In Nigeria, the luxury real estate sector is one of the increasingly popular investment vehicles available to people who want to diversify their investment portfolio. And despite the nation’s economic downturn, luxury real estate investment, if done with the proper guidance, can be a game-changer for many.
So, in today’s post, we will take a deep look at the entry points of luxury real estate investment, its pros, and its cons.
If you read this article to the end, you will be armed with powerful hard-to-find knowledge about the secrets of luxury real estate investment in Nigeria, and how you can cash in.
What Makes For a Luxury Home
Luxury apartments and houses come in different architectural designs, sizes, and locations. Amongst these three major elements, location is a prime determinant of the value of a luxury house.
Additionally, another telltale sign of a home’s luxuriousness is the exquisite detail of its interior, its amenities, and the technological features it boasts.
But one thing is clear: when you talk about luxury homes, you are talking about a house that offers its owners an increased level of prestige, comfort, security, privacy, and a lifestyle change.
Features of a Luxury House
Unlike conventional houses, which provide their occupants with the basics needed for the day-to-day sustenance of themselves; luxury homes take it a step further by providing you with features that allow you to practice any hobby, and explore your passions to the fullest.
Having said all that, let’s dive into the features of a luxury house.
- Exquisite architecture
- Highbrow location
- Opulent home office
- Smart home technology
- Outdoor living space: Outdoor living room, outdoor kitchen, spa, outdoor pool, etc
- Home gym
- Entertainment lounge: Game room, Cinema, Bar, etc.
How to Invest in Luxury Real Estate in Nigeria
If you want to invest in luxury real estate, here are some entry points you can take:
- Buy a luxury condo
- Build a custom-designed luxury apartment
- Flip a mansion
- Invest abroad
1. Buy a Luxury Condo
If you want an easy entry point into the luxury real estate market in Nigeria, then buying a condo in an exclusive luxury building with top of the line amenities, and a flexible transportation option is a great choice.
What’s more, ensure your investment is situated in a location that’s accessible and surrounded by other luxury buildings.
2. Build A Custom-Designed Luxury Apartment
Another method of owning a stake in the luxury real estate sector would be to build a custom-built luxury home from start to finish.
Although it has a longer time-to-completion, it offers you one of the highest profit margins in the Nigerian luxury real estate sector. One drawback is you’d have to pick a general architecture, layout, finishes, and amenities that will appeal to a broad segment of the luxury real estate market.
Nevertheless, in building a luxury home with a broad appeal, you’d also have to walk a fine line to retain the uniqueness and exclusivity that buyers crave.
3. Flip a Mansion
Another quick and easy way of getting into the Nigerian luxury real estate sector is through house flipping.
In a nutshell, luxury real estate flipping is when a luxury real estate investor buys a property, remodels it, and sells it for a profit. The catch is this, you are buying the house with the intention of quickly reselling it.
Although this method hasn’t gained mainstream appeal in Nigeria yet, its popularity is steadily building up.
Remember, when buying a house with the intent of selling, the property should have the right mix of location, architecture, style, and condition.
4. Invest Abroad
This is typically not a move for a beginner luxury real estate investor to make, but who is to dictate what you should or shouldn’t do?
Armed with the right knowledge, and the right team, you can begin to enjoy benefits you cannot find locally when you invest abroad.
However, investing abroad is fraught with its own challenges. It is important to always keep in mind that the rest of the world does not operate as we do here in Nigeria. Therefore, observe due diligence and employ the services of international real estate attorneys and professionals to help you.
Luxury Real Estate Investment Tips
Before you start investing in high-end real estate markets, here are a few things you should consider.
1. Create a Luxury Real Estate Investment Checklist
Before you splurge your money on a new luxury property, identify the features of a luxury property that are most important to buyers in the market now.
What are the amenities that can attract high-end customers to your house? And what is obtainable in the market now?
Identifying the difference between the two things above can separate your luxury home for greater patronage.
2. How Easily Can You Sell This House
Life is dynamic, and things change. What’s more, developing an emotional attachment to your luxury property will be counterproductive to your investment plans.
So, you should go into every deal with the mindset that you sell the house eventually. (Even if you may not).
This strategy will keep you from going for houses that have a low resale value.
Secondly, another reason for determining the resale value of the property upfront, is that in the long run, you may realize that the house isn’t yielding your projected profits. As such, you might decide to cut your losses by putting the house up for sale. At this point, knowing the resale value of the house will become your insurance.
3. Work With a Reputable Luxury Real Estate Firm
Although luxury homes appear to be all over the place but finding them is another kettle of fish.
Luxury properties are exclusive investments, hence information about their sale, is rarely public knowledge.
This is where a reputable luxury real estate firm comes in.
So, consider working with a realtor with:
- Access to off-market luxury properties for sale.
- Access to a network of contacts who have luxury properties more suited to your needs.
- A realtor that will provide you with an accurate evaluation of the property.
- A realtor that has managed such deals before, and can help you navigate and identify potential pitfalls.
Investing in the luxury real estate market, requires planning arming yourself with the right knowledge and team to help you achieve your goals.
We hope that this guide has given you some clarity on how you can cash in on the luxury real estate market.
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