Investing in renovation properties can be a lucrative venture, especially in a thriving real estate market like Nigeria. Renovation properties offer the opportunity to add value and maximize returns on investment. However, finding the right location to buy renovation property is crucial for success.
In this comprehensive guide, we will explore the top cities in Nigeria where you can find renovation properties, factors to consider when choosing a location, and tips for purchasing and renovating properties in Nigeria.
Top Cities for Renovation Property in Nigeria
Lagos
Let’s start our list of top cities for renovation property in Nigeria with the undeniable real estate hotspot: Lagos. As the bustling commercial capital of Africa’s largest economy, Lagos offers immense opportunity but also significant challenges that seasoned investors have learned to navigate.
While the city’s notorious traffic and high population density might turn some away, savvy property flippers know that Lagos remains one of the most promising markets on the continent. Simply put – the demand for housing far outweighs the supply in this fast-growing megacity of over 20 million.
This imbalance creates ample room for smart renovators to swoop in, spruce up neglected properties, and flip them for a healthy profit. Of course, you’ll need resilience, flexibility and deep pockets to succeed in Lagos. But those willing to handle the headaches are often well rewarded.
One key advantage is Lagos’ vibrant economy fueled by industries like finance, media, and technology. Well-paying jobs mean a steady stream of potential tenants and buyers. There are many reno projects in the high-income Lekki and Victoria Island areas that would turn a 50-100% return within a year.
Naturally, competition is fierce in Lagos. So another proven strategy is focusing your renovation efforts outside the most expensive neighborhoods. Surulere and Ikeja still offer convenience along with slightly lower price points and redevelopment potential.
Abuja
While Lagos maintains its alpha status, many investors are now turning keen eyes to another rising Nigerian city: Abuja. As the administrative and political center, Abuja has experienced explosive growth since replacing Lagos as federal capital in 1991.
This growth shows no signs of slowing as the population swells past 3 million. Major infrastructure projects, relocation of government agencies, and an influx of high-paying jobs fuel relentless demand for quality housing. Savvy renovators are cashing in on the shortage.
Unlike Lagos, Abuja offers a more organized urban layout and lower population density that appeals to many. Properties here also tend to be larger with more land. While upfront renovation costs may be higher, achieved sale prices make it worthwhile.
The high-end Maitama, Asokoro and Wuse districts see the most rental and capital appreciation. But value can still be found in up-and-coming areas like Garki, Utako and Jabi. Proximity to federal agencies and embassies is a definite plus.
Port Harcourt
As Nigeria’s oil capital, Port Harcourt has long driven the economy of Rivers State and the entire Niger Delta region. However, years of instability and neglect have taken a toll on this once-booming city.
This is where opportunity arises for renovation-focused property investors. With security improving and a new focus on non-oil sectors, Port Harcourt is poised for a comeback. Early signs include ongoing infrastructure projects and the recent African Petroleum Producers Organization headquarters construction.
Many prime waterfront and commercial buildings from Port Harcourt’s golden era in the 1970s-90s remain. With some TLC, these structures can regain their former glory. Renovating and leasing refurbished office space to the growing number of oil firms and contractors is one proven strategy.
Residential areas like Old GRA, Trans Amadi and Elekahia also harbor unrealized potential. With its large expatriate community and status as Rivers State capital, Port Harcourt ensures a steady stream of tenants and buyers. Those who establish a presence now will be ideally positioned as the city’s revival gains momentum.
Kano
Rounding off our top 5 is the historical city of Kano in Northwestern Nigeria. As the commercial hub of the North, Kano has long driven trade and prosperity across the region surrounding it.
Its status as a major transportation center between Lagos and neighboring countries like Niger, Chad and Cameroon fuels constant activity. Meanwhile, Kano’s booming industries like agriculture, manufacturing and services create a large middle class population.
All this economic activity translates to strong, consistent demand for upgraded housing. Renovators can capitalize on the shortage by refurbishing structures in the historic city center or outer planned neighborhoods. The Sabon Gari and Nasarawa areas near the airport see some of the best returns.
Kano’s large population and position at the heart of Northern commerce ensure a steady stream of tenants and buyers. Those willing to take on renovations of larger, more complex structures are especially well-positioned as demand intensifies. With patience and local expertise, Kano can deliver sizable gains.
Anambra State
Located in southeastern Nigeria, Anambra State is a bustling commercial and industrial hub driven by sectors like agriculture, manufacturing, and trade.
Its capital city of Awka sees significant government activity and employment. Meanwhile, Onitsha is a major inland port and market town attracting constant commerce.
These economic engines fuel strong demand for upgraded housing across the state. Beyond the cities, towns like Nnewi, Agulu, and Obosi are renowned manufacturing and trading centers. Their growing middle and upper classes present opportunities.
Renovating neglected structures in high-demand urban or peri-urban areas can yield returns, especially targeting the large expatriate community. Proximity to nearby states like Enugu, Delta, and Imo also expands the potential tenant and buyer pool. With steady economic growth, Anambra shows promise.
Ogun State
Situated in Southwestern Nigeria along the Lagos border, Ogun State has evolved into an important industrial zone attracting major investments. Its proximity to Lagos and location along major transportation corridors make it highly accessible.
The capital Abeokuta and main city Sagamu have grown considerably on the back of thriving sectors like agriculture, manufacturing, and construction materials. This fuels relentless demand for quality housing options across various budgets.
Renovating structures in high-growth urban centers or strategic towns along the Lagos-Ibadan expressway presents opportunity. Targeting the large industrial workforce with upgraded apartments and townhouses ensures stable occupancy.
Proximity to Lagos also allows leveraging its massive economy and spill-over effects. With its strategic location and improving infrastructure, Ogun State shows strong potential for renovation property returns.
Factors to Consider When Choosing a Location
There are certain factors to consider when choosing where to buy renovation property in Nigeria. Here are some of them:
Market Demand
Consider the level of demand for housing in the chosen location. Look for areas with a high population growth rate, job opportunities, and a strong rental market. A location with a high demand for housing ensures a steady stream of tenants and good returns on investment.
Infrastructure and Amenities
Evaluate the availability of infrastructure and amenities in the chosen location. Look for areas with good road networks, access to public transportation, schools, hospitals, shopping centers, and recreational facilities. These amenities attract tenants and add value to the property.
Security
Safety is a crucial factor when choosing a location for a renovation property. Research the crime rate and security measures in the area. Look for neighborhoods with a low crime rate and a strong security presence. A safe location will attract tenants and ensure the protection of your investment.
Future Development Plans
Consider the future development plans for the chosen location. Look for areas with ongoing or proposed infrastructure projects, such as road expansions, new commercial centers, or government initiatives. These developments can positively impact property values and rental income in the long run.
Tips for Purchasing and Renovating Properties in Nigeria
Conduct Thorough Research
Before purchasing a renovation property, conduct thorough research on the property’s history, legal documentation, and potential issues. Engage the services of a reputable real estate lawyer and conduct a comprehensive property inspection to identify any structural or maintenance issues.
Set a Realistic Budget
Set a realistic budget for both the purchase and renovation of the property. Consider all costs, including purchase price, renovation expenses, legal fees, and taxes. It is essential to have a clear understanding of the total investment required to avoid financial strain during the renovation process.
Engage Reliable Professionals
Work with reliable professionals throughout the purchasing and renovation process. This includes real estate agents, architects, contractors, and interior designers. Choose experienced professionals with a track record of successful renovation projects to ensure a smooth and successful renovation process.
Obtain Necessary Permits and Approvals
Ensure that you obtain all necessary permits and approvals from the relevant government authorities before starting any renovation work.
This includes building permits, environmental impact assessments, and approvals for structural changes. Non-compliance with regulations can lead to legal issues and delays in the renovation process.
Focus on Quality and Market Demand
When renovating a property, focus on quality and market demand. Understand the preferences and needs of the target market and renovate accordingly. This may involve upgrading the kitchen, bathrooms, flooring, or adding modern amenities that appeal to potential tenants or buyers.
Consider Property Management
If you do not plan to manage the property yourself, consider hiring a property management company. A professional property manager can handle tenant screening, rent collection, property maintenance, and other day-to-day tasks. This allows you to focus on other aspects of your investment portfolio or pursue other opportunities.
Plan for Marketing and Rental Strategies
Develop a marketing and rental strategy for the renovated property. Consider the target market, rental rates in the area, and property features that can attract tenants. Utilize online platforms, social media, and local real estate agents to market the property effectively and secure tenants in a timely manner.
Regularly Monitor and Evaluate
Once the renovation is complete and the property is rented, regularly monitor and evaluate its performance. Keep track of rental income, expenses, and tenant satisfaction. Make necessary adjustments to ensure the property remains competitive in the rental market and continues to generate a positive return on investment.
Conclusion
Purchasing and renovating properties in Nigeria can be a rewarding investment strategy when done strategically. By choosing the right location, conducting thorough research, and following the tips provided, you can maximize returns and create a successful renovation property portfolio.
Remember to stay informed about market trends, seek professional advice when needed, and adapt your strategies to meet the evolving demands of the real estate market in Nigeria.
