Breaking News Nigeria, Latest Nigerian News
  • Home
  • News
    • Business
    • Politics
    • Science
    • World
    NewsShow More
    emefiele
    The 7 cardinal sins of Embattled CBN Governor Godwin Emefiele
    June 10, 2023
    NIM Appoints Olusesi as 14th Registrar/Chief Executive
    June 6, 2023
    Tinubu's abrupt announcement of fuel subsidy removal
    Tinubu’s abrupt announcement of fuel subsidy removal was unpresidential, insensitive
    June 5, 2023
    removal of fuel subsidies
    5 sectors that will benefit immensely from removal of fuel subsidies in Nigeria. Why you should invest in them
    June 5, 2023
    petrol subsidy
    EXPLAINER: A guide to understanding Nigeria’s controversial petrol subsidy
    June 4, 2023
  • Politics
    • Politics Featured Section
    • Politics Story for You
    PoliticsShow More
    Tinubu's abrupt announcement of fuel subsidy removal
    Tinubu’s abrupt announcement of fuel subsidy removal was unpresidential, insensitive
    June 5, 2023
    grv
    PHOTOS: LP Gov. candidate, GRV, dad visit Oba of Lagos
    March 16, 2023
    peter obi
    BREAKING! Peter Obi to hit the campaign trail for LP Gov. candidates
    March 2, 2023
    Olusegun Obasanjo
    Obasanjo to Buhari: Tensions are building up, cancel elections that do not pass credibility test
    February 27, 2023
    result collation
    BREAKING! INEC to commence result collation Sunday
    February 25, 2023
  • Business
    • Business Editor’s Pick
    • Business Featured Section
    • Business Story for You
  • SMARTKOBO
  • Entertainment
    • SportsNews
    EntertainmentShow More
    result collation
    Nigeria in Brief: INEC reveals a top secret, and other trending news today
    December 11, 2022
    troll
    Netflix and chill: 10 must-watch movies on Netflix right now
    December 10, 2022
    d'banj
    D’banj arrested, detained for allegedly stealing N-Power money
    December 7, 2022
    national-sports-festival-stephen-keshi-stadium
    Six states fight to host 2024 National Sports Festival after Delta
    December 7, 2022
    samm-okposo
    Singer, Sammie Okposo to be buried Dec 15, see burial arrangement
    December 5, 2022
  • #2023Elections
Reading: 5 common risks involved in real estate investing
Share
Notification Show More
Latest News
emefiele
The 7 cardinal sins of Embattled CBN Governor Godwin Emefiele
June 10, 2023
emefiele
BREAKING! DSS flies Emefiele to Abuja [VIDEO]
June 10, 2023
binance
What we know about SEC’s clampdown on Binance operations in Nigeria
June 10, 2023
NIM Appoints Olusesi as 14th Registrar/Chief Executive
June 6, 2023
Tinubu's abrupt announcement of fuel subsidy removal
Tinubu’s abrupt announcement of fuel subsidy removal was unpresidential, insensitive
June 5, 2023
Aa
Aa
Breaking News Nigeria, Latest Nigerian News
  • Home
  • News
    • Business
    • Politics
    • Science
    • World
  • Politics
    • Politics Featured Section
    • Politics Story for You
  • Business
    • Business Editor’s Pick
    • Business Featured Section
    • Business Story for You
  • SMARTKOBO
  • Entertainment
    • SportsNews
  • #2023Elections
Have an existing account? Sign In
Follow US
  • Home
  • News
  • Politics
  • Business
  • SMARTKOBO
  • Entertainment
  • #2023Elections
© 2022 Nigeria Today News. All Rights Reserved.
Breaking News Nigeria, Latest Nigerian News > Breaking News > 5 common risks involved in real estate investing
Breaking News

5 common risks involved in real estate investing

Lerato Lekena
Lerato Lekena January 28, 2022
Updated 2022/01/29 at 8:54 AM
Share
Risks involved in real estate in Nigeria
Risks involved in real estate in Nigeria
SHARE

Real estate experts give 5 risks involved in investing in real estate in Nigeria

All investments carry with them some degree of risk – the same holds true with real estate investing. Despite the promise of high rewards you should temper those ambitions with the reality that the risks involved are more often than not just as high as the potential rewards.

Key risks include bad locations, negative cash flow, high vacancies, and problem tenants.
Other risks to consider are the lack of liquidity, hidden structural problems, and the unpredictable nature of the real estate market.

For these reasons you need to take every possible precaution in order to ensure that you minimize your exposure to risk whenever possible or at the very least be prepared, financially and mentally to accept or absorb the consequences of those risks if the time comes.

Now, many times that we try to sell investment packages there is the potential to overlook and underestimate the risks – as the buyer and investor, you should not and that is why this article is as important or more important than the others on how to invest.
(Here is me also hoping that I am not shooting myself in the head by doing this – but it’s the truth that needs to be said and I might as well be the one to)

- Advertisement -

The most obvious risk when it comes to real estate investing is the immediate risk of losing your investment. This risk can be a huge blow depending on how large your investment was to begin with but isn’t the worst thing that can happen during the course of a real estate investment gone wrong. While I’m certainly not trying to talk you out of investing in real estate all together, it is a good idea to have a realistic view of the risks alongside the potential rewards.

