19/12/2024
If you save ₦2 million every month to buy a house of ₦120 million, it will take you 60 months (5 years) of consistency to raise the money.
By the time you are ready to pay with your ₦120 million, the value of the property of equal standard would have gone up to AT LEAST ₦150 million.
Sadly, this is what most people are doing.
They have a long-term savings plan for a project in ways that only depreciate their hard-earned money.
If a well-trained realtor tells them to buy a genuine land (inside bush but in an emerging location) for ₦2 million, they will say that they prefer saving ₦200,000 monthly so that they can get one inside the city.
Guess how much the property is?
₦50 million for a half plot of land.
By the time they save ₦200,000 monthly to get up to ₦50 million, the value of the property they were eyeing would have increased to ₦70 million.
Before they save up to ₦70 million again, the price has gone up to ₦100 million.
If they can’t wait any longer, frustration sets in and they are forced to throw their business capital into purchasing an empty plot of land.
This is not a wise decision at all.
I want to show you what a financially savvy person would do so as to invest in real estate without tampering with their business capital.
Instead of saving ₦2 million every month for 60 months, use that your ₦2 million to buy at least one genuine land in an emerging location every month for 5 years (60 months).
In 5 years, you would have acquired 60 plots of land in different locations (cities) and from different reliable real estate companies.
Since real estate is not a fast-liquidating asset, you can give yourself 365 days of consistent marketing to sell off 55 plots of the land and reserve 5 for yourself.
If you sell each plot at an average price of ₦4 million, (which is impossible because some would have risen to 5X or even 10X) you will have ₦220,000,000 (₦4,000,000 X 55 = ₦220,000,000).
With this ₦220,000,000, you can get a property of ₦200,000,000 in a choice location and still have 5 empty plots of land worth at least ₦20 million and ₦20,000,000 raw cash.
All of these you will achieve without touching your business capital.
This is a straightforward way to explain LAND BANKING.
When you beat inflation and poor savings culture through land banking, you can invest the proceed into other fast-appreciating real estate assets that are more capital intensive.
Investing in real estate is not supposed to cripple your business if you approach it with a solid plan and strategy.
Real estate is a good hedge against inflation and a profitable investment plan if you know what you are doing and you are working with the right person.
Don’t do it just because you can afford it, if not, you will either regret it or you won’t get the best out of it.
I hope this helps you today.
— Emenike E.
PS: Real estate marketers, you are free to swipe this for your marketing. Real estate investors, you are free to implement this or hire me to assist you in implementing this. Developers, you are free to invite me to speak to your marketers and investors
