Do you want to buy land in Lagos? This article is about what to know before buying land in Lagos before you commit your money, time, and energy.

As of 2024, Lagos was the 5th richest city in Africa. The average real estate investor will see these figures and decide to buy land in the city.

But it is very risky to rush into real estate investment and to make mistakes in it because the money involved is usually big.

In this article, I will show you:

  1. What to consider when buying land in Lagos Nigeria
  2. 5 mistakes you must never make when buying land in Lagos
  3. Documents to consider when buying land in Lagos

 

Why Should You Buy Land in Lagos?

  1. Lagos state is the economic powerhouse of Nigeria
  2. It has a GDP (Gross Domestic Product) of about ₦41.17 trillion
  3. It has a major port for Nigeria and West Africa
  4. Lagos is Nigeria’s largest commercial, industrial, fashion, and innovation hub
  5. It’s the 5th richest city in Africa

 

5 Things To Consider When Buying Land And Other Properties In Lagos Nigeria

As a real estate expert, I meet a set of people online and offline every other month. They always come to me crying that they were duped when buying land in Lagos.

Your hard-earned money deserves more than to be carted away by dubious real estate investment. 

Here are 3 things that you must consider if you want to invest in buying land in Lagos.

  1. Location

Location is one of the most vital things to consider before you buy land in Lagos. There is the Mainland, there is the Island. You must understand how the real estate market works in your target investment location so that you can make smart investment decisions.

You need to know about the average cost of land and other properties in the area as well as the perceived resale value in that area.

Whether your investment will appreciate fast or slow is all dependent on the location.

Knowing a location helps you to consider the infrastructure and amenities available within the community. This includes the proximity of the land to the market, the highway, and good schools. You should also check to see if the land is prone to flood.

When you see that there is a flood problem, don’t buy it! 

Another special tactic I advise investors to use is to directly network with the community in which they want to invest or engage a professional. Many times, you don’t get real information online in Nigeria, You have to get into the business of finding out yourself and a professional can do that for you.

Interacting with the community or a professional can help you find amazing off-market land deals or insider knowledge on upcoming developments that could directly impact the value of property in the area.

All of these factors can directly impact the value and appeal of your land in the future to leasees, buyers, or other investors.

Also, do your due diligence to know the legal and regulatory frameworks that surround land ownership in Lagos. You should know how to obtain permits, pay taxes, create lease agreements, and also prepare for any other legal headaches that come with investing in Lagos real estate.

    2. The Nature of Your Market

As of 2022, Lagos had over 15 million residents. That is huge for a small state and it shows how dynamic that market can be. However, the presence of a huge population does not equate to the availability of demand for land in specific areas of the state. 

For instance, if you buy land to build a residential property near a market that is heavily commercial, you may be targeting the wrong audience. Instead, you should have bought the land in the quieter residential parts of the area.

This is one of the many things know or consider when buying land in Lagos.

Another example is to study the kind of property that appeals to certain locations. Ikoyi and Lekki lands appeal to luxury real estate buyers. Ikorodu, Badagry, and Epe cater to people who want to develop property for middle-income earners.

As an investor, you must align your investment goals to meet your needs and budget or the needs and budget of the audience you want to reach.

     3. Specific Industry Trends

After knowing what the market needs, you also need to know what the real estate industry offers per time. You must understand new provisions of real estate laws as soon as they are amended.

Look out for government policies, infrastructural development, and global economic conditions that can either boost or reduce your real estate ROI in the future.

For example, the Lagos Red Rail will have a direct impact on real estate demand on the mainland.

However, while it may look attractive to invest in high-end areas like Ikeja, Agege, and Yaba, it may be better to look for other options in Agbado, Ikorodu, Badagry and Iju which have more available land and are less expensive to purchase.

These tiny real estate trends and statistics in land price movement and resale yields can make huge differences when buying land and other properties in Lagos. 

     4. The Financial Aspect of Property Investment

One of the important reasons you must research your target location and market is to help you discover the financial implications of investing.

From your research, you must be able to create a budget that will cover costs such as your initial purchase price, cost of property maintenance like perimeter fencing, property management fees such as security, insurance, and other local taxes.

A financial plan guides you through the duration of your investment and keeps you prepared for expenses that you have not planned for.

Another thing you should consider is the potential real estate return on investment (ROI). Be sure to calculate your expected income against your total investment to determine if the property is financially viable. 

Research the average current resale prices and value of property in the area. Also, consider factors that could affect future rents, such as possible natural occurrences, economic outlook, and local developments. 

Also, discover the market’s historical performance. This gives you insight into what you expect as the yield from land appreciation over time.

Lastly, consider the financing options available to you. Will you be able to get a loan? If you do, do you have a good collateral? What interest rate are you comfortable with and what banks provide these rates?

Calculate how much you can afford to borrow as a company while considering your down payment, your investment expenses, the ongoing cost, and your expected projections for the land. 

