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One of the commonest reasons why many Nigerians are scared of investing in real estate is because of the possibility to lose money either to bad investment decisions, inexperience, greed or unscrupulous individuals in the industry. Even though the potential to lose capital is a permanent future of any investment, losing funds to deliberate machinations of some opportunists in the industry can be most painful especially in a situation where not much help can he expected from security or legal apparatuses.

In this article, we will show you ways to reduce to the barest minimum your potential to lose money when making real estate investment in Nigeria.

1. Get lots of information: Like the saying goes, information is power. An uninformed soon loses all he has. Being able to successfully invest in real estate investor in Nigeria without losing money or anywhere in the world does not happen overnight but through the acquisition of loads and loads of right information. I once heard of a man who built a twin four storey building containing several flats and soon after it’s completion, I got information that the land upon which he built the house was a government land and the government were coming to demolish the building. He immediately sold it off to an unsuspecting buyer in the range of hundreds of millions and took off with his family out of Nigeria. Guess what, few weeks after the new buyer took possession of the property, the buildings were demolished leaving him with huge loans to pay. Imagine if he had made efforts to get adequate information about the property before he paid for it. Many Nigerians typically lose money in this kind of circumstance leading to regret. Therefore, before investing money in a real estate investment, especially a rental one, ensure to get adequate information even if it will cost you some money.

2. Avoid offers that are too good to be true: If something seems too good to be true, it probably is too good to be true. Most people fall for offers that promise unbelievably high returns in unbelievably short period as a result of greed or ignorance.

In reality, real estate can offer low to very high returns – sometimes over a 100% ROI per annum and these are often dependent on several factors such as strategic location, the type of investment, and the structure of the investment.

So, when an offer looks too good yet, it interests you, take some time to think about the offer. Ask questions about the offer and get answers. The quality of your questions depends on what you know about real estate investing. This is why investment literacy is as important. Don’t be in a rush and don’t also delay.

3. Buying properties on impulse: One of the easiest ways to lose money in real estate is that buy properties on impulse rather than on sound investment decision. Some people lose money when they suddenly hit a jackpot or they suddenly “blow” and the next place they see to “tie down” the money is to invest in properties. When you invest in properties simply because you are looking for ways to tie down your money, you might end up losing that money. Ensure that your investment decisions are guided by careful planning and guidance from experts.

4. Buying properties that cost more to maintain: Some properties actually cost more to maintain/repair that the amount they generate. In fact, it is bad business when you invest on properties upon which you incur more expenses in repairs and maintenance and taxes without generating commensurate rental income from it. It is also a mistake to buy a property at a ridiculously high price with the hope that it would appreciate enough in future. In other words, don’t buy real estate assuming the price will go up and you can sell it later as nobody knows what the market is going to do. This is why trying to time the market is a bad strategy to base your decisions on. Instead, only buy properties that generate more income each month than they cost to own.

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