Do you want to know how to invest in real estate in Nigeria? Then, read this. 

This article contains everything you need from start to finish.

The biggest fear beginners have when investing in real estate is losing their hard-earned money.

And this fear is true!

I have met many people who come to meet me, saying that they have lost all their life savings in a real estate deal. Many times, they have seen deals that are too good to be true, and they jump at them.

But that is not how real estate investment works in Nigeria.

If you truly want peace of mind when investing in real estate, you must take safe steps that will help you not to fall into common traps.

In this article, I will answer the questions

  • How does real estate investment work in Nigeria?
  • What red flags should I  avoid in real estate investing?
  • What are the best places to invest in real estate as a beginner in Nigeria?

NOTE: Everything here is a product of years of investment, and also showing people how to invest. If you use it, it will work. If you don’t, I can’t say.


Come with me

Understanding How Real Estate Investment Works in Nigeria 

Real estate investing in Nigeria is simple and direct. But to a beginner, it may look complex.

I will show you the basics.

There are two major ways you can make money in the Nigerian real estate sector: appreciation and rental income.

  • Appreciation

With appreciation, you simply buy land or property when the price is still low. Then you wait till the price of the property appreciates. 

This increase in property value comes as a result of different factors such as urban development, accessibility, location, and government projects.

In this article, I highlighted 5 things you must check to know how fast a property can appreciate.

Some of them include:

– Location of the land or property

– Government Projects

– Road Accessibility

– General development 

– Increase in population

  • Rental income

Rental income is another way to make money in real estate in Nigeria.

Here, you simply lease your land or building to someone who will occupy it for a specified time for a consistent monthly or yearly income.

You can lease your land for farming, and get paid in both cash and kind (in the form of farm produce)

When you lease a building, you can get any form of payment, including

  • One-time rent for shortlets (Airbnbs) and Hotels
  • Yearly rent for living apartments  

If you can combine both rental income with appreciation, you have a guarantee of both long-term and short-term RoI.

However, because property development is very costly, I always advise beginners to start with land banking. This is simply buying land in underdeveloped but promising areas and holding it until prices rise. 

The good thing about buying land in Nigeria is that you don’t need millions upfront. 

Many real estate companies in Nigeria offer monthly instalment plans that allow you to pay over time. But if you buy land using this system, ensure that you check the company’s history of offering such services.

Also, be sure to verify their land documents to know if they are legitimate. 

Where to Start: The Beginner’s Path to Property Investment 

Location is not the only thing you should think about when buying a property. As a beginner, there are other factors that you must consider to have a successful real estate investment.

If you can tick all of these boxes, you have a guarantee of strong profit in the long term:

  • Location and Accessibility

The location of your property directly affects the value and the appeal of your property.

Go for areas that are closer to essential amenities such as schools, hospitals, markets, and public transport systems.

These properties tend to appreciate faster because there is a greater population there.

  • Funding 

Am I financially ready to buy real estate?

One of the first questions you must ask yourself is if you are financially ready to start investing in real estate.

If you want to start buying with your own money, are your earnings and savings enough yet?

If you want to take loans from banks, are you creditworthy enough?

Create a realistic budget that covers the purchase price, as well as other additional costs like legal fees, survey plans, and agency commissions.

  • Market Factors

The real estate market in Nigeria changes fast because of fluctuating market prices due to supply, demand, and economic conditions.

To get an idea about this, research the recent value of property in your target location. 

Also, check to see the demand for properties in that area. 

Where you see that the cost of land or property in that area has been climbing steadily and there is rising demand, it is a good indicator of a place that is worth your capital input. 

  • Government Policies and Regulations

You should get to know government policies that directly affect real estate in Nigeria, such as land use laws, taxation policies, and housing schemes.

The Land Use Act, for instance, regulates property ownership. This helps you to confirm the legitimacy of the property title. 

Also, take advantage of any government incentives, such as affordable housing programs. It helps you to cut down costs and maximize returns.

  • Purpose of Investment

It is vital to understand why you want to buy the property.

Are you purchasing it to live in?

Are you getting the land to lease out to a farmer while it gathers interest?

Do you want to hold your investment for long-term capital gains? 

  • Legal Documentation and Verification

Nigeria’s real estate market can be very fraudulent when it comes to transactions and land title.

