Heygate Associates Nig Ltd: April 2020

1. FEAR FACTOR.

Every investor in every asset class knows that the real gains are to be made when the market is sluggish, when the 'average, and mostly over-cautious investor' is holding back investment decisions. Most serious investors know this is the best time to pick up bargains in all real estate categories, especially prime residential real estate in Ikoyi and Victoria Island and even in other locations. However, if you can afford it, it makes sense to go for the top of the cherry sticking to prime locations or as close to it as possible at this time because that's where the deals are to be had mainly. At the middle-end, there will still be strong demand and not as high margins but great for entry-level investors.

2. CAPITAL GROWTH. SOLID ASSET.
Appreciation tends to happen faster and at a higher margin in prime real estate especially when you buy at a discount. Buying during a recovery economy essentially guarantees you good capital growth if done right. You could buy as an owner-occupier, therefore having a great asset and collateral if needed in the future. Alternatively, you could invest as a buy to let investor. Many multinational corporate and top executives who make up the bulk of tenants in this space continue to require good quality rental properties but their budgets have largely been adjusted downwards, so by buying at a discount, you can attract them with a good value market-related rental, unlike those investors who overcapitalized and have a tough time adjusting to reality. Always do the math to see that the numbers stack up and there are a real discount and upside.

3. MOTIVATED SELLERS/INVESTORS.
To supersize your returns, look for motivated sellers in the current market who want to move their property stock because of high-interest rates and slow sales. There are also opportunities for buying off investors who bought at the early stage of an off-plan project and who may no longer be in a position to complete due to change in financial circumstances. Where the transaction was denominated in dollars, it may also be possible to negotiate a further discount with both the seller and the buyer for cash investors and end up with an exciting investment property with high rental yields and immediate capital appreciation.

These types of opportunities present a gold mine for the investor with a keen eye and ear to the ground. Even if you already invested in a project, which is still under construction, if you have holding power and perhaps an ability to buy more, this might be the time to ask your broker for more opportunities. You never know. Only a week ago, we received a call with an incredible opportunity, to purchase a 4000m2 property in choice Ikoyi, at essentially a giveaway price, the seller was an extremely motivated seller, with many issues to grapple with. A property that was worth almost N1.2bn was sold for almost 25% of the value. It was sold within 24 hours! These types of transactions exist but are very scarce for obvious reasons. (We have a couple of these types of opportunities on Fine and Country's books currently and it's interesting to see how keen investors are to find great deals.)

4. SAFE HEDGE AND STORE OF VALUE AGAINST INFLATION.
For those with mid to long term funds, investing in real estate is a great bet and good protection against inflation. With the equities and bond market going through a bullish season, and inflation still at double-digit although slowing, long term funds are better invested in real estate which is fairly liquid but generally offers solid less volatile appreciation along with good cash flow if it’s a rental property.

5. FOREIGN CURRENCY ADVANTAGE.
With USD and GBP remaining high, Naira denominated transactions still offer real value especially if you have long term ties/plans to Nigeria and can either use the property or rent it out for income.

Possibly the biggest reason to invest is that when everyone is playing it safe, the big boys and girls come out to play, picking up the best deals, creating massive wealth, the proverbial rich get richer while the safe stay well, safe and jumping back on the bandwagon when everyone else is, and usually paying too much when the market fully rebounds.

Contact Us
47 Awolowo Road, Ikoyi Lagos.
Heygate Associates Nig Ltd
Email: heygaterealestate@gmail.com

heygateproperty@yahoo.com

Heygate Associates Nig Ltd

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