Nigeria Content Online

To avoid taking
regrettable decisions in real estate investment, experts in property
management said it is necessary for real estate investors to do
critical asset analysis prior to any form of purchase.

When Adebisi
Akanni, a banker with one of the new generation banks, moved with his
family to his newly built three-bedroom apartment at Agboyi, Ketu area
of Lagos State three years ago, he never imagined he would go back to
tenancy level, or squat with a friend.

While admitting
that he paid less attention to warnings that the house he spent
millions of naira to build was located in an area prone to flooding,
Mr. Akanni said the recent flood that displaced over a 1,000 people in
Lagos, which also affected his property, took him by surprise.

“I really can’t
believe this happened to me. I bought that land years ago when it was
affordable. We waited to see if there will be any serious flood
occurrence before we built, but we never experienced any. That was why
I went ahead to build,” Mr. Akanni said, adding that after three years
of been called a landlord, “flood has turned my family to squatters
with a pastor family.”

Proper asset analysis

Experts said that
with proper asset analysis, prospective investors will know the most
common mistakes usually made and how to avoid them, adding that such
assessment will also help limit risk and ensure a good return on
investment.

Olusegun Oriade, a
business development executive at Pison Housing Company, a real estate
firm, said the persistence of the economic downturn calls for decisive
investment analysis before any business is done. He said a clear
understanding of market trends is essential to property investment.

“The credit crunch
persists and this calls for critical investment analysis prior to any
form of investing. This involves taking time to conduct market needed
analysis. It is about understanding government’s master plan for
specific area of interest.

“Location or
geographical considerations which deal with political happenstances,
policies, land administration, ecological matters, development control,
and physical planning are issues to be considered,” Mr. Oriade said.

He said most of the
flooded areas of Lagos State are government acquisition lands which
mean that these lands are without certificate of occupancy.

“The irony is that
some of these lands have building plan approval, and a larger
percentage of these are informal development,” he said.

He added that while nothing is wrong with informal development, many risks are attached to such development.

Mr. Oriade said an
investor must patiently conduct an in-depth search on any property. The
search must go beyond land registry and it must include physical
planning by the ministry of environment to determine its viability.

“It is profitable to commit resources to these searches than to suffer losses that are preventable,” he said.

‘Engage professionals’

A building
consultant at TeeA Investment, a real estate management company, Toyin
Adedoyin, said not doing due groundwork “can cost an investor a lot of
money or loss of lives at time.”

Mr. Adedoyin said a
proper inspection and evaluation of the property must be carried out by
professionals before, during, and after raining season to assure safety
for the owners.

“We often tell our
clients to be patient before paying for any property, particularly
those who like highbrow areas that are prone to flooding,” he said.

Nduese Essien, the
minister of lands, housing and urban development, also said prospective
investors should engage qualified professionals in the building
industry.

“If real estate
investors adhere to established procedures, there would be drastic
reduction in the recurrent cases of collapsed buildings in the
country,” Mr. Essien said.