Like it or not you will have to leave where you presently live. If you don’t leave by yourself your landlord or any other circumstance WILL force you to leave and chief among such circumstance is death.

Recently, I read the story of a renowned rich man in one of our dailies where he mentioned the fact that he built his first house at 19years of age. When Prince Samuel Adedoyin was asked by a Sunday Punch newspaper columnist if he can remember when he made his first big money, baba simply said “The only thing I can remember is that I built my first house at the age of 19 and I also bough a Volkswagen at that age. At the age of 24, I built a house in Rumens Road, Ikoyi and I was a millionaire then”

The story reminded me of what a friend told me about a certain man in Ota town who built his first house when he was 18years old.

It is with much indignation and heavy heart therefore that I listen to stories of scores of people who are approaching their grave without a roof they can call theirs. Mandela said a man is not a man until he owns the roof over his head.   Achievements like the two mentioned above should be desired because it is legitimate. I am not by what I have said encouraging the craze for money within the youths of today. What people display these days is mostly inordinate affection for wealth. People want to acquire riches by all means and at all cost. No, that is not what I am talking about. I am talking about doing things that are legitimate to get wealth the way the old timers like Price Samuel Adedoyin did it. Their achievements is an indication of the fact that it is still very possible and the objective of this article is to show you one of the ways by which it can be achieved in a slow-and-steady-wins-the-race manner.

Have you heard of Micro-housing schemes before? It is a combination of some proactive measures, including the adoption of the right housing product and appropriate finance. When talking about micro housing, the key word is decency not luxury. According to a friend of mine, Mr. Segun Adaju, the MD of GS Micro-Finance Bank Limited, decent housing is the right of every person living on earth. He also noted at a conference last year that in third world countries housing had remained poor and inadequate for the majority of the population, adding that poor housing finance was evident in life tenancy, slums, shanties, overcrowded living spaces and limited housing design options.  Mr. Adaju cited three examples of microfinance institutions around the world that had successfully provided housing microfinance to customers.

According to him, “One of such is the Grameen Bank of Bangladesh, which started housing microfinance in 1984 and has disbursed $121m to date to 637,000 borrowers. “Customers build according to cost-efficient functional design and technology specified by Grameen – houses cost between $300 – $600 and customers are granted up to five years repayment period at a concessionary interest rate of eight per cent per annum. Loan recovery rate is 99 per cent.”

Another cited example was the Caja Popular Mexicana of Mexico, a traditional savings and loans organisation, which started housing microfinance over 50 years ago but re-packaged and refocused 10 years ago.

“It has a current portfolio in excess of $90m out of total loan portfolio of about $300m. Repayment period is between 18months to five years at interest of 50 – 70 per cent per annum. Loan recovery rate is 92 per cent,” he said.

If this exist in Nigeria, we will be well on our way to solving the housing crisis. I have good news for you, micro housing is the natural thing to follow after the spate of penny real estate land opportunities around emerging settlements witnessed last year. A lot of the folks who now have land or are still paying for theirs do not have what it takes to build on them in good time and NHF can not serve everybody so micro finance mortgage and developer’s loan will be the next point of call.

It is already happening, for example in the Ofada/Mowe corridor you can buy a 3 bedroom semidetached bungalow with one room BQ for N6.5m and pay as follows: 30% down and the balance spread over 35 equal monthly instalment. You are also allowed to aggregate the 30% over a period of 3months once you indicate interest in acquiring the property. Also, there is a micro finance bank on hand to give micro mortgage to qualified buyers.

So, if you are interested in becoming a landlord in 36months, you can do it using either of the above suggested ways because it guarantees you good neighbourhood, security, professionally co-ordinated management, excellent infrastructure and optimum value for money.

Affordable to Buy
The Federal Government defines housing affordability as housing costs that do not exceed 30 percent of household income. Housing Costs are defined as rent  (in a tenant) or principle, interest, taxes & insurance combined (if paying back a mortgaged). If we assume you’re making about N300,000 income yearly, you would be spending no more than N90,000 per annum on housing costs. Now, if we also assume that you are purchasing a home selling for N3.5m, you will be needing over 12 years tenured mortgage. By a subjective definition, this home may be affordable to own, but with the present situation as regards the type of mortgage that is available in the country, would it be affordable (possible to secure a mortgage that would leave you still in the 30% housing cost range) for you to purchase?

Affordable to Build

One major factor in affordability is the cost to produce housing. Builder groups often claim—and government statistics support these claims—that home building traditionally leads the nation out of recession. It’s no wonder when you consider that home building benefits not only the trades but also manufacturing, professional services, and even transportation. But the demand for new housing can cause shortages in labour and materials. Delays due to weather or permit issues also add to costs and these costs get passed on to the buyer. Builders of new homes typically operate on fairly narrow net profit margins, so even a small spike in costs can cut drastically into a builder’s profit and increase housing costs to buyers

An experienced builder or estate developer like my company Realty Point Limited can help the homebuyer keep costs down through careful design and material selection. This process is called “value-engineering” and, as a buyer, it is in your best interest to find a company who thoroughly understands it. But while the building industry certainly benefits from innovations in materials and methods, the independent builder is generally not able to have much of an impact on overall housing affordability. Think of it this way: A N800m mansion in old Ikoyi, at its core, is built with essentially the same materials as a N25m four-bedroom emerging settlement farm house building. It’s not just the finishes that make for the inflated price tag.

