Investing For Income Lagos Nigeria - Free Income Property Investing Tips
Let's start with a short definition. What is investing for income? What does this concept mean?
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Income investing is simply the process of deliberately investing in
income opportunities
that generate steady flow of income month on month, year on year.
A good example of investing for income is what is called income property. Income property refers to property that is built or bought for the sole purpose of generating income for the owner of the property. |
To illustrate.
Suppose two different Lagos Nigeria real estate investors each have 50 million Naira to invest in Lagos real estate. Suppose too that the names of these investors are John Faithful And Maxwell Hope.
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John loves the good life and wants to live in a big beautiful house . . . that has been his childhood dream. Consequently, he consulted an estate agent and filled the KYC ("know Your Customer") Form. In the KYC form he specified that he wanted a 4 bedroom detached duplex at Magodo GRA Isheri Lagos Nigeria. His agent promptly found him a property that met his requirements in Magodo GRA Isheri. He fell in love with the property immediately and pays for it right away, after doing due diligence of course. The total cost of the property and the associated fees was 49.5 million Naira. Now Mr. John Faithful lives in his house and is loving it. Mr. Maxwell Hope, on the other hand, is focused on investing for income. He knows life is not a fairy tale. He understands that investing for retirement is the key to having a stress-free retirement. So he is passionate about investing for income. Income property investing is priority for him. So, he went to his estate agent for advice on the best way to invest in real estate with his 50 million Naira so that he can generate the best possible income from his property investment year on year. As an experienced Lagos Nigeria real estate agent, his agent take a look at the income property options available in the market at the time of Mr. Maxwell's request and gave him two options as follows: |
Income Property Option 1
1. Buy a block of four flats each 3 bedroom at Ikorodu, near Agric area of Ikorodu. This particular property available as at the time Mr. Maxwell made the request had . . .
Price: 13 million Naira
Annual income from property = 1.2 million Naira
2. Buy a block of four flats, each 3 bedroom at Oke Ira Ogba Lagos Nigeria
Price: 28 million
Annual income from property = 1.2 million Naira
Total price of both properties = 41 million Naira
Other fees:
5% Agency + 5% legal fee = 4.1 million Naira
Total cost of investment property = 45.1 million Naira
Total annual revenue from both properties = 2.4 million
Payback period = 19 years
Investing For Income - Option 2
Buy a block of four flats each 3 bedroom at Omole phase 1 estate Ojodu Lagos Nigeria
Sale Price: 45 million Naira
Agency and legal fee = 4.5 million
Total cost of investment = 49.5 million Naira
Annual revenue from property = 3.2 million
Payback period: 16 years
The decision: Mr. Maxwell opted to go with option two for obvious reasons and because it met his investing for income requirements. He now occupies one flat of the four flats he bought and receives rent from the other three flats.
In summary, Mr. John Faithful is enjoying his beautiful duplex all by himself while Mr. Maxwell Hope lives with three tenants and earns 2.4 million Naira annually from his property.
In simple words . . . investing for income pays.
One last thing.
I have noticed a sad trend among Nigerians. They buy or build one house and then begin to buy big cars because they feel they have arrived.
Think about it.
Suppose you currently earn five million Naira per annum. When you're retired and have to live on the income from your house, do you think the revenue from that one income property can effectively replace the income from your paid employment?
Obviously not.
Therefore the real estate investing strategy that works is one that involves continually investing for as long as you have the means to do so. So when you eventually retire, you will have a stable income base to live on.
Best Home Business Opportunity
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