RELATED NEWS:

  • 5 things you must know before investing in real estate in 2022?
  • Multiply returns on your 2022 real estate investments with this stress-free, simple strategy
  • How to scale your real estate investment

If you are flipping or buying off-plan houses as your real estate investment, you have the potential to lose a little more as you can become injured during the course of your work – or your workers could. Or just as with the pandemics’ effect on the economy, prices of materials can skyrocket and developers will struggle with keeping to the initially agreed costs without making a loss.

The sad truth is that many who are attempting to break into the business of real estate generally have neither adequate insurance coverage (this is true of themselves and the property in general and others that may be working on the property), the money, nor the time that a serious injury/blow might require to keep work moving along smoothly.

- Advertisement -

Take for example, off-plan developments that had been negotiated before the pandemic with payment plans up to 18months (that fell into the pandemic) and either of the subscribers and/or developer are in some level of default. Those projects are causing some level of difficult discussions and feelings to be at play currently. Because with the cost of money, investors have lost time from extended delivery of their projects and developers have had to be lenient/understanding of honest inabilities for some clients to have made all their payments on time.

Which is another risk common to real estate investing – stuff happens!!

Market trends tumble, companies go out of business leaving towns and the local real estate market in shambles, accidents happen during the course of the work, natural disasters occur, and buyers change their minds and pull out at the last minute. Each of these things can have devastating consequences and are almost always events that are completely beyond your control as a real estate investor (thankfully, not all of these occurrences apply to our local Nigerian market).

If that wasn’t enough many investors fail to have a proper inspection and find out when it is really too late that there are serious structural problems and other sorts of things wrong with the property. These things cost money to repair and cut into profits, occasionally resulting in a loss or a continued spend that should not have been in the first place.

- Advertisement -

If this doesn’t remind you of the importance of a thorough inspection I have no idea exactly what will happen but inspections are important for many reasons and can save a lot of time and money if you have one done ahead of time.

Risks of investing:

Do not allow the risks of real estate investing prevent you from taking the plunge. They are spelled out here to remind you that prudence and caution are necessary when investing in real estate.

  • To mitigate these risks whilst deciding on your choice for investing in real estate, you should
  • Understand the market you want to deal in so you can limit your risk exposure at the appropriate times
  • Ensure that your choice of investment strategy is defined by the amount of effort that you can either take on or have managed for you
  • Follow all procedures that ensure you are getting value and quality at the same time
  • Associate with a real estate investment club so you can learn more especially from engaging with others like you.

If you are interested in real estate investing there is no reason on earth you shouldn’t take the time and make the effort to learn more about its potential.

- Advertisement -

Thankfully you are reading this and I hope it spurs you on to subscribe and/or turn on post notifications to keep getting them delivered to your inbox.

Next week, I am going to write about the specific types of risks that apply to real estate and proffer possible solutions for how to mitigate and deal with them as amicably as possible.

So watch out for this …….

TAGGED: investing, real estate
Lerato Lekena January 28, 2022
Share this Article
Facebook TwitterEmail Print
Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

You Might Also Like

emefiele
Breaking NewsBusiness

The 7 cardinal sins of Embattled CBN Governor Godwin Emefiele

June 10, 2023
emefiele
Breaking News

BREAKING! DSS flies Emefiele to Abuja [VIDEO]

June 10, 2023
binance
Breaking News

What we know about SEC’s clampdown on Binance operations in Nigeria

June 10, 2023
Tinubu's abrupt announcement of fuel subsidy removal
Breaking NewsPolitics

Tinubu’s abrupt announcement of fuel subsidy removal was unpresidential, insensitive

June 5, 2023
nigeria today news logo
Nigeria Today News logo

Subscribe to our newsletter

Please wait...
Want to be notified when our article is published? Enter your email address and name below to be the first to know.

Most Recent News

emefiele
The 7 cardinal sins of Embattled CBN Governor Godwin Emefiele
Breaking News Business June 10, 2023
NIM Appoints Olusesi as 14th Registrar/Chief Executive
News June 6, 2023
Tinubu's abrupt announcement of fuel subsidy removal
Tinubu’s abrupt announcement of fuel subsidy removal was unpresidential, insensitive
Breaking News Politics June 5, 2023
removal of fuel subsidies
5 sectors that will benefit immensely from removal of fuel subsidies in Nigeria. Why you should invest in them
Breaking News Business June 5, 2023
petrol subsidy
EXPLAINER: A guide to understanding Nigeria’s controversial petrol subsidy
Breaking News Business June 4, 2023

Most Viewed Posts

  • World cup qualifiers: See the full list of 30 players invited to represent Nigeria (2,048)
  • WAWU! Flavour marries first baby mama Sandra Okagbue (1,436)
  • How angry youths attacked Buhari’s helicopter in Kano – [VIDEO] (1,308)
  • BREAKING! Flutterwave shuts down Barter virtual dollar card services, to terminate all cards by July 17 (1,172)
  • 10 smart businesses you can start in Nigeria today with zero capital and make money immediately (Part 1) (1,107)

Stay Connected

Facebook Like
Twitter Follow
Pinterest Pin
Instagram Follow

© 2023 Nigeria Today News. All Rights Reserved.

  • About
  • Privacy & Policy
  • Terms
  • Contact
Please wait...

Subscribe to our Nigeria Today News

Want to be notified when our article is published? Enter your email address below to be the first to know.
SUBSCRIBE

Removed from reading list

Undo
AdBlock Detected
Our site is an advertising supported site. Please whitelist to support our site.
Okay, I'll Whitelist
Welcome Back!

Sign in to your account

Register Lost your password?