Real Estate Business in Nigeria is lucrative because properties worth billions of naira are transacted each year, this is due to high demand for real estate spaces – and these could range from residential apartments, office spaces, shopping centers, farmlands, warehouses etc.
Amazingly, more than 75% of these deals are happening in Lagos, Abuja, Port Harcourt and some other few business cities across the country. You might be wondering what’s driving and attracting these huge amounts of property transactions in Nigeria.
Over 20 million housing deficits in the country. That’s a big problem! What this translates to in a common man’s language is that there are over 20 million people that are dying and tirelessly seeking every possible means to securing shelter for themselves, family and for business purposes. As you know, a problem like this is a big concern for some entrepreneurs and it’s because of this kind of problem that such class of entrepreneurs exists.
Interestingly, the emblem of entrepreneurs is SOLUTION. I must quickly hint you that this big housing problem can’t be solved single-handedly by the Government, hence the need for Real Estate Business Consultants and Managers Like you.
Real Estate Business in Nigeria
As a Real Estate Business person, it is expected that you are passionate about proffering strong solution support system to fill this huge housing gap, entrepreneurs in this category are proudly called real estate entrepreneurs.
Real Estate Business is in Nigeria simply because of high demand for solving her inherent housing problem. The lucrativeness of real estate business is largely determined by the amount of housing solutions you provide in the Nigerian housing market.
We have people that have become millionaires and have become an authority in the real estate industry through the persistent provision of real estate solutions. The great news is that anybody can practice and provide real estate solutions and become a millionaire, all you need is the right fundamental exposures, information, skills, and knowledge.
Read through the whole guide or jump to each section to get a picture of every bit of hard work that goes into starting your own property management business—and how to make each step easier.
Choosing your Location
You cannot be everything to everybody in Real Estate Business. It is ideal to choose your preferred real estate business location. You may choose to be a Lagos Real Estate Expert, or Abuja Real Estate Expert or Ibadan Real Estate Expert or Port Harcourt Real Estate Expert. Also, try to understand the real estate market and economic situation in your chosen location.
You can always download Google Map or Google Earth Software to your phone or computer; this will help you understand your location better. They are invaluable time-saving tools to understand every street in your chosen real estate location.
Please note that Nigerians may not take your business seriously if you don’t have an office or you don’t have a formal office address. It is good you rent a small office space or co-locate with an existing friend or partner if you can’t afford one.
People respect you when you operate from an office – you will enjoy doing business with Nigerians when they see office address on your business card.
Setting up your Legal Business Structure
The main reason to register your real estate business is that business registration will provide you with the required legal support. It will also bring more trust to your business, so it will be easier to find new clients. There are two major forms of business registration framework in Nigeria;
- Business Name Registration
- Company Registration – Limited Liability Company
You do not need a lawyer to register a business name in Nigeria. You can simply do it yourself – all you need to do is to visit www.cac.gov.ng. Follow the business name registration instruction and get your business name registered within 1 month – it takes between N10K – N30K to get this done.
Company registration i.e. Limited Liability Company requires the service of a professional lawyer to get it registered and you must be Prepared to spend between N60K – N100K to get it done. It all depends on the share capital required to be registered in the company.
I will encourage you to go for the company registration –i.e. the Limited Liability Company framework. Business name registration model is a bit riskier in real estate, because it does not protect you and can catapult unlimited liabilities on to you and your personal assets.
The best business structure is to go through the route of a Limited Liability Company – it can protect you from personal business debts and liabilities. Be wise and seek the service of a professional in this regard.
Get your Business Plan Ready
A business plan serves as the framework for your entire property management business. Try and write out these information about your business;
- Executive Summary
- Company Description
- Market Analysis
- Organization Structure
- Services or Products Outline
- Marketing and Sales Approach
- Startup Funding
- Financial Projections
Learning, Personal Development and Industry Tips
Invest your time and money in real estate books, learning materials, seminars, and training – these will help you expand your knowledge and expertise in the industry.
Never loan your real estate books out or give them to other people. Too frequently, people don’t return them. You will probably forget who you loaned your book if you are not careful.
