Investors interested in real estate investment have been urged to use the right professionals at every stage for proper transaction.
Principal Partner, UbosiEleh and Co. MrChudiUbosi, said this was germane in real estate investment in order to provide necessary guides and reduce the propensity for fraud.
He pointed out that real estate transactions came with differing challenges, but that the principles remained the same, urging investors to use right professionals at every stage.
Themed: “Key Issues in Real Estate Investment Decisions”, Ubosi who spoke on a wide range issues bothering on reasons for undertaking real estate investment and funding consideration/model, said it has become imperative for investors to seek a professional opinion of value to ascertain that the sale price of the land or property is not inflated.
He said:”Key thing in real estate investments is the use of right professionals from the on set.
“For 90 per cent of the populace, a real estate investment is the largest investment they will make in their life time. It’s important that it is gotten right.
“Ensure that you get a professional opinion of value to ascertain the sale price of the land or property is not inflated.”
“If in doubt about structural integrity employ an engineer to verity. Get the solicitors involved in legal diligence, contract drafting and signing etc.
“This approach may seem expensive at the onset but could save one from fraudulent transactions and loss of funds,” Ubosi said.
He listed reasons for undertaking real estate investment to include shelter, income,retirement, land banking, hedge against inflation, build wealth through appreciation,investment (endowment for children), social purposes -politics, statement, tax breaks and deductions and portfolio diversification
For any real estate investment reason, he emphasized that location played an important role.
According to him, price and location would go hand in hand, adding that latter determines rental returns, capital appreciation and demand.
“Sometimes you may pay a little more for a particular location but that gives you more profitable options down the road,” he said.
Ubosi explained that title to property in any real estate investment was key, listing some of the expected documents toinclude statutory Right of Occupancy, Power of Attorney, Deed of Assignment, Certificate of Occupancy and Freehold (contracted pre Land Use Act)
“These are the most common ones, and are registered or registrable,” he said, noting that Nigeria has a land mass of 924, 000 square kilometers, and less than 10 per cent is titled.
Stating the importance of having title to land or property, the real estate expert said it afforded investor the legal right over the property and helped to identify vendor as well as reduce the propensity for fraud.
“Many transactions just have documents for purchase receipt and survey plan.Due diligence should be well undertaken and then possession of the property taken,” he said.
On funding consideration for real estate investment, Ubosi pointed out that due to low mortgage penetration in Nigeria, many purchases were done from equity 100 per cent.
“Others seek funding from financial institutions.Usually a mix of equity and loan is common.Whatever model chosen, the investment must be able to make same fair returns.
Where a loan is involved, he pointed out that the drawdown and repayment were key to reduce interest and principal repayments, especially upon conclusion of the sale.
The real estate expert urged investors to check that the property is not under acquisition or has issues with right of way.
On the issue of Governor’s Consent to the transaction, he explained: “Land Use Act vests all land in the Governor of the State.So to regularize your title to your new acquisition one must obtain Governors consent.”
When taking possession, he warned investors on the need to ensure that the issue of possession is trashed out well before parting with money.
According to him, if the property is tenanted, formal document agreements must be reached on same
He also emphasised the need to obtain necessary planning approvals before building or renovating the property.
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