Jacinta Ukwa, enterprise supervisor at Braudy World Ltd, says land banking stays one of the standard paths to long-term wealth creation.
She mentioned in an interview that regardless of the advantages of land banking, many Nigerians proceed to fall into avoidable traps.
She defined that land banking could be a highly effective wealth-building software, however solely when approached with foresight, self-discipline, and a long-term view.
She described it as a strategic buy of undeveloped plots in rising areas, held over time and later offered at a premium.
“It’s the considering behind these much-publicised tales of N1.2 million plots hovering to N3.5 million,” she mentioned. “However that solely occurs in case you sidestep the widespread pitfalls.”
Moreover the constructive tales, there are 5 errors to keep away from when contemplating an funding in land.
Assumption that the funding is for the short-term
Williams Mayomi, an actual property entrepreneur, famous that land banking is for these enthusiastic about long-term investments.
“When you’re in search of short-term positive aspects, land banking is just not for you. The minimal holding interval is often three to 5 years, relying on the placement,” he cautioned.
“For long-term buyers, land banking stays one of the highly effective wealth-building methods, particularly amongst Nigeria’s elite.”
Incorrect areas and lacking land titles
It’s necessary to get the fitting location and confirm land titles whereas monitoring market developments. The purpose is to assist keep away from the widespread pitfalls of land funding in Nigeria.
Grace Ofure, an actual property funding specialist, suggested that correct title documentation is non-negotiable. “In Lagos State, for example, land with verified title paperwork appreciates considerably sooner,” she famous.
Ready for location to completely develop earlier than shopping for
Ukwa, earlier cited, pressured that the core of land banking lies in figuring out potential earlier than improvement arrives.
“When you wait till the roads are tarred and the supermarkets are open, costs could have already surged and you could be priced out totally,” she warned.
Paying top-of-the-market costs
In keeping with Ukwa, because the objective is to purchase low and promote excessive, buyers should keep away from plots already commanding premium costs akin to these going for N200 million. “These areas might have already peaked in worth,” she famous. “Excessive-priced land solely is sensible in case you plan to construct instantly for rental or short-let returns.”
In an identical vein, Ofure suggested that buyers ought to purpose to purchase at wholesale costs, not retail.
“If you purchase under the market worth by a good land banking firm, your returns might be substantial,” Ofure mentioned, citing examples of properties appreciating by as a lot as 30 p.c beneath 60 days.
Shopping for just one plot
Ukwa suggested buyers to accumulate multiple plot the place attainable.
“In case your single plot appreciates to N10 million in 4 years, you’re left with a dilemma, promote and exit utterly, or maintain on,” she defined. “With a number of plots, you possibly can promote one to understand positive aspects whereas conserving a stake in the identical development zone.”
Ofure shared how she personally reaped the long-term advantages of land banking. Over a decade in the past, she bought a plot of land in an undeveloped space, anticipating future development. Eleven years later, she offered the land to fund her youngster’s worldwide faculty charges—incomes greater than triple the required quantity.
“Once I purchased that land, my youngster was simply six years outdated. Years later, that single funding coated three years of worldwide tuition,” she mentioned.
