How Real Estate Makes Money in Nigeria

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This article is about how real estate makes money in Nigeria

Nigeria is the first country that comes to mind when you hear the phrase “real estate investment in Africa”. This is because its ecosystem has made it easy for investors to make money in real estate.

BUT DON’T TAKE MY WORD FOR IT

There are stats to show for it…

Nigeria is one of Africa’s largest economies and is the most populated country on the continent.

It also had an average median age of 19 as of 2023, one of the youngest in Africa.

Nigeria also has one of the fastest-growing populations in the world, increasing by 2.52% in 2024.

BUT everything I just mentioned are facts. And they DON’T make you money in real estate.

In this article, I will show you

Niches to invest in real estate in Nigeria to make money
How to invest smartly in those niches
What to do to protect your investment

Ensure you read it to the end, I added one extra hack to identify the best locations to invest in Nigeria in 2025.

How to Make Money in Nigeria Real Estate

If you want to start making money in real estate, you must invest in specific niches first.

These niches will determine how much you make in the long run.

They will also determine how long you have to invest before you get returns on your investment.

Here are the 5 best Nigerian real estate niches I always advise people to put their money in:

1. Rental Income

Many children in the university today are there because their parents had rental properties that kept generating revenue for them for many years.

The great thing about building a property for rent is that all you need to spend is your property maintenance and land charges.

On the other hand, your rental income keeps increasing almost yearly, depending on the inflation rate.

You can build any of these 3 forms of rental income properties:

Residential rentals: For living only (apartments, duplexes, serviced apartments)
Commercial rentals: For living and operations-related business activities. These include office spaces and shopping malls
Short-term rentals: These are for short-term living agreements. An example is a Airbnb or a guesthouse

2. Land Banking & Property Appreciation

Unlike rental incomes where you buy land and develop it for rent, you only buy land and keep it until it appreciates. Land banking follows this formula:

L + A + S = P

Buy land + Let it appreciate + sell it = make your profit income

However, while this looks simple, there are factors you must consider when buying land. These include :

Location of the land: If you buy land to sell later, ensure you buy in a place that has the potential to develop. One of the clear signs is the rising population around the place.
The authenticity of the land: You must verify the ownership of the land before you start buying it. Where you cannot find the original owner of the land or the owners cannot produce the original document, don’t buy.
Development around the land: Watch out for development around your land. If you buy land in a thick forest in the North Central, you may not see any yield for the next 20 years. Instead, you need to look for areas with slight development and potential to attract other buyers

3. House Flipping

House flipping is another way real estate makes money in Nigeria. It involves reselling a renovated property.

If you want to flip houses, here is what to do

Buy a property that is unoccupied and needs renovation.
Renovate it with new additions like tiles, POP, and new kitchen sinks
Then put it back on the market for sales

House flipping is not so popular in Nigeria because people hardly leave their homes empty. But if you can keep finding properties like these through court or bank auctions, they can be a goldmine.

4. Real Estate Investment Trust

These are great alternatives to all other ways of making money in real estate.

Here, you come as an investor to add your funds to a company that acquires, manages, and generates income from various types of real estate investment.

Your investment will be more like a share in the company.

There are different types of REITs in Nigeria including:

Equity REITs: These focus on residential and commercial properties and earn return-on-investment through rent and long-term property appreciation.
Mortgage REITs: These REITs provide funding for property developers. They get dividends from the interest on the loans given to the developer who repays within an agreed period.
Hybrid REITs: Hybrid REITs combine the properties of both equity and mortgage REITs. Thus, investors can benefit from both property income and mortgage interest earnings.

However, there are some things you must watch for with REITs. While they may look great on paper with the promises of passive income, you need to do

Research and select a REIT company

Open a brokerage account
Monitor the company’s performance
Reinvest your dividends on investment to get compounding returns.

5. Land Flipping

Land flipping is another great way to make money in real estate in Nigeria.

Just like house flipping, land flipping involves buying a raw land in bulk at a discounted price and reselling at a profit.

The difference between land banking and land flipping is; land banking means you buy a raw land and keep it for years, from 2 years and above before selling or building on it.

While land flipping means you buy land and sell almost immediately.

To successfully make money from land flipping, you’ll need to add values to the raw land before selling.

Without this, you may not see a good profit margin from it.

7 Steps to Start Making Money in Real Estate in Nigeria

As you may have seen, real estate is a simple way to make money in Nigeria.

But if you take the wrong steps, you can lose both your capital and your profit…

Let me show you this routine I follow everytime I want to invest in any real estate project. It will help you too:

1. Define Your Investment Goals

Before you start investing in real estate, you need to know what you want to achieve. It can look like this:

I want to make passive rental income in 5 years from now
I want to make profit from my land’s long-term capital appreciation
I want to work my normal job but make money through REITs

You may also choose to go for quick returns from property flipping.

Break down your goals into short and long-term achievable phases. Also, consider factors like budget, target locations, and expected ROI.

2. Conduct Market Research

After creating your goals, you need to do your market research to know how well the market patronizes that sector.

Also check for other factors such as

Growth in the locality you are investing in
Legal regulations in the area
Demand for property
Other risks attached to your investment type.

In a place like Nigeria with very little online resources, I’d suggest you visit the area by yourself to ask the people living there about these factors

You can also speak to real estate agents that operate in the area to keep you informed.

3. Choose the Right Investment Type

One of the ways you can really make real estate money is by focus. When doing your research, you may do it in many areas, but fix your focus on one and carry on from there.

As I mentioned above, there are multiple options you can pick from including:

Land Banking
Short-Term Rentals
Real Estate Investment Trusts (REITs)
Residential Properties
Commercial Properties

4. Get Financing

Your next step will be to secure capital that will help you start and sustain your investment. You can use various means including:

Personal savings
Cooperative societies
Bank loans
Mortgages
Partnerships.
Joint Ventures

5. Work with Real Estate Professionals

Real estate is a very wide sector. You just can’t know it all. This is why you need to get as much guidance and support from professionals, no matter how experienced you are. Some of these professionals include:

Real Estate Agents
Surveyors
Lawyers
Accountants
Property Managers
Building contractors

6. Do Your Due Diligence

Before you finally buy a property, make sure you verify the legitimacy of the property and the seller.

Here are some important things you must look out for:

Land titles (C of O, Governor’s Consent, etc.)
Prior encumbrances or disputes
Physical condition of the property
Development plans in the area

Read also: The Complete Guide to Real Estate Investing in Nigeria

7. Manage Your Property Effectively

To manage a property effectively, you must regularly maintain it, collect your rent on time, and comply with housing laws of the state your investment is.

But that is not all

Also, include management that can help you to maximize profitability. These efforts should include:

Renovations
Upgrades (attaching newer fixtures and fittings to increase your property’s value)
Expansion (if you have extra land space)

As You Start Your Real Estate Investment Journey…

I have been investing in real estate for years now…and I know that it pays.

But the difference between the investor who makes money and the one who doesn’t is simply information…

In this article, I have shown you the basics to making money in real estate in Nigeria.

You have also read the steps you ought to take to start your journey as a smart investor…

But it is not enough to read these, you must take action.

Do well to do your research before you start investing.

If you would like to make money in real estate in Nigeria, send an email to info@possilaproperties.com