Top 7 Types of Real Estate Investment in Nigeria

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Having an in-depth knowledge about the different types of real estate investment in Nigeria is a strong determinant to whether you’ll succeed or fail in the real estate market.

One of the biggest testimonies I have heard about real estate investment in Nigeria is that it is one of the country’s most stable and profitable income sources. But that only works when you know how to combine the best types of real estate investment.

If you want to make the most profit, you have to diversify.

The reason I always advise people to diversify is because of inflation.

If you plan to go all into real estate investment, you must be able to set up plans that will help you in the long and short term to get steady cash flow and long-term equity.

If you are a new investor looking for where to start, you can make long-term plans across these 7 channels.

1. Land Banking

In the crypto industry, investors are sometimes advised to buy and hold. Land banking is the buy-and-hold of real estate.

With land banking, you simply invest in specific locations and then wait for a long time for it to appreciate.

This kind of land is usually virgin, that is, unexplored, but developing, and it is best kept for long-term investment.

But there is a way to select lands for long-term investment. Look out for these factors:

Where are real estate companies buying and keeping land?
Where is the government looking to start some infrastructure
What “remote” part of your state are people constantly relocating to

If you can answer these 3 questions, you have found your treasure!

Why Does Land Banking Work So Well?

It is the cheapest way to start real estate investment in Nigeria
It only requires your patience. You don’t need the extra costs of maintenance
You can get RoI of up to 10x your investment in a 5–10-year window
You have little or no risk attached. Just buy your land, get your documents, and watch it grow.

2. Land Flipping

This is another version of land banking, but it involves a shorter waiting time.

With land flipping, you simply buy land in an area that is already open to development and sell it after the value appreciates.

Unlike land banking, you will need to spend a lot more money to start. Where a plot in an undeveloped area in Ibadan may cost 800,000 for land banking, a plot in Epe may cost up to 5 million.

But you will get your money back faster with the land in Epe.

The reason for this is that the kind of land you buy for land flipping is already open to development. Government projects have started, and people are already building homes, schools, restaurants, and bars.

Why is Land Flipping So Reliable?

The land appreciates fast because of its location
No maintenance costs, too!
You can do it with little capital using installment plans.

3. Rental Property Investment

Nigeria has a housing deficit of over 28 million units! This shows you that rental housing is and will still be in huge demand.

Rental property investment involves building or buying property and renting it out monthly or yearly. You can make money in different ways as a rental investor in Nigeria.

Rents from multi-year leases

This usually happens when you lease out a whole building to a company like banks for a period longer than one year.

As such, they handle everything from maintenance and repairs, depending on the contract.

Rent for a one-year lease

This is the most popular form of rentals. You simply rent out your building to a private individual or a business for just one year.

Short lets and Airbnb

This is becoming quite common. It involves renting out a flat or building for a short time, running from 1 day to 6 months.

This system is best done in cities like Lagos, Abuja, and Port Harcourt that have a steady flow of travellers and people seeking relaxation.

Why Is Rental Property a Smart Investment?

Guarantees steady passive income
Your property value increases even as you keep getting rent
Easier to scale gradually. (e.g., room-by-room development)

However, unlike land banking and land flipping, rental property requires more attention and more spending on things like maintenance, repairs, Land Use Charge, and renovations.

4. Real Estate Development

Development is where the big money in real estate is- but you need to learn it patiently before you can make the best out of it!

At development, you simply buy land, build commercial or residential properties on it, then sell or rent it out.

This is where we get structures like shopping complexes, luxury apartments, estate construction, and even the day-to-day “boys’ quarters”.

Why Does Real Estate Development Work?

It has a higher profit margin.
You can customize the properties to your preference
Faster resale value in high-demand locations

Note: Real estate development takes a lot of capital to execute. Besides just buying land, you will have to spend on other things like

Construction
Permits
Land use charge
Other unforeseen costs that being a Nigerian will attract

5. Real Estate Investment Trust

If you do want to escape the issues that come with owning and managing a property, REITs are a great place to start!

REITs are an investment style where different investors put their money together to build real estate assets. Then, they can generate income from these real assets through either the sale of land or buildings.

They can also get RoI through rent from the lease of residential, commercial, and industrial properties.

Benefits of Investing in REITs

It promises passive income. Put your money and sit back

You can diversify into multiple types of real estate faster, hence reducing your risk
Professionals help you manage the properties.
Nigerian regulations offer the advantages of reduced corporate tax for REITs

6. Commercial Real Estate Leasing

This is similar to real estate development, but here, you focus on commercial real estate.

Office spaces, warehouses, and retail outlets fall under commercial real estate. The rise of small and medium-scale brands in Nigeria has created a crazy market demand for offices.

If you see an office space today, if you don’t act fast, by tomorrow, it would have been taken by someone else!

This shows how viable the commercial real estate space is.

Benefits of Investing in Commercial Real Estate

It gives a higher rental yield
You get long-term tenants. Businesses don’t like changing location often.
Because of these, you have a more stable cash flow

Just like with residential real estate development, commercial real estate involves a lot of cost to build.

This is because you can only build these kinds of properties in already exposed areas, so you may need to spend more on even the most basic things, like land purchase.

7. Cooperative Real Estate Investment

This is very similar to REITs. The only difference is that members of a cooperative have more control over the properties than in an REIT, where you just invest and wait for returns.

This type of real estate investment is very popular among civil servants and other low to middle-income earners.

They come together and contribute money from their salaries monthly.

This helps them to reduce the financial burden they carry monthly.

These investments can take various forms, including

Direct property acquisition
Land banking
Shared ownership of rental properties.

Benefits of Investing in Cooperative Real Estate

Spreading payments over time makes it more affordable
Collective investment reduces the risk of individual exposure to financial loss
Cooperatives get access to better properties because they can negotiate as a registered group, not as an individual

Which Type of Real Estate Investment is Best for You?

Let me be real with you: everything boils down to money. And most Nigerians want to invest, but they don’t earn millions monthly.

But with real estate, there is always a type that accommodates your income level. Here’s a simple breakdown:

Earning Level	Best Real Estate Type
₦200K – ₦1m+	Land Banking (with instalment payments), Cooperative partnerships
₦500K – ₦1M+	Land Flipping (with instalment payments), Cooperative partnerships
₦1M – ₦5M+	Land Flipping, Shortlets, Cooperative Partnerships
₦5M+	Residential and commercial real estate development, Land Flipping (in high-brow areas, with installment payment),

Take This Real Estate Investment Test

I would like to give you a little test. It will help you map out your real estate investment journey in just 2 minutes. Get a little book and a pen to answer this question:

Which of these options describes why you want to buy real estate in Nigeria?

I want to buy and keep it for a few years, and then sell it
I want to buy and keep for my children
I want to buy to save my money from devaluation
I want to buy and build to live
I want to buy and build to rent
I want to buy one because my friends bought one recently
I want to buy because I understand how real estate works and what it can do for me

Tick off all the options that apply to you and send us your answers here.