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Do Not Pay A Premium to Buy Any Property without Reading This! 7-Point Checklist to Save Costs

Dec 20, 2023

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Do Not Pay A Premium to Buy Any Property without Reading This! 7-Point Checklist to Save Costs

Desperate realtors will always bombard you with "your house will keep increasing in value" or, our favourite, "why you must buy a house in Lekki." That is why we have generated this 7-point checklist to help you make a killing in your next property investment attempt.

1. Buy a home that needs fixing up.

When buying your home, you do not need to plunge in for a 1 billion Naira property in Lekki. At least, this is not the time for it. If you must buy in a high-brow area, wait until there is reasonable proof that you will get your returns within a determined date. The reason is simple: at that amount, there is little exit strategy. You cannot say definitively that in one to five years, you will sell the house for a good profit.

It may end up being more profitable if you go for a property that is in need of life. By "adding life" to an old house, we mean you want to enhance its value and appeal in order to build equity on it.

By buying this kind of home, you are taking advantage of the low cost in order to generate equity. Another piece of advice is to buy one that has reasonable liveability. This allows you to live in the house while gradually improving it.

2. Buy a property you can extend.

Buying a property that has the potential for future extensions can come in handy if your budget does not immediately allow for more rooms and other facilities.

This is a very important point. You must not start off with a big home. You can buy one with the potential to extend. This helps you manage running costs. Only assume more costs when you have the need for the space. Then, when your finances allow for capital investments such as home extensions, you can add them.

When compared against plunging for a bigger home, you may realise that an extension may prove more cost-effective.

3. Only assume the costs you need.

When you think of it with a clear mind, do you currently need a property only because it's close to the Oriental Hotel or "XYZ Secondary School"?

If you have teenagers, then the secondary school may work, but if you are yet to have a child, you do not need that immediately. Home sellers charge 12% more for properties located in "good places," and paying this when you do not have an immediate need for the value will be an undue burden.

4. Leverage Do-It-Yourself options to cut expenses.

If you want to save money, you may consider buying a home that you can work on.

You might be tempted to hire professionals to handle basic fixes such as painting and fixing the door handles, but you could handle them yourselves rather than spend thousands of naira.

You can replace old-fashioned interior decorations without having to spend heavily. Check online, especially Instagram, for DIY templates you can recreate. Visit second-hand stores to buy quality equipment and decorations at bargain prices.

Make sure to highlight the extent of potential renovations during the price negotiation. This is to help you get a better discount.

5. You Must Not Buy New-Build

There is a new emphasis on new-build properties; however, old homes can provide a better financial advantage.

By buying a house that has aged, you may be able to save on costs.

The reason is that property developers who build quality new-build properties take into account a lot of factors when setting their asking prices. Factors like location and property features (which may include ones you do not really need) are considered.

6. Do Not Be Deceived By Location.

You may desire a particular location for your home, but if the average house prices there are beyond your budget, you may consider other options.

If your ideal location is beyond your budget, try finding out what you love most about it. Make a list of them and try going on the field to scout locations that may match your listed criteria.

7. Consider First Mortgage Bank of Nigeria's Rent-to-Own Programme

The Rent-to-Own programme is a federal government programme that makes it easier for Nigerians to own a home.

With this, you can get your property initially on rent and then have the installment on the value of the home removed from your monthly salary.

Find out if you are eligible for this here

 

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We try to make sure that the information here is accurate at the time of publishing. But the property market moves fast and some information may now be out of date. Zerodip accepts no responsibility or liability for any decisions you make based on the information provided. Graphics and images used here are for information purposes - we do not have ownership right over them.

Do Not Pay A Premium to Buy Any Property without Reading This! 7-Point Checklist to Save Costs

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