When you want to buy real estate, ensure that the property meets the following criteria:

  • Has property documentation such as Deed of Assignment and Certificate of Occupancy (C of O)
  • There is vivid possession. If you are buying from a family, make sure you are transacting with the leader of the family and that they have the backing of the principal members of the family.

Don’t close any deal all by yourself.

Always engage the services of a qualified real estate lawyer to conduct due diligence, verify ownership claims, and confirm the property is free from encumbrances or litigation.

Avoiding Common Mistakes: Protect Your Investment

Many people lose money because they rush to buy land without verifying the title. 

But you should not make mistakes like these because of the fear of missing out. Instead, take time to research about the investment types very well before you start investing.

Here are 6 mistakes that people make when they invest in real estate in Nigeria:

1. Skipping Due Diligence

This is the biggest mistake most investors make when they start, and because of this, they keep losing a lot.

Your first duty is to verify the authenticity of property documents and the ownership status. This can help you avoid fraud and many other legal implications.

Always hire a lawyer and other experienced professionals who can help you verify land documents.

2. Ignoring Market Research

Market research, such as market trends, property appreciation rates, and demand, can result in poor investment decisions. 

Ensure you check for areas with high demand and that also have good infrastructural development and economic growth before investing.

3. Keeping Non-Paying Tenants

The fastest way to destroy your investment is getting emotional and allowing non-paying tenants to stay too long in your property. 

It often starts with a minor delay, with excuses like unpaid school fees or salary delays.

Just imagine if you were a bank, you’d reclaim your property without hesitation. Apply the same principle to protect your investment. Cash flow is key to survival as an investor.

Make sure you do the following to keep your rent intact and your tenants in check:

  • Set and enforce eviction rules
  • Act legally and quickly
  • Avoid emotional attachment to property
  • Know your target market and face them only

4. Underestimating Total Costs

Many first-time investors only focus on the purchase price. You should also prepare for other costs like legal fees, taxes, agency commissions, and maintenance expenses. 

Budgeting for these costs makes you financially prepared and gives you peace.

5. Giving Your Property Without Payment

Sometimes, as an investor who is into land banking, you may permit someone, especially an artisan (e.g., mechanics, block makers), to stay on idle properties for security.  This is a big mistake in real estate. 

If the landowner passes away, the occupant may falsely claim ownership, rent out portions, or deceive potential buyers. 

And because the occupant has stayed long enough on the land, the community will perceive that they own the land, making legal battles challenging.

The best solution to this is to:

  • Charge rent (however small)
  • Draft a written agreement
  • Keep payment records

6. Not Defining Investment Goals

Don’t do real estate investing because you heard that “there is money there.” 

Instead, invest with a clear goal in mind. Do you want rental income, resale, or long-term appreciation?

Skipping your goals can result in poor decision-making and reduced returns. Set clear investment objectives before purchasing any property.

Best Places to Invest in Real Estate in Nigeria

One of the best ways real estate makes money for investors is through RoI from promising locations.

If you are looking for the best places to invest in real estate in Nigeria, you should consider any of the locations below. 

This is because they promise better RoI as a result of their infrastructural development, growth, potential for growth, and overall desirability by people moving from most parts of the country.

1. Lagos: The commercial hub and real estate hotspot

Lagos is practically the capital of commerce in Nigeria, and this makes it a convenient location for people to live in.

The city is vibrant with multiple sectors such as technology, finance, entertainment, and manufacturing.

This diversity creates a big demand for residential properties, especially for workers. 

Locations such as Victoria Island, Lekki, and Ikoyi are known for their commercial demand due to the need for luxury apartments, retail outlets, and office spaces.

One of the encouraging facts about real estate investment in Lagos is its rapid infrastructure development. Some of these include 

  • The Lagos Rail Mass Transit 
  • The Lekki Free Trade Zone 
  • The Fourth Mainland Bridge

All of these are designed to ease transportation and encourage accessibility.

 

2. Abuja: The Capital City and Emerging Real Estate Market

Abuja has the perfect blend of political strength and real estate capacity. It is mostly made up of government workers and expatriates, creating an increased demand for housing.

Unlike Lagos, Abuja contains a lot of luxury real estate in places like Maitama and Asokoro.

On the other hand, there are other affordable housing options in neighborhoods like Kubwa and Gwarinpa, which cater to middle-income families.