Keep personal contact details of your potential real estate helpers – including your tenants, neighbors, Carpenters, Bricklayers, Painters, Plumbers, Electricians, Property Valuers, Lawyers, Town Planners, Land Surveyors, Quantity Surveyors, Architects, Builders, Engineers, Interior decorators etc.
Your real estate contacts can serve any of these purposes: information resources, bounty hunters, assistants, educators, specialists, networkers, referrals, facilitators, strategists, tacticians, problem solvers, buyers, sellers, partners, friends or tenants, guarantors, etc.
Real estate is a people business, start out on the right foot and acquire and organize your network of professionals. Give your business card to all the contacts earlier mentioned and employ them as your deal hunters, pay them for referrals, engage them in business, especially when you need their particular specialty.
Loyalty to others will get you special preferential treatments; always stay loyal to your network of professionals. Don’t forget, when you help millions, you will make millions.
Licensing / Certification and Membership Requirements
There are some aspects of real estate consulting that need some certifications, while the same is not really required in other aspects. Also there are Real Estate Business Community / Associations that can help you;
- Give you Business Credibility
- Nurture your Staff with Continuing Education
- Provide Certification in Real Estate Operation
Notable Real Estate Business / Professional Bodies in Nigeria
- Nigerian Institution of Estate Surveyors and Valuers – NIESV
- Real Estate Developers Association of Nigeria – REDAN
- Association of Estate Agents in Nigeria – AEAN
- Estate, Rent, and Commission Agents Association of Nigeria – ERCAAN
- Lagos State Real Estate Transaction Department – LASRETRAD
Setting up your Real Estate Business Accounting System
Keeping track of property expenses is not an easy task can be easy. You can set up a professional accounting software that can help you track rent, fees,expenses and pay regular bills. You can check out our professional Real Estate E-commerce Kit, with accounting support via;
Identifying your Revenue Streams
You can expect most of your revenue to come from management fees, which is usually a percentage of the rent charged. Other income will come from late fees, key or lock replacement fees, finders fees for bringing in residents, maintenance bill mark-ups, and other smaller fees and charges.
- Management fees; A standardized fee for performing normal property management duties—usually a percentage of the rent (or a flat fee for associations).
- Maintenance markups; A surcharge for acting as a general contractor on maintenance items—usually a percentage of the total property maintenance bill.
- Finder’s fees; A fee charged for finding a new tenant for a vacant unit. This fee is usually paid by the rental owner in weaker rental markets, and paid by the applicant in stronger ones.
- Rental application fees; A fee charged to cover the costs of tenant verification.
- Sales Commission
Structuring your Team / Human Resources
There are two basic models you can set up for your Real Estate Business business. The first is to start off as a general real estate consultant who handles all management responsibilities. That would include sales, leasing, inspections, resident communications, owner communications, fees and rent collection, and maintenance.
The other option is to hire staff members to perform more precise roles. You may have one staff member handling leases and other managing maintenance, with repair specialists or contractors working with them.
Finding and Hiring the Right People
Once you’ve determined which full- and part-time positions you need, it’s time to find the staff that can make it happen. There are two steps to this process. First, you need to get strong candidates in the door for an interview. To do that, write clear job descriptions and use ads that really speak to the culture (and benefits) of your company. Post your ad in the right places for your audience.
To keep your employees happy and boost your business, create a strong company culture from the get go. Provide competitive benefits, stay connected with their needs, and push them to learn and pursue their professional development.
Build Relationships with Landlords
It’s a no-brainer that valuing employee relationships can build a solid business, but so can relationships with property owners in your community.
At the same time, you should feel confident providing your own proactive feedback to owners and identify opportunities for additional revenue streams.
Real Estate Business Software
To scale your Real Estate Consulting Business, you need the right software and solution to get going. Internet technology has made life easier for Nigerian real estate business owners and practitioners.
The location of your office is no longer a barrier, and you can easily do global real estate businesses without restrictions – your office can be in Abuja and be marketing properties in Lagos. There is a growing number of real estate businesses leveraging on the inter-connectivity advantage the internet offers.
