RENTAL STABILITY, FOREX VOLATILITY AND THE NIGERIAN INVESTOR

One of the fundamental principles of investment is to never make permanent decisions based on temporary situation. A perfect example is the recent economic recession that hit the country, watering down many investment portfolios. Some investors, who do not understand the dynamics of investing in the 21st century, joined the bandwagon of naysayers and hedged their investment on the weakness of the Naira. They have their pockets to blame, and they are now lamenting as the Naira went from 530 to 380 in less than 5 days.

Before now, the Nigerian economy was almost grinding to a halt; especially with oil being our major source of revenue. The anticipation of a recession made lots of people make permanent investment decisions. Some wives left their husband for greener pastures. Some company had to lay off their best hands as they were unable to foot the running cost of the organisation. Things went from bad to worse. However, with the vision of the President Muhammadu Buhari led administration, and a great political driver like the Vice President, Yemi Osibajo and his economic team, the country is gradually showing signs of improvement as the Naira gradually gains weight against the Dollar.

 Big brother OPEC didn’t make things better either. The militants graduated from oil bunkering to pipe bursting. Those who invested heavily on oil saw their investment crumbling by the day. The stock market also took a downward plunge with investors recording massive losses. Interest rate skyrocketed, with interest on fixed deposit remaining FIXED. (Who is benefiting? Bankers or customers?). Unlike other investment portfolios, the real estate and property market was slightly affected but properties in the Ikoyi axis, especially in Banana Island, have enjoyed great stability as their prices have consistently held its value.

 At Sujimoto, the foundation of our success is guided by three fundamental principles which are effective in attracting clients and property investors. These are LOCATION, PRICE AND QUALITY. Our only mission is always to exceed our customers’ expectations by providing exceptional real estate at an affordable price.

If you want to learn how to bake bread, you speak to a baker, but if you want to know about luxury real estate, speak to Sujimoto. The same rule applies when you want to learn about investment, you need to consult someone who has amassed substantial wealth and successes by investing in several businesses. Andrew Carnegie, an American industrialist who led the expansion of the American steel industry in the late 19th century, and is identified as one of the richest Americans ever, said; “More money has been made in real estate than in all industrial investments combined.” This same industrial giant was once quoted saying; “90% of all millionaires become so through owning real estate.”

One vital lesson to learn from all of these as an investor is that, those who depend on the weakness of the Naira will have their pockets to blame as real estate has proven to be the safest investment that guarantees the best ROI, and security. (No one can take a house from Lagos to Ibadan).

While some may opine that there are lots of empty apartments uninhabited as a result of the recession, many of these empty apartments are substandard and were built on the principle of profit maximisation rather than quality creation. The prolonged economic recession and the crash of the forex market have forced Landlords and Caretakers to reduce the prices of their apartments.

 Recently, a client commissioned us to help look for a good property and we realised that there are lots of extremely expensive Terraces and apartments, with terrible finishing. It is like offering a Toyota for the price of a Bentley. This shocking realisation prompted us to set up a small project somewhere in Ikoyi. With this new project, which is 100% sold out; we have been able to bring 3 major principles of real estate into one space: incredible location, great finishing, and exceptional price.

As the economy gradually rises from the jaws of a recession, it is apparent that the housing market will experience a great boom as more savvy investors are buying heavily into real estate – the new oil. However, Investors must be very sure they are investing into the right property that will guarantee value, great returns, and peace of mind, at a great price.