Six Things to Consider Before Investing in Buy-To-Let Property

Buy-to-let property is bought with an intention or purpose of renting it out to tenants. It represents an important driver of the property market, through its periodic income generation, growth expectation, value preservation and capital appreciation.

The sector has continue to experience upward trajectory (especially within residential and logistics/warehouse submatkets in Nigeria) as the demand for tenants continues to rise, bringing more opportunities to investors looking for a short, medium to long term investment.

To understand and compete effectively in this sector, the following factors are to be considered before investing:

1. Pre-purchase Inspection - evaluates the current conditions of the property with respect to state of repairs, subsisting interest, market needs assessment, future use, amongst others.

2. Transaction Costs - cash payment, mortgage costs, deposit, legal and broker fees, stamp duty, etc

3. Investment Risks and Legal Responsibilities - loss of rental income, market risk, property risk, management risk, legal responsibility, regulatory requirements, physical and spatial planning requirements, etc.

4. Location Risk and Return Sharing Prospects

5. Cashflow and Asset Value Management - expected income, growth, value preservation and capital appreciation.

6. Operating Expenses, Capital Reserve, Leasing Costs, FOREX Challenges and hocks, etc.

7. Investment performance and market fundamentals.

8. Holding period and Exit Strategy.

9. #askthevaluer

For more on buy-to-let property and commercial real estate market insights and intelligence in Nigeria, call +234-806-877-4629 or visit our website at www.akaa-ng.com

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