A decision to invest in landed properties is one of the most important and significant investment decisions one could ever make in one’s life time! For many people, especially the low and middle income earners, the cost of acquiring landed properties forms 60-80% of their lifetime income while only few who fall into the high income earner category can purchase landed properties without feeling the strain in their purse, therefore, before investing your hard earned money on landed properties, it is necessary that you put these five things at the back of your mind so that you will not lose your lifetime savings.
- Have a Plan
Like they say, ‘he who fails to plan, plans to fail’, planning forms the basis of any successful investment, to buy or invest rightly, you must plan rightly, your property investment goals should be well planned, written down, clearly state your goals and how you want to achieve them; this involves determining the proposed location, knowing who to buy from, having a fore knowledge of the amount you will need to purchase a piece of real estate in your desired location, having an idea of the return on investment and the duration of recouping your capital, understanding the risks associated and how to minimize it. What you are doing at this stage is to put together the elements that will make your goal of land acquisition achievable.
- Determine the location
Location is a major thing to consider when buying land or landed properties. It is true that every land has value irrespective of their location but it is truer that the value of lands situated in areas with potential growth appreciates faster than those without potential development. If you are not planning to invest in agricultural estate, you may not buy lands in the rural areas except it is an area where development is tending towards. The goal is to identify lands situated in areas with growth potentials.
- Put your finances together
The money required in acquiring lands and buildings is usually huge, so, you must understand where to get funds required in financing your real estate investments; such fund may come from your personal savings, mortgage financing, returns on other investments and other sources of income. What matter most here is that you know where and how to get legitimate funds to buy your dreamed property.
- Carry out your due diligence
Before committing your funds to any property, ensure you have a clearer understanding of who the owner is, this can be done by asking questions from people in that area, know the title documents available on the land, also, you need to know the predominant land use base on town planning laws and zoning codes; is it for residential, commercial or industrial? Get to know if the land is not subject to compulsory acquisition by government. All these can be done by verifying the information supplied at the ministry of lands and town planning offices. Doing these is just to determine the authenticity of title to land. Even when you are buying from abroad, have someone do these for you; a professional, close friends and family can always be of help.
- Engage the service of a professional/ trusted estate agent
Getting a trusted agent or professional in the proposed area will not only save you time and stress of searching for properties available for sale, it will also help you in getting genuine properties as well as ease the perfection of title documents. Professional estate agents have vast knowledge of the market, as well understands the nitty gritty of carrying out title search and perfecting title documents, they also give advice on the type of use you can put your land into based on their knowledge of the market, and can help you to negotiate and get the best deals.
The list of things to do before buying land/ landed properties is inexhaustible, however, taking the above steps will help you to minimize the risks that comes with real estate investment.