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Tips for Making Money Off your Property

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tips for making money off your property

The real estate market in Nigeria holds vast potential. According to the World Bank’s 2016 open data, the current urban growth rate is 4.3% per annum. But Nigeria’s urban population growth is projected to have doubled by 2037. 

In recent years, major cities such as Lagos, Ibadan, Kano, Port Harcourt, and Abuja have grown significantly in urban development and real estate value. As a result, one of the best investments Nigerians should begin to consider in the real estate sector. 

Some factors identified for this growth in real estate property include population growth, urbanization, and a growing middle class. The external factors may consist of the economic and political climate. However, location is a vital determining factor in real estate investment. 

On the other hand, this expansion brought new challenges, such as rising real estate prices, limited access to finance, and inadequate infrastructure. So, whether you are a potential investor or a homeowner in Nigeria, there are certain factors you must hold in high regard.

This article focuses on how you can earn money from owning real estate properties in Nigeria. But before you start thinking about making money, you must understand how the market runs. 

3 Things to Learn before You Begin to Earn from Real Estate

There are three critical factors that you must understand concerning real estate property in Nigeria. 

1. Risk

The real estate market comes with some risk too, but you can insure the property with a credible insurance policy. The insurance company will evaluate the likelihood of such risks and draft a package suitable for the property’s worth.

For instance, what happens in the case of a fire, flood, or other natural catastrophe? You must therefore acquire an insurance package that covers all these risks. 

2. Length of time

The real estate market is not a get-rich-quick scheme; it requires steady and consistent work over a period before it produces returns. So get a hold of this process before you invest in a real estate property. 

3. Renovations and Maintenance

The third factor is ensuring you have not yet started a project you cannot manage. Real estate property investment is more than just construction; it also involves renovations and maintenance. Meanwhile, don’t undermine renovations because they could be minor or significant for your property. 

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10 Vital Tips to Making Money from Real Estate Property

If you can make money off your property, that will be a massive opportunity for extra income. It could be a passive income source in which you do not have to invest time, energy, or money regularly. You can make extra income if you implement any of the tips below.

Then, you can even pay off the debt on the home with the extra income you make from the property. The income from the property can also cover other expenses such as property taxes, utilities, and renewing the homeowner’s insurance. 

Some of the options below are peculiar to residential properties, some are peculiar to commercial properties, and others can work for both. 

If you own a property that could serve residential or commercial purposes, here are some tips for profiting from it. The following ideas are not exclusive and may depend on the property’s location to determine the best strategy for maximum profit. 

1. Part or Whole Lease

One idea you can explore is to rent out part of the property to residence seekers. Depending on the size of your property and its location, you will find people seeking accommodation. For instance, if your property is near a higher education institution or a working factory of learning, you may lease the property to students or workers, respectively.

You can also rent out a part of the apartment to people on vacation or during brief visits. These methods can generate passive income from your property. However, it requires regular maintenance and repairs where necessary. So, you must find ways to get tenants through an agency or online platform. 

2. Investing in rental properties

You can also go a step further and buy a rental property, fix it up, and rent it out to tenants. But the most suitable property for this purpose is one that can accommodate multiple tenants. You can thereby gain multiple monthly or yearly incomes from the tenants. 

This method can also be a long-term investment, but it requires close monitoring or caretaking. You may need to hire a caretaker or property manager for property management and maintenance. 

3. House flipping

A new way real estate investors have also been making good income is by flipping houses. This method requires substantial capital, but its turnover is faster than leasing or renting. The process involves identifying a property listed for sale, buying it, renovating it, and reselling it for a profit. 

All these processes can be completed within a few months, and the investor gets his money back with a profit. He can even embark on such an investment with a loan and repay it in a few months. You should therefore have a good eye for properties with high potential value.

4. Airbnb and Vacation Rentals 

Vacation rentals and AirBnB are gradually becoming more prominent in Nigeria, with many people needing temporary accommodation in critical areas. This short-term rental can fetch the homeowners some passive income after a short stay. 

This method is beneficial if you have spare rooms or apartments. However, you will need to get the word out to market your offer to those who might need it. In addition, the property has to be in the best shape possible to get people to stay comfortably.

5. Purchase and Hold (Appreciation)

One uniqueness of the real estate sector is its ability to appreciate over time. That becomes an opportunity for any investor to buy and hold the property for some time. The value rises when you buy a suitable property and keep it for some time without doing anything to it. 

This rise in value becomes a profit for the investor whenever he is ready to sell. Furthermore, he can renovate the property to fit a particular purpose and sell it off. This strategy can work for both residential and commercial properties.

