Real Estate Investment for the Smart Nigerian: Why Land Banking is the Winning Strategy

For many Nigerians, saving towards property ownership feels like the most practical route to achieving their dream home. However, this approach can be counterproductive when inflation and the rising cost of real estate come into play. Let’s break it down with a relatable example.

The Trap of Traditional Savings

If you decide to save ?500,000 monthly for five years (60 months) to buy a house worth ?30 million, it seems like a great plan at first. But here’s the catch: by the time you’re ready to make the purchase, that house may now cost ?40 million or more.

This is a common scenario for many Nigerians. They aim for a long-term savings plan, only to discover that their money loses value while the property they desire appreciates beyond their reach.

A Common Misstep

Let’s say you prefer saving ?100,000 monthly for five years to buy a piece of land in the heart of Lagos currently valued at ?10 million. By the time you save up to ?10 million, that same property may now be worth ?15 million or more.

This is how inflation and market forces keep you chasing after property prices, leaving you frustrated.

The Smarter Alternative: Land Banking

Now, here’s what you should do:

Rather than saving ?500,000 monthly for five years, use that amount to buy one plot of land in an emerging location every six months. In five years, you would have purchased 10 plots of land in growth-prone areas.

The Power of Land Banking

After five years, spend one year selling off 8 of those plots. Let’s assume each plot appreciates to an average of ?4 million (a realistic projection in emerging locations). Selling 8 plots at ?4 million each gives you ?32 million.

Now, you can:

- Purchase a ?25 million property in a prime location.

- Retain 2 plots worth at least ?8 million combined for future value.

All of this is achieved without compromising your monthly income or business capital.

Why Land Banking Works

Real estate is one of the best hedges against inflation, and land banking allows you to multiply your investment over time. By buying land in emerging locations early, you’re essentially positioning yourself for exponential growth as the area develops.

Practical Steps for Success

1. Start Small: Begin with what you

can afford. Emerging locations often offer land for as low as ?1.5 million to ?5 million per plot.

2. Work With Experts: A trusted realtor can help you identify locations with the highest growth potential.

3. Think Long-Term: Real estate isn’t just about instant gratification. It’s about building wealth systematically over time.

Final Thoughts

Real estate investment doesn’t have to feel overwhelming or unattainable. With proper planning and strategic decisions like land banking, you can secure your financial future and achieve your property goals.

If you’re ready to start investing in real estate the smart way, I’m here to guide you every step of the way. Let’s turn your dreams into achievable goals.

— Esther Olubunmi Aluko

Real Estate Investment Advisor

Helping Nigerians Build Wealth Through Strategic Real Estate Investments