Is Real Estate Investment only for the Rich?
INVESTMENT TALK
By Abiodun Doherty
Many aspiring real estate investors often wonder if real estate investment is for them due to the perception that it requires huge amounts to start. This is just one of the several wrong perceptions that have limited many people and calls for the analysis in this piece. This is necessary because a wrong perception is enough to paralyse individuals and make them to give up without even taking a step in the direction of a worthy cause.
Although we do not yet have the statistics, it seems that in Nigeria many low income earners move into their own properties before the middle class. While most middle class professionals pass by opportunities for flimsy reasons, the ‘lower class’ tends to grab as many opportunities that come their way as possible.
Many young professionals just starting their careers set their sights on highbrow areas that they cannot presently afford while repeatedly passing by opportunities in other areas they can afford. A friend nearly missed an opportunity like this several years ago. He was seeking to buy a plot of land and mentioned it to a realtor, who later invited him to inspect the parcels of land available for sale on the outskirts of town.
On the day of inspection, his father-in-law was in the car when they stopped at the location. The place was in a growing area and many of the surrounding properties were not yet developed. In the car, my friend and his wife discussed and dismissed the intended purchase because of the location.
Construction works everywhere……
Then his father-in-law interrupted the discussion and shared how he missed similar opportunities in his younger days. He insisted that they must buy that parcel of land and did not allow them to rest until they bought it.
Today, my friend lives in his property on the land, which is now in the middle of several developments and is worth several millions. The only regret my friend says he has is that he should have taken his father-in-law more seriously and bought more than one plot.
Real estate investment comes in all shapes and sizes and even though you do not have much, you can still find a deal that suits the size of your pocket. And you should rather start small than not starting at all. In other words, a proverb says the journey of a thousand miles begins with a single step.
You need to commit to investing in real estate and start where you are with what you have. It is not necessary to be a millionaire before buying your first property. It is not necessary for you to buy your first property in the most expensive part of town.
Those who see real estate as a wealth-building vehicle will not wait until they become rich before investing because they may wait for a long time. They would rather start investing now so that they might become rich tomorrow.
The key principle behind this is also what drives those who are determined to own their own homes. Whether it is buying land or building a house, your strategy requires focus and consistency and you have to use what you have to achieve your goal.
I once met an elderly illiterate woman in her late 90s, who owns a significant number of real estates. She earned small income throughout her working days, but channelled them to buying land and building properties that would give her rental income.
She compensated for her lack of capital by taking an interest in construction and by doing or supervising some aspects of the construction work personally. She took time to source materials and employ competent workmen. The more she succeeded, the easier it became for her as her rental income increased. Now, she lives on passive income from her properties while enjoying helping the younger generation.
She is not alone. I have met very low income earners achieving their dream of financial freedom through real estate. Many of them have been able to build their own homes, while several who earn several times their income are still locked in the rat race.
A modern house in a Nigerian city
The labourer, barber, painter, security guard and other minimum wage earners, who now own their own properties, prove that real estate is not the exclusive preserve of the rich but the birth right of all who have financial enlightenment and are willing to deny themselves certain pleasures for a while to achieve their dream.
Those who believe it can be done, someone said, and those who believe that a thing cannot be done are both right. In order words, you’ll get what you believe.
In the next 20 years or more, the population of Nigeria will be among one of the highest in the world. Many of the suburbs that are currently despised by the uninformed today will become major city centres.
The upsurge in population will spark off an interest in real estate and the value of such properties would increase. Whether rich or poor, those who invest today are bound to reap a harvest of abundance.
Culled from Punch
Do not wait until you are comfortable before you start investing, but invest in order to be comfortable and maybe rich.