How to know if your real estate investment is going to be viable

4 simple tips to determine real estate investment viability

Getting a good deal is not enough for you as a real estate investor to know if your property will be viable to make your investment back as returns and then profit. Yes, you should at least have a baseline understanding of your potential before you invest. Do not invest blindly.

I repeat, do not invest blindly!!

One too many property buyers who have tried to become investors by default have lost money by not following this simple rule of thumb (even though it’s not the most commonly spoken about rule on the open market). And when they lost value in returns, they blamed what – the asset.

REAL ESTATE IS NOT THE PROBLEM, YOUR VIEW AND USE OF IT IS

Think about it like this, ‘does the asset make money on its own without you as its owner putting or pointing it in the right direction to work?’ No, it will not and definitely doesn’t.

This is why this step of the ‘How to create capital you need to invest in real estate” is so important – this is actually what gets you the money. FOLLOW THE MONEY!!

The money (income/revenue/returns) that your investment in real estate is going to make will not come from you or your immediate friends – chances are they are not even our best target market for such a venture. They might be good allies to have with you along the journey to investing but not for the goal of getting them in as clients.

Questions you should ask yourself when investing include:

1. Who are the people that really need properties and/or homes to live in?
2. What locations are the homes they can afford to rent/buy?
3. Are they going to be annual tenants or medium to short stay tenants?
4. With the current state of this property I am being offered, how much can I price it to attract clients?
5. What do I have to do to attract and appeal to the clients that I would rather have as tenants?
6. Can I afford to do all these things in this property to make it relatable by the potential clients?
7. If I do all these things, can I financially plan to add more properties to my portfolio in the near future?

Now, because every location differs in terms of relatability, the ways to implement your smarter investing techniques too would differ.

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But if you are a middle to upper-level income earner looking to invest in real estate within the newly developing areas of Lagos (Ajah, Sangotedo, Abijo & Awoyaya axis), here are if you are a middle to upper-level income earner looking to invest in real estate within the newly developing areas of Lagos (Ajah, Sangotedo, Abijo & Awoyaya axis), here are 4 simple tips to determine real estate investment viability. This simple overview of what you should be looking out for and do to optimize your investment returns by satisfying the larger mass of people that should be your target market.

•  Affordable housing units that will cater to the middle class employees and business owners who need to relocate for work purposes (include career development because the LBS is also present there)

Affordable is relative but lookout for the best value to include the design, quality of building and lifestyle features that exist in the neighbourhood security, accessibility, health & food should be highest on the list.

• Multi-family units that are setup in a family friendly manner with shared services: Lagos is congested already, so even as property investors we need to contribute our quota of long term planning to build cleaner communities.

• Make it a preference to invest in properties that have titled lands – there is a reduced chance of there being encumbrances on the property to invalidate your investment.

• Start networking with people and the companies that are moving into the area. Being within or close to their network will make it easier for your investment units to be booked and/or rented out once completed; it might also be the window of opportunity for you to invest in more units too.

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You may also download her free ebook on real estate here