However, the developer can do a lot more in this direction by providing added value.

How does a 2bedroom and 3 bedroom + 1 room boys’ quarter bungalow micro housing scheme backed with micro mortgage, long installmental payment options and choice of building materials sound in your hears? Great? That’s what you will get now. I will be looking forward to hearing from you on these possibilities.  Myself, Mr. Adaju, Mr. Akin Olawore and another alternative building material expert.

Sack your Landlord in 2009!

In my last article in 2008 I tried to prepare you for the real estate investment opportunities in 2009, I shall be continuing along that line in this article also by identifying areas or call it locations you should be looking at if you plan to make the kind of money you have always dreamt of this year.

The global recession not withstanding, 2008 could not be said to be a bad year in the real estate investment arena. In fact, it was a fantastic year, what with properties appreciating by huge percentages in record time. Crown Estate Libra type of house (4 Bedroom Duplex) moved from N26.0million per unit to N42.0million in 9months. That’s about 61% appreciation in value. Once the major parts of Victoria Island were commercialised, prices went berserk. Now, property values are been reported in the billion naira range on the island. Whatever you are looking for is either in a fraction of a billion, over a billion or a couple of billions. Suddenly millions, even hundreds of it is going out of fashion on the Island.

Duplexes in Magodo now go for between N60m to N80m from a January 2008 price of about N40m.

Even the mass housing market reflects the trend, the Ogun Mega City Projects like Prime Estates and the likes appreciated by about 60% from N500,000 in January to N800,000 since April and revving to go higher shortly.

The influx of Capital market investors towards the tail end of 2008 as a result of the gloominess in the Stock market only helped in ensuring the progressive climb in value.

Although the market experienced a slow down between October and November 2008 it appears things have started picking up again.

Having experienced all these now is the time to project for 2009 and looking at the trend I will like to suggest possible investment locations where exceptional possibilities exist for money making in the new year.

Magodo-Isheri: Due to the fact that Magodo-shangisha is approaching full development the spill-over effect will result in the increase in activities in adjoining estates to which Magodo-Isheri estate belongs.   This is a prime place for residential properties, especially duplexes.

Omole 2: It is my believe that the spill-over of Magodo-shangisha will also get here. Short-letting apartments, Hotels and other commercial properties will thrive here in 2009.

Arowojobe Estate, Mende and Maryland: Any serene neighbourhood where there is opportunity for development on the mainland will always be a hot spot. By serene I mean a measure of support structure like drainage, motorable road, and good layout. This is because things like these are scarce and value is bond to grow in the direction of such locations.

Ikorodu : My choice of Ikorodu is based on what happens with the 4^th Mainland bridge. Connecting Ikorodu with Ajah, Lekki and by extension Victoria Island will definitely open it up to more prospects thereby impacting property values positively.

Lekki: Especially towards and around Eleko area. These projects; Free Trade Zone, Export Processing Zone, Cargo Airport, Golf Resort, e.t.c  and as I gathered, the extension of Lekki-Epe Expressway will favour property investment in that axis.

Omuwo-Odofin, Festac, Okota: The road construction activities of Lagos State Government are being commended and I can authoritatively say that it will open these places up for more pressure thereby driving value towards the sky.

Badagry, Agbara, Igbesa: Imagine a 10 lane road running through Okokomaiko with a working rail system, value will go up like a bomb blast. The Lagos State PPP power project with some Asian partners, about 5 tertiary institutions (LASU, Crawford University, Gateway Polytechnic, French Village, Permanent site of Ronik Polytechnic), a tourist destination (Badagry slave camp), the Badagry beach, etc within that corridor are value drivers any day.

The Commercial areas of Victoria Island: this is for the high networth individuals or corporate bodies. You can more get approval for multi-storey office complexes on most streets in Victoria Island.

Along Lagos-Ibadan Expressway: this remains the hotbed for what I call penny real estate. It is an emerging destination for residential home investments with enormous potential for growth. This position is better enhanced with the Lagos-Ogun Mega City Project. The influx of developers into that axis has already broken the ice and ample opportunities exist for discerning intending investors.

Abuja: The Federal Capital Territory will continue to be an investor’s delight. The investment opportunities here cuts across residential, commercial, high and low income brackets.

Other parts of the Country where there is relative peace and serious work of governance will also provide investors with good returns on investment.

I suggest you take serious look at the places mentioned above, research further and launch out for an exciting real estate investment voyage in 2009.

Happy New Year!