    5. Legal Considerations When Buying Land in Lagos

Understanding the legal landscape of Lagos real estate property investment will help you get a smooth transaction and also secure your investment.

The first step is to understand the various types of land ownership available in Nigeria, such as freehold and leasehold. 

Freehold ownership gives outright ownership to you as the owner of a land. On the other hand, leasehold ownership only transfers ownership rights for a specified period as agreed between a lessor and a lessee.

Knowing the difference between these two concepts will help you make informed decisions regarding property purchases.

It’s also important to conduct due diligence on the property before finalizing the purchase. 

Verify the ownership of the property. 

Ensure that there are no legal disputes or encumbrances on the land or property.

Use a reputable real estate lawyer to guide you through your transactions. They see things from a different perspective and help you navigate legal pitfalls when drafting and reviewing contracts.

Obtain all necessary permits and approvals. Also, be aware of the the property tax and other fees that are attached to owning a land within Lagos

Read: best places to invest in real estate in Nigeria

5 Common Mistakes to Avoid When Buying Land in Lagos

As established, the Lagos property market is huge but as an investor, there are mistakes you must avoid so you can get the best out of the market when investing in Lagos real estate:

  1. Neglecting Due Diligence

One big mistake real estate investors make is neglecting to do legal due diligence. As I mentioned earlier, hire a real estate lawyer that has a history with cases.

Preferably, use a lawyer whose service you trust and whose decision you can always rely on. The best way to avoid any future legal battle is by having a strong legal foundation.

      2. Buying directly from Omo Onile (indigenous land owners)

Lagos real estate is porous especially when you buy directly from the indigenous land owners. Yes, it can be cheaper to buy directly from them but I can assure you that you’ll pay more eventually and you can still end up losing the land and your money.

The most painful part is that it’s difficult to recover your money as you may not have anybody to arrest or sue.

Instead of buying land from Omo Onile, I advise you buy from a reputable real estate company that has a person or people of integrity behind the brand.

      3. Not Using Professionals

Finding your way around land acquisition, especially in Lagos can be a daunting task. You need the help of professionals like a lawyer, a surveyor, and a real estate agent to navigate your way into buying a problem-free land in Lagos.

Hiring professionals does not come without a cost but in the end the cost is worth it.

      4. Failing to Budget 

Sometimes, the thrill of profit-making blinds investors when it comes to buying land. They do not consider expenses from research, purchase, perimeter fencing,  and maintenance fees.

Hire an accountant to create a detailed financial plan with you. Let it contain both your initial purchase costs and ongoing expenses so you can have a sustainable investment strategy.

      5. Hurried Decision-Making

Lastly, some investors may rush into a purchase due to the fear of missing out on a perceived opportunity. This impulsiveness leads to poor decision-making and regrets later.

Take your time. Research till you are sure. Evaluate your options. This reduces your likelihood of making choices that will ruin your investment in the future.

 

Read: top 9 cities to invest in Nigeria

Documents to Consider When Buying Land in Lagos 

When you buy land in Lagos, there are 4 vital documents that you must have to secure your investment. You can present these land documents in future if there is a contest over the ownership of the land:

  1. Deed of Assignment

I put this first because it is the most important of all the documents. If you have the remaining three and you don’t have the Deed of Assignment, someone else who has it can easily claim ownership in court.

The deed of assignment is a document that shows the final agreement between the buyer and the seller.

It is the only document that shows the permanent transfer of title from the seller (assignor) to the buyer (assignee). 

 

       2. Survey plan/layout

The Survey Plan shows specific details of your land such as its size, boundaries, and location. You are required to register it at The Office of the Surveyor-General so it can be referred to in future to know if the land is owned by the government or by a private individual.  

 

        3. Purchase Receipt

This is evidence that you paid for the land. It is given from the seller to the buyer to show that they were paid for the land. Before you can register your land at the Land Office, you must produce your receipt.

 

       4. Certificate of Occupancy/Governor’s Consent

The C of O shows actual ownership under the law. It is issued by the Governor of the state, acknowledging that interest had been taken in one of the lands in that state. 

The governor transfers the statutory right of ownership from his office to the individual buying the land.

However, if you are buying the land from someone who already has a C of O, you would not need to obtain another. You will only need the Governor’s Consent on your Deed of Assignment. 

 

Final Thoughts on Buying Land in Lagos

Buying land in Lagos can be as exciting as it is profitable. Prospective buyers are always available around the clock. 

But you can only be successful at real estate investing in Lagos when you:

  • Research your target location
  • Do your due diligence about the land
  • Discover and leverage industry trends
  • Know the total financial costs of your investment 
  • Tick all the legal boxes before you sign the papers

Don’t make the mistake of investing in a hurry or not making a budget. 

By applying the smart tips outlined in this article, you can begin your real estate investment in Lagos with confidence and assurance that your money will yield a good returns and your investment will be protected.