SAVING FOR RETIREMENT WITH REAL ESTATE INVESTING.
Today, we are going to share an invaluable information on what it entails to save for retirement with real estate investment in mind. Is it a good investment plan? Yes, it definitely is. Do I have to be a billionaire or multi-millionaire to go into this type of investment? No you certainly don’t.
As we all know, Nigerian workers aren’t the most envied in the world at the moment. Take into consideration the low levels of income and savings, the ever increasing family, financial, and social responsibilities, then you can get a glimpse on how planning for retirement can be a challenge to the average Nigerian.
The average life expectancy for Nigerians is believed to be in the region of 50-55 years ( The World Bank pegs it at 54.33 years), a decent number of Nigerians live to their 80s and 90s. Unlike developed Western Nations, Nigeria as no functional social security system to properly care for the old, the young unemployed, and very disturbingly, the disabled. No health insurance, and already poor medical facilities, depreciating at an alarming rate. Based on the aforementioned inadequacies of our government, we definitely cannot afford to leave our future delicately to chance or fate, and hope your pensions see you through. The onus is on us to plan ahead for our retirement.
Real estate investment is certainly not a business reserved for young entrepreneurs. Retirees can also succeed investing their money in real estate. Rented properties can be a great avenue to generate retirement income. However you also need to understand that nothing is 100% guaranteed. Every investment carries it’s own risk, but with the right knowledge, intuition, skill, and guts, you are bound to succeed in your restate career.
DEVELOP YOUR REAL ESTATE KNOWLEDGE, SKILL, AND INTUITION.
First, you need to acquire the knowledge, because like any other profession, you need to know what you are doing. Investing in real estate today in Nigeria, is a great way to earn a fair amount of passive income, but you must be ready to invest your time and effort to studying. There is no substitute to knowledge. Go for seminars, read books by real estate experts. Two authors I suggest you read their books are John T. Reed ( How to get started in Real Estate investing), and Robert Kiyosaki ( Rich dad, poor dad, and also Unfair Advantage). You can also use Google to find great materials on real estate investment.
Understand the fact that their are numerous approach to real estate investing in Nigeria. You can either speculate ( find a decent piece of land, and flip for profit, or a building you can renovate and quickly sell in a rising market), or search for revenue generating properties ( could be a hotel, Event Center, commercial office space(s), apartments or residential houses) and rent it out. You acquired knowledge, and skill plus your available capital will determine what method of approach you will apply in your first real estate investment.
There is a saying used in real estate terminology that you have probably heard countless times. Even without extensive knowledge of real estate investment, you probably know how important the saying is. It is used by learners, upstarts, and experts alike. The saying is “location, location, location is key”. This saying can never be over emphasized, you cannot afford to buy a piece of land or property deep in a village in Osogbo, without any due research or familiarize yourself with the area or environment.
You need to have an intuition about the areas, and neighborhoods you hope to invest in. what are the prospects? can you recognize any major building projects or development going on around? ( such as Factories, Refineries, Universities). Developing your intuition to know places of interest, and areas to avoid is a game changer in your real estate adventure
It is what determines if you succeed or fail, It can’t be bought with money, you can only get it through a combination of knowledge, skill and time (experience). It is why I advocate an education in real estate investment. Learn everything there is to know from; Property Tax, to how to use Leverage, and how to identify and calculate assets and liabilities. Knowledge they say is power.
ADVANTAGE OF USING REAL ESTATE INVESTING AS RETIREMENT PLAN.
Real estate investing for retirement has a whole lot of advantages. Capitalizing on them is a great way to grow your income in a quick and safe way. I do not want to bore you to sleep, so will be sticking to the main points.
YOUR PROFIT CAN BE ADJUSTED FOR INFLATION.
I can’t say for other states, but property owners in Lagos have this tendency of increasing rent every two years. There are a number of reasons for this. One of which is to keep pace with, or better still surpass inflation. This is one of the lucrative reasons to go into real estate investment. There are not that many investment platforms that lets you factor in inflation when calculating returns. Stocks and Bond investors need to subtract out inflation to arrive at their “real” profit
If you purchase a stock or mutual fund, you can’t say for certain how your investment would perform. Best you can do is to get as much information and research done on the company, and hope they do great in future.
You don’t have that problem with real estate investing for retirement, you can actually predict with precision your returns from your property. There are market research tools that can precisely forecast your future income and expenses.