan by the due date and with interest, they could possibly be ready to give loan to you again for future projects.
Consider whether or not the relationship you’ve with your lender might be harmed if you were not able to repay the money. Ponder in your mind if securing property may be worth endangering your relationship with someone you call your best friend.
In conclusion, just like any investment, investing in property/real estate carries risk. Some people have done perfectly well doing this as ways of making money, but others have lost money. Buying property with little or no investment will lessen and not eliminate such risk.
Just know that under the very best of circumstances real estate carries many inherent risks that other kinds of investing tend not to.