The year has been visited with high inflation, insecurity – which has led to a highly uncertain business environment in addition to the aftermath of lockdown due to the pandemic. The Nigerian currency, the naira has been on a free fall with no hope of any appreciation soon. As a result of this, a lot of people have been scampering for investment options that protect the value of the naira, grow their money and hedge against inflation.
Dutiful and wise investors like yourself always seek opportunities that protect and grow their wealth.
An option to minimize the effect of the depreciating naira is to convert the naira into currencies or investment options that are immuned against uncontrolled depreciation and instability.
Real estate is recognised as one of the asset classes that hedges against inflation, prevent depreciation of cash value, and also grow your cash if done well. It creates the needed stability and is also readily available.
Although not all real estate investment opportunities can hedge inflation, protect the value of money or grow your cash. This is why you must carefully select what property and location, amongst other factors to put your money in.
Now let’s take a look at two important factors that aid the protection of currency value and grow your money in real estate.
1. The property location: For your investment in real estate not to be reduced to liability, you can not afford to invest in just any type of property in any location. You must be able to look beyond the hype and the noise about a location. Cheap or expensive does not also mean profitability. A profitable investment that protects the value of your money and grows it is what you are looking to achieve. Therefore a property in a location that delivers that should be the focus.
Only careful selection, analysis and logical justification show the profitability of an investment in real estate whose goal is to increase the value of money or prevent depreciation. Falling in love with a location or property type at this stage takes the last burner if there is any burner for emotions at all.
2. The property developer or seller selection: When looking to invest in real estate for specific reasons such as protecting cash value, not all vendors, developers or sellers you should buy from. Developing homes in cities are in no measure a small feat. It is a whole gamut especially in cities where real estate contributes majorly to the personal and collective economy of a city.
Creating homes especially where land is scarce, real estate developers have to secure unencumbered land, design a functional concept, get necessary approvals, secure initial funding and find buyers or off-takers. As simple as this process sounds, it is not a walk in the park. It requires courage and tenacity to stay true and deliver on promises.
Interestingly, a developer’s product can be just the perfect fit because it is most times a product created to make a profit for the developer and off-takers especially the early off-takers. Again, multiple units are developed per time in strategic locations with various cost-reduction approaches. Although, not all products by your favourite developers fit an investment purpose.
Therefore, you do not want to jump at any off-plan property opportunity. You also want some level of certainty that your investment in real estate will yield the desired result.
Now the question is how would you know some of the few developers with a win-win offer, who delivers functional buildings and gives a guarantee? How do you find the developer that is worth doing business with?
