5 Things To Consider Before Owning A House

The real estate sector is fast becoming a milestone in the nation’s economy as it is massively attracting a large number of locals, visitors and foreign investors. Owing to this incredible rebirth of the sector which has in time past lied incompetent, owning a house in the country is at its best shot. Hence, it is imperative that you understand what the commitment entails.

While it may sound like an easy way to make money, becoming a landlord is certainly not something you should hurriedly venture into. It requires lots of research, consideration, financing, and also demands lot of time in preparation. In the bid to make house ownership much more easier in Nigeria, Jovago.com, Africa’s No.1 online hotel booking portal shares 5 key things to consider.

Financial Resources

Buying or building a house for rent out to tenants is quiet demanding, especially in a country where bureaucracy can be a huge bottleneck. It is important that you have enough capital as well as opportunities to raise extra funds in the case of emergency before you delve into it. From the cost of raw materials, the possible cost of paying contractors and workers legal fees, as well as administrative charges (costs related to interviewing potential tenants, running their credit histories and checking references), there are a lot of hidden costs to tackle.  In addition to personal savings, you could consider taking a loan from the bank or seeking out investors. The bottom line is: evaluate your finances and ensure you have enough financial resources necessary to complete the project.

Target Tenants

Before you decide to become a landlord; you need to decide on the sort of tenants you are aiming for. Are you looking for the upper class, middle class or are you looking to build something for those on a low budget? The type of tenants you are aiming for will help you determine the kind of property you will be constructing, it will also help you consider the kind of marketing plan you may need to adopt. For instance, if your target tenants are dignitaries and people of high esteem, the rental property has to be located in a high-brow area and must be built and decorated with high-end equipment, so they can attract quality tenants.

State and Local Laws

Nigeria is a large country and while there are national laws, certain parts of the country have their specific state and local laws which either directly or remotely affect real estate as they regulate tenants’ and landlords’ rights and responsibilities and dictate the things that must be covered in the rental agreement. Ensure you know every important detail listed in the local and state laws and guidelines. Some areas require that you pay special fees or taxes for building rental properties.

Property Management

How you want the property to be managed is very important to avoid some hiccups along the way.  The property will require repairs and maintenance at intervals, the tenants will require a point of call and a system has to be in place for rent collection. You can either decide to manage the property on your own (if you are certain you have time to dedicate to the role) or you could consider using an agent or hiring a property management company to manage it for you. If you chose any of these, ensure you put them on a contract and ensure you peruse the term of the contract carefully.

 Insurance

The importance of buying insurance for your property cannot be overstated. From buildings and contents cover to liability insurance,  loss of rent protection, and even home emergency cover,  it essential that you protect yourself and your property with these insurance.