 

3. Port Harcourt: The oil-rich city with investment potential

Port Harcourt is another one of the best places to invest in real estate in Nigeria. 

Because it is the oil capital of  Nigeria, Port Harcourt provides several investment opportunities for expatriates and professionals. 

So, if you are looking to find a real estate market within Nigeria, you should invest in Port Harcourt.

Here, you will find standard government workers who can afford middle-income properties.

You will also find top civil servants and oil industry personnel who can afford luxury apartments.

Check out these areas in Port Harcourt before you start investing in its real estate.

  • Areas around and in Old GRA and New GRA: Popular for high-end apartments and expensive land
  • Diobu and Eagle: More affordable for investors and residents alike
  • Key areas with major government projects such as Echie (PH Ring Road) and Eleme (the PH Mega City).

4. Ibadan: The Buy-Low, Sell-High Investment Market

The Ibadan real estate market is unique because you can easily buy low and sell high. 

If you want to invest in real estate in this city, you can get huge investment potential for an affordable investment deposit. 

Unlike Lagos and other prime cities within Nigeria, Ibadan generally offers a lower property price. And this makes it a top attraction for first-time investors.

Ibadan is also a great place to invest in because many Lagosians are looking to relocate to more affordable areas. It also has an excellent public transport system and a fast-expanding road network.

 

5. Uyo: The Land of Real Estate Promise

Uyo has a population of 1.4 million people, and houses multiple housing projects such as the Shelter Afrique and the Ewet Housing Estate.

What makes Uyo unique is the presence of two industrial estates that create a steady supply of tenants as a result of work immigration.

Also, the construction of major roads and the Uyo International Airport has opened the state up to multiple economic possibilities.

Like Lagos and Abuja, Uyo is split into two real estate investment locations. The high-end areas include the areas around Ring Road linking to Nung Ete, locations around the Ewet Housing Estate, and the Osong Ama Estate.

 

6. Asaba: Capital City of Real Estate in Delta

Asaba has evolved into one of the fastest-growing real estate investment locations in Nigeria. 

Its position as the state capital and its proximity to Onitsha, an ultra-commercial hub, has led to increased demand for residential and commercial housing.

Compared to other states in Nigeria, Asaba affords one of the most affordable land and property investment opportunities.

If you are considering investment in Asaba, you should go for places such as 

  • Okpanam, which is popular for link roads, the presence of the State Assembly, and the Asaba Shoprite Mall
  • GRA was built to cater to high-end earners.
  • Ubulu-Okiti is a transit town that connects Asaba and Benin. Its huge land availability makes it one of the best places for land banking in Nigeria.
  • Ogwashi-Uku: Home to the Delta State University College of Education (DELSUCOE), this location promises huge rental property returns. And this extends beyond students. It is sought after by many residents for its relative serenity.

If you want to know more about where to invest in real estate, check out this detailed guide

The Power of Instalments in Nigerian Real Estate Investment 

America and the UK have their mortgage systems that allow homeowners to acquire property over many years. This barely operates in Nigeria, but what works instead is the instalment payment.

Many Nigerian real estate companies allow you to lower your risk per time by paying for your land or property in instalments. And this is great because it allows many people to become homeowners and landowners despite not earning too much per time.

This system is great for youngsters also who may have a hard time saving their income to become a lump sum.

I started this same system 3 years ago when I started allowing youngsters and career professionals to pay in bits for land.

In those years, I have seen students on allowance and professionals on their first-year salary being able to become landowners.

 

Conclusion: Invest Smart, Not Just Fast

One of the best ways to invest in real estate in Nigeria is to start with a goal in mind.

 Real estate investment in Nigeria is one of the best ways to grow your wealth—but only when you do it with the right mindset and goal.. 

You may choose to buy your first plot in Ibadan

You may decide to explore the booming demand in Port Harcourt

And you may have decided to go to the luxury market in Abuja…

One thing is clear: strategy beats speed.

You now have a full map on how to invest in real estate in Nigeria, including

  • What to avoid
  • What to look for, 
  • Where to invest, and 
  • How to protect your money. 

The question is, will you use it?

Take your time, verify every deal, and work with professionals. Don’t compare yourself to others and then let the fear of missing out rush you into losing out.

Remember, you don’t need to have millions before you start. You only need the right information and the discipline to use it. And now, you have both.

The next real estate success story could be yours. Why not?