Check our Real Estate E-commerce Kit to learn more; https://www.globalclique.net/real-estate-e-commerce-kit-r-e-e-k/
As a property owner or real estate broker, you can market your properties online and also source for alternative properties through the internet.
We have about 100 million internet users in Nigeria. Majority of these users keep sourcing for information on platforms like; Google, YouTube, Facebook, LinkedIn, organized WhatsApp Group etc., smart real estate professionals keep positioning themselves on these high traffic platforms so as to gain attention and strike borderless real estate deals online.
For More on the right software and solution to keep your Real Estate Business going, please check our Real Estate E-commerce Kit via; https://www.globalclique.net/real-estate-e-commerce-kit-r-e-e-k/
Never miss opportunities, real estate is a people business and your success lies much on how far and best you can network within and outside the industry. Don’t miss the chance of taking advantage of the resources around you to grow your business.
Check Real Estate E-commerce Kit; https://www.globalclique.net/real-estate-e-commerce-kit-r-e-e-k/
Growing your Real Estate Business Portfolio
You may have only one property in your portfolio, or non. You need to bring in a lot of leads to start building your Real Estate Business portfolio, you need to attract a lot of people to your Top Marketing Funnel.
Promote your operation and pull in potential landlords, real estate investors and then start talking to them about your services to gain their interest and bring them closer to your corporate real estate business.
Channels for Growing your Real Estate Business Portfolio
- Your Website: Your website is your digital storefront. Optimize it for both property owners and residents to make a great first impression with your branding.
- Content Marketing: Create a blog that addresses owners’ and residents’ concerns, Doing so sets you up as an expert in your field, a trustworthy partner in providing the best services for owners and residents alike.
- Social Media: Get on the right social media channels for your audience and start posting. Engage with your followers by asking them to comment, and always respond to requests, complaints, or compliments.
- Review Sites: If your clients are happy with your services, ask them to write a review on Google, LinkedIn, the Better Business Bureau, or Yelp to boost your reputation and attract more prospects.
- Local Business Events: Make connections and share your expertise to attract new business in your community and stoke word of mouth, especially with local investor groups.
- Paid Search: Target certain search terms that potential clients are using and bid on them to have your name appear first in search.
- Professional Referrals: Encouraging referrals from other real estate professional contacts like brokers or investors is a start to building long term, lucrative relationships.
Setting up your Pricing Model
It’s mandatory to do your research when it comes to setting professional fees for your real estate business. Check out what other real estate consultants are charging for similar services . Look at your own revenue goals to see if you can offer more competitive pricing and consider the types of properties you are taking on.
Major approaches to setting your fee structure in Real Estate Business include;
Understanding your market and having a firm idea of how you spend your resources will give you some more direction on how to best set your pricing.
Structuring your Real Estate Business Contract
Remember this adage: strong fences make good neighbors? solid contracts make stable business relationships. Always prepare a solid contract for every real estate project you want to execute, always have a lawyer look over your contracts to make sure everything is okay.
How to Handle Complaints, Requests, and Disputes
For every complaint, request, and dispute, hear out your tenants / clients and let them know that you take their issues seriously. If it’s something you can resolve or fix, do so as quickly as possible and give your residents a timeline.
The Next Move?
To win in real estate business , you’ll need great customer service, project management and people management skills. You’ll need to keep on top of industry trends as well as local rules and regulations.
You will have to know how to market your business and your properties, pull potential clients and residents down the marketing funnel and get contracts and leases signed. It seems overwhelming right?
You don’t have to go it alone. If you’re serious about learning how to start a property management company, take it piece by piece and always surround yourself with people you truly trust. The only way to go is to build the right foundation for your business that will help you scale up with confidence.
The contents of this article are for informational purposes only. Always do your research and consult the relevant expert before you start a real estate business.
- I created bolajiafolabi.com to teach you about real estate and tech-based business opportunities. I work as a full-time partner at Globalclique, a Real Estate + Technology Consulting Company. I am also a CIO at Ibugbe and Partners, a Real Estate Marketing and Development Consulting Firm in Lagos, Nigeria.