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The real estate value that silently affects monetary returns

A skewed perception of real estate value makes it difficult to focus on a bigger picture or make accurate judgments.



Where to buy Real Estate in Lagos in 2021, Nigeria's Real Estate Sector recorded positive growth after three year low, Real estate: Declining credit reflects underlying weakness 

There are 24 reasons why we invest in real estate and they are not peculiar to any tribe or race. As long as you are a human being making real estate decisions, your reason will be found on this list.

It is a widely favoured belief that monetary reward is the only pay-off of real estate investment. But there is another kind of return, rarely talked about, which accounts for more than half of the reasons why you would consider investing in real estate.

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This other kind of return often makes up for the down-times that characterize periods of negative or no financial returns even though it could sometimes be considered a hindrance to the effective delivery of monetary returns on your investment.

I refer to this other kind of return as Sentimental Value.


Sentimental value is defined as the value of an object deriving from personal or emotional associations rather than material worth. Hence, in real estate investment, you are either getting sentimental or monetary value; or both.

READ: How to own your home in 5 years without a mortgage

Sentimental value is also your inflated opinion of your piece of real estate’s value. The value of your real estate, in your opinion, can be related to a number of things peculiar to you as an individual. These could range from the sacrifice and discipline it cost you to acquire a piece of the earth or to set up a real estate business which is often known and considered by you alone.

This type of value tends to be subjective therefore, it finds its way around assets through the lifetime of the asset even as the asset moves from one buyer to the next buyer.

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The creation story both from the religious or scientific perspective shows that there has to be a planet to sustain human life. It must have required some great effort to have the first house or bridge or wall. The earliest real estate objects have become artefacts in Museums or monuments around the world. These edifices have nostalgic stories behind them.

The labour invested in the acquisition of real estate often invokes an incredibly nostalgic feeling in the owner. It becomes a priceless asset, largely because of the underlying purpose of purchase, efforts and energy invested as well as the investment journey.

READ: Attention Stockbrokers: How to use Twitter consumer sentiment to predict the Nigerian Stock Market

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Most real estate investments come at higher financial costs than they should. The extra cost is usually overlooked because of the sentimental value attached to the real estate.

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Conducting an objective evaluation of how much a real estate investment is truly worth at the prevailing rate may be impossible when the investment is induced by deep-rooted emotional motivations that are often denied or, in many cases, unknown.  This is considering the variations in the market value of properties within a location.

READ: Key things to consider when investing in real estate investment trusts

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Sentimental value tends to be subjective therefore, it finds its way around assets through the lifetime of the asset as the asset moves from one buyer to the next buyer”.

A skewed perception of real estate value makes it difficult to focus on a bigger picture or make accurate judgments about its monetary value given a current economic reality and real estate cycle which are always subject to external factors.

READ: Real Estate: A universal convertible survival tool

Of the 24 reasons for real estate investments, it is important that you identify which have influenced or can influence your real estate investment decisions as well as which of them may no longer be sentimentally or financially profitable.

Your reason may no longer guarantee any higher monetary compensation you may desire at a current or future sale. An attachment to the subtle sentimental value of a piece of real estate is partly responsible for many abandoned properties.

READ: Key ‘side-hustles’ Nigerian Bankers supplement their income with

The initial listing of an asset for liquidation at a rate way higher than the perceived market value only to change it later may suggest the existence of a defect to potential investors who are often smart enough to delay their investment decision in anticipation of a further drop in price. You definitely don’t want