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Real estate needs proper regulation to develop sector — Finnih

Ayodeji Finnih is the Managing Director, KFAO Corporates Services, an anatomist turned real estate lover. She never practiced her original  profession, but helping a friend to acquire her first home ignited her passion in real estate a couple of years ago. In this interview with Nosike Moses, Finnih revealed the prospects, challenges and way forward for real estate sector in Nigeria. Excerpts:

Ayodeji Finnih

 

What do you intend to do with KFAO Corporates Services in Nigerian business environment?

The fact remains that we are still very young and evolving – we are barely 6months and I can tell you boldly that KFAO Corporates Services in the shortest possible time would be able to make even a mediocre dig the gold in real estate sector. We are here to stay and to make the real estate business the most thriving and add value to the economy of our dear country Nigeria.

In as much as we are in real estate for the business of it, we won’t  forget to be at the mercy of our low earning prospective clients.

What is your view on real estate business in Nigeria?

Other failed sectors have really paved way for the rapid evolvement of the real estate sector within a very short while, though we still have a long way to go to make the sector fully explored and more profitable. If there’s any business that’s truly lucrative and extremely profitable in Nigeria, it has to be real estate business.

Most of the top billionaires in Nigeria are real estate investors. Real estate business is a money spinner to the highest level, presently booming in Nigeria and people are making millions in it. It’s a good thing, a whole lot of people are embracing the business in recent times. This I believe has come to be because other sectors that had led in the lines of investments  earlier in the 80s and 90s have failed.

How do we improve housing scheme for the masses?

It might not be possible to meet everyone’s need in this regard but it’s possible we have an impact in the life of a reasonable number of the masses. In developed world, government are responsible to providing affordable housing schemes but here we live everyday to fight our own battles!

Although the government efforts are not really felt by the masses, organisations should take it as a responsibility to provide affordable housing schemes for their staff/members through cooperatives. I have some organisations I’m working with presently to get this achieved for their staff/members while they pay at convenience over a period of time.

What should one consider when buying a house?

For anyone considering investing in real estate, one of the first questions you will want to ask is: What Return On Investment will I get from this property or, what is its yield? Yield is an important way of measuring the future income on an investment. The return you get now and in the future is a key factor in working out whether to invest or not. From time immemorial, real estate has shown to be an excellent source of  profit through the increase in investment property value over time.

Number one, don’t look at ‘cost’ but ‘yield’. There is a huge difference between the cost of real estate investment and its yield. Do not consider the cost but rather consider what the yield of your investment will be in the nearest future. One other important thing to consider is Location. We have all heard the commonly used phrase ‘location, location, location’. In fact, it is widely believed to be the single most important factor to be considered in real estate investment. However, it has been used so frequently that the importance has started to become watered down. The reality is that without a good location the best numbers and the best data will quickly become irrelevant when buyers show no interest in the property.

Location dictates everything else in the transaction and with the  property. If the property is located in a nicer area, the property will be in greater demand and can seek a higher selling price. The same

property located in a diminishing area will not have nearly the same appeal and won’t create nearly as much demand. You may pay a little more when you buy, but to buy in a better location means you have many more profitable options down the road.

The location in which you invest will dictate how you invest and what your goals are. If you are stuck evaluating a property, go back to basics and look at the location. This is a tried and true evaluator that seems simple enough, but it’s still the most important factor in real estate. “Don’t buy in a good or bad neighborhood, buy in a neighbourhood that you can see the future of”.

Are there challenges associated with real estate in Nigeria?

No matter how excellently a business does, there would definitely exist challenges. The challenges with real estate in Nigeria are enormous and it could take a whole day talking about them, and this has brought about limitations to its potentials.

First, I’ll talk about the continual devaluation of Naira against Dollar which results in losses for developers who source materials outside the shore of Nigeria. This effect would have been milder if

materials were sourced for locally. Land owner Omonile and Land grabber Ajagungbale: This remains a serious hindrance to the development of real estate. Its effect is insecurity and unrest. Like I said in one of my interviews, government policies and land registration processes would continue to drag real estate in Nigeria far behind its potential. Documentation processes can last longer than necessary. It takes years in most cases and the cost of documentation can be as  much as the cost of the land sometimes.

What is your assurance to your  potential customers?

To a reasonable extent, I can beat my chest to the fact that the investments of our potential customers are safe with us. Our watchword is integrity and we live up to that. The fears of most investors has always been that of Omonile and government interference. I’ll digress a bit to documentation as it relates with government interference. The least title on any of our property is Excision in Process.

When a land is undergoing excision…

Excision is the process of converting a land from acquisition status to free status. When the government wants to do a new project in an area, it does a global acquisition of a large tract of land in the area. After the project has been done, the remainder is then given back to the community. That process is called an excision. After the excision has been granted, it is then gazetted. After it has been gazetted, then a *C of O* can be processed and obtained. When a land is acquired and committed, nothing can be done to change its status. When a land is acquired and not committed, it is possible to change from acquisition status to free status.

If a land is committed, it will not be possible to have an excision file number. If it is not committed, then an excision can be processed and obtained. Buying a land “undergoing excision” is an investment. It is more affordable because the title is not as assured as other more expensive  options.

When the excision comes out, the price shoots up. It’s advisable to introduce properties undergoing excision to experienced property purchasers who understand the dynamics of land  titles. I usually encourage first time buyers to get property options with more assured titles.

Our properties are located in prime areas where there are major  Socio-economic Project which would are drivers to a huge Return on Investment. Irrespective of whatever price or title, we site our

Properties in locations free of any Omonile wahala or government interference


Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.