6. Real Estate Investment Trust (REIT)

Real estate investors in Nigeria can also take advantage of the Restate Investment Trusts (REITs) for profitable investment in the sector. This investment type drives commercial properties up in value by distributing a part of their income to shareholders as dividends.

One advantage of this strategy is that investors do not have to own or manage any real estate properties directly. Instead, they invest in REIT shares and get dividends at the end of set intervals. REITs in Nigeria are governed by the Securities and Exchange Commission (SEC).

Over time, the shares continue to appreciate as they yield dividends to the shareholder. Any investor can buy the shares directly or through a brokerage account. However, the investor is responsible for doing due diligence on the REIT before purchasing the shares. 

7. Rent out your storage space, garage, or garden

Depending on the style of your property, you can rent out different parts for a fee. For instance, you can rent your storage space as a temporary or rented store for sale. Some people, including neighbors, may even need extra space to keep their stuff.

You can then charge the renter monthly or yearly for the space. To begin, create the space and spread the word around the neighborhood that you have room for storage. The area you have to spare may even be a large cupboard, a wardrobe, or an extra bedroom not in use.

Home garages can serve the same purpose, while your garden can host parties and other events. In addition, there is no need to lock up stuff in a garage or spare room when you can earn money by leasing it out. 

8. Let out your home as an office space.

A part of your home can also be helpful as office space for small companies. The period of pandemic has redefined a lot of things about the way we work. Many companies have permanently adjusted to the new normal of working from home. 

Therefore, you can make extra money by making your home available as an office space. You can use an additional living room, a detailed building on your property, or a spare room. Put the fliers out there and interview potential leads. 

Also, you may have to prepare the space ahead of time and take pictures that you will show to potential renters. You don’t have to put office items there; only ensure it has proper ventilation and can work as an office space. 

9. Make your home a movie set.

Another exciting way to earn money from your property is to offer it as a set for shooting movies. Every house can serve this purpose, no matter the size or the fanciness; there is always a need for this type of home. However, the location of the house may be an essential factor. 

A good location is essential for accessibility and the security of the cast and crew. You simply need to get the word out that you don’t mind leasing your property for this purpose, and you will soon get movie managers calling. Many people don’t think about this opportunity, but it can be enriching. 

10. Turn your home into an entertainment arena.

Another profitable way to use the home is to redesign it for entertainment. For this idea to work, your house must have certain features, such as an oversized garage that can be converted into a cinema or a big garden for hosting events and concerts. 

Therefore, as a token, you can show movies or football matches in the neighborhood. Or rent your garden space for events and concerts at an agreed-upon rate. In addition, you should partner with event planning companies that will decorate and give the area a facelift. 

You will not have to pay for the event decorations, but you will create the materials for the cinema or watch shows. So, in the end, renting for short leases can fetch you some income without wasting resources. 

5 Factors that influence the Appreciation of Real Estate Property

Certain factors can influence the level of expected value increase when considering real estate investment and its potential profits. 

1. Location

The location of a property is an essential factor that determines the rate of property appreciation. Starting with a state or region, property in the state capital is frequently more expensive than other cities within the same state. 

Another example is a property’s proximity to an amenity such as a stadium, an airport, or a government structure. The level of accessibility can also improve the value of a property over time. Therefore, owning a property in such areas holds high growth potential.

2. The Laws of Demand and Supply

As with every other commercial activity, real estate investment obeys the laws of demand and supply. If there is a limited supply of properties in an area coupled with high demand, the value of the available properties will rise quickly. 

3. Economic growth

The economic changes of a state or nation also influence the real estate sector’s growth rate. People gain the ability to rent and own property as the economy grows. As a result, the demand for housing properties rises, which can raise property value. 

4. Market trends

Apart from economic changes, current market trends can also affect the rise or fall of the property’s value at any given time. If the entire market experiences growth, the investor or homeowner has a higher chance of making more income. 

5. Property developments: Renovations and Reconstruction

Another factor that can improve the value of a property is the decision to develop the property for a more practical use. For instance, a developer may convert a single flat into a mini-duplex by adding extra features that could increase its potential value. 

However, remember that changes in interest rates, inflation, and other unprecedented economic policies also affect the real estate market. 

The final word

There are several opportunities for you to earn a good income from your property beyond renting it. Before you choose any of the ideas above, consider which one works best for your property. Then, choose a safe platform that protects your family and valuables from the risks involved. Using a company that offers these services may save you the cost of running all the checks yourself. 

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