THROUGHOUT history, happiness has been the essential pursuit of man and it is his ultimate goal. He realizes this goal in a healthy economy. That is, a healthy and flourishing economy enhances his joy, guarantees his happiness, and empowers him to acquire the basic needs of life, such as shelter, clothing, food and to meet all other commitments. Governments across the world, for this reason, adopt a well-being economic approach in which all economic, social, and political frameworks are geared towards achieving the goal, which perfectly aligns with utilitarian philosophy which aims for the betterment of the society as a whole, and which advocates actions that foster happiness and oppose actions that cause unhappiness. Maintaining a healthy economy requires great expertise and dedication by both the fiscal and monetary authorities. That the Nigerian economy has been facing structural, fundamental and lingering challenges is no longer news. The economy over the years has been badly hurt as a result of the fiscal policies of successive administrations. One would be perfectly in order to describe the economy as unhealthy, particularly in the present regime of rising inflation which erodes purchasing power and consumer confidence; high unemployment, rising level of poverty, and imbalance between imports and exports.
The economic reforms of the present administration aggravated inflation. Government took a drastic but necessary policy action by removing fuel subsidy and it created an unintended result by escalating inflation and hunger pandemic. What bothers most people now is how to survive the economic turbulence, how and when we are getting out of the woods. Notwithstanding the lingering economic challenges, some people are still lucky to have excess income or make enough money that they can invest after meeting their daily expenditure requirements. I have come across diverse opinions, perspectives and preferences for investment in property, stocks or shares. This piece should guide intending investors, and educate the public why investment in property is better than investment in shares. Some Nigerians who invested heavily in shares some years ago unfortunately did not live to tell their stories. Many investments in shares vanished while others who invested in properties can see their investment grow both in terms of income and capital value. Real estate investment is most assured and very secure. Unless the world ceases to exist, you can never lose your money or investment in property. Depending on the quality and location of the property, the return on investment may not be that high, but it is guaranteed, consistent and assured.
Your motive for investment determines the type of investment that will be suitable for you. Property investment is not recommended for you if you are thinking of a project that will earn you returns in a year or two, but if you are thinking of a long-term investment, property investment is highly recommended for you. If you are interested in capital return or streaks of income or an investment that you will leave for your children, property investment is your best option. I can guarantee you that in property investment, your capital is secure, your investment is secure at all times. Real estate is synonymous with stability. The chances of losing this capital any time in the future are absolutely absent. The very nature of investing in real estate seems to promise security—a physical asset you can touch, see, and pass on.
The money invested in property will grow in value over the years. Real estate is not only synonymous with stability, it is also synonymous with long-term profitability. Real estate hedges against inflation because property values over time tend to stay on a steady upward curve. Real estate investments also provide potential recurring income for investors and can keep pace or exceed inflation in terms of appreciation. The return on property investment is not static but grow from year to year in line with inflation rate. I have seen families build their generational wealth on real estate. Cities around the world, from Europe to America, Asia and elsewhere, have transformed around real estate. However, in real estate investment, especially in a complex and evolving market like Nigeria’s, lies a web of factors that investors must navigate to ensure their capital is safe and their dreams of profitability are realized. Location, for instance. Location matters most; location is everything. Geographical dynamics will always play a critical role in determining the value of your investment, whether it is a bustling city center with planned infrastructure or a quieter, emerging area ripe for future development. Properties in areas that experience rapid economic and infrastructural growth almost always yield the highest returns.
Another critical issue investors must watch out for is economic trends and dynamics. Real estate latches on the economy. The Nigerian economy, for instance, has over the years been experiencing challenges, highs and lows, recession, even insecurity. All of these and several other factors cause fluctuations in the economy, and these fluctuations ripple through the real estate market, affecting property values and rental income. Investors must watch out, and take a crystal look at the economic environment, recognizing when to sell and when not to. And of course, the regulatory framework is very key. A well-documented legal frameworkensures and guarantee safety net for any investor.
- Olaposi is an estate surveyor and valuer based in Lagos
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