From Zero to Property Owner: A Beginner’s Guide to Real Estate Investment in Nigeria

Why Real Estate and Why Now?

Property is one of Nigeria’s most resilient asset classes. It can preserve value against inflation, generate stable rental income, and appreciate over time. You can start small (plots on the urban fringe) or go light (REITs), and scale as your cash flow grows.

 

Key Concepts You Must Know

  • Land Use Act (LUA) & Tenure: All land in each state is held in trust by the Governor. Private rights come through a right of occupancy—typically a 99-year lease.

  • Certificate of Occupancy (C of O) vs Governor’s Consent: C of O is the government’s first grant of title on a parcel; any later sale needs the Governor’s Consent endorsed on the Deed of Assignment.

  • Core Title Documents: Survey plan, Deed of Assignment, C of O or Governor’s Consent (or Gazette/Excision where applicable), and evidence of registration & stamp duty. Always verify each one before you pay.

 

 

The Main Ways Beginners Invest

  1. Land Banking (Buy & Hold Plots): Acquire titled plots on growth corridors and hold 2–5+ years. Lower entry cost, minimal maintenance, but requires patience and strong due diligence.

  2. Off-Plan Purchases: Pay developers in stages while they build. Potential discounts, but confirm approvals, developer track record, and contract protections.

  3. Buy-to-Let (Long-Term Rentals): Apartments or mini-flats in locations with steady demand (universities, CBDs, industrial hubs). Focus on reliable tenants and realistic yields.

  4. Short-Let/Serviced Units (Airbnb-Style): Works near business districts, airports, and tourist pockets. Higher returns but requires active management.

  5. Flips (Renovate & Resell): Requires renovation skill, speed, and cost control.

  6. REITs (Real Estate Investment Trusts): For exposure without owning a building. Lower ticket size, professional management, and liquidity on the Nigerian Stock Exchange.

 

 

How to Finance Your First Deal

  • Save & Stagger: Start with land or REITs, then roll gains into bigger assets.

  • NHF Mortgage via FMBN: Employees who contribute 2.5% of basic salary for at least 6 months can apply for loans—up to ₦50 million, with tenors up to 30 years at affordable rates.

  • Developer Payment Plans: Many off-plan projects allow 12–36 month installments.

  • Cooperatives & Employer Schemes: Pooling lowers the cash burden and improves bargaining power.

  • Bank Mortgages/PMBs: More expensive than NHF but faster; compare rates and terms.

 

 

The True Costs (Beyond Purchase Price)

  • Stamp Duties: Payable on agreements, mortgages, etc.

  • Registration & Consent Fees: Vary by state.

  • Professional Fees: Agency and legal fees (commonly modeled at around 5% each).

  • Planning & Building Approvals: Needed before construction.

  • Ongoing Taxes on Income & Exits:

    • Withholding tax (WHT) on rent, usually 10%.

    • Capital Gains Tax (CGT) on property sales at 10% of chargeable gains.

 

 

Bulletproof Due Diligence Checklist

  1. Confirm Ownership: Search the state land registry and meet sellers physically.

  2. Verify the Survey Plan: Check coordinates with the Office of the Surveyor-General to ensure the land isn’t committed or acquired.

  3. Validate Title: C of O for first grants; Governor’s Consent for subsequent sales. If excised land, confirm Gazette.

  4. Planning Status: Confirm permits for development.

  5. Money Trail & Stamping: Pay via traceable channels only, and stamp/register documents within deadlines.

  6. On-Site Checks: Boundary confirmation, beacons, drainage, access roads, and encroachments.

 

 

A Simple 90-Day Action Plan for First-Time Investors

Days 1–7: Set Your Target & Budget

  • Choose a path (land banking, off-plan, buy-to-let, or REITs).

  • Define budget + buffer for fees.

  • If eligible, start NHF contributions.

Days 8–30: Deal Sourcing & Screening

  • Shortlist 3–5 properties in one area.

  • Compare rentals, infrastructure, and site conditions.

  • Visit morning, evening, and weekends.

Days 31–60: Deep Due Diligence

  • Search at land registry and Surveyor-General’s office.

  • Validate titles and approvals.

  • Engage a property lawyer for documents.

Days 61–90: Close Properly

  • Execute Deed of Assignment.

  • Pay stamp duties and register title.

  • Apply for permits before development.

 

 

Risk Radar: Common Pitfalls

  • Unverifiable Titles: If documents can’t be confirmed, walk away.

  • Family Land Without Right Signatories: Get all heads and witnesses.

  • Omo-Onile Issues: Insist on beacon confirmation and fence quickly if permitted.

  • Off-Plan Without Approvals: Avoid unapproved projects.

  • Ignoring Taxes: Plan ahead for WHT and CGT.

 

 

Where Beginners Can Start With Small Money

  • REITs: Buy units through a broker.

  • Co-Own Plots: Join credible cooperatives with proper documentation.

  • Affordable Land: Target growth areas with infrastructure coming up, after due diligence.

 

 

Frequently Asked Questions

Q: Do I need Governor’s Consent if the land already has a C of O?
A: Yes. A C of O covers the first allocation. Any resale requires Governor’s Consent on your Deed.

Q: Can I build immediately after buying land?
A: Not until you secure a planning permit.

Q: How is rent taxed?
A: Tenants usually deduct 10% withholding tax from rent and remit it to FIRS/State.

Q: If I sell and make a profit, what tax applies?
A: Capital Gains Tax at 10% of the chargeable gains.

 

 

Final Word from SEB

Start where you are. Pick one strategy, do disciplined due diligence, and close properly. Your first clean deal is better than three “cheap” mistakes.

At SEB, we help you go from site visits to stamped deeds with expert support, checklists, and templates. Join our next cohort and take your first confident step from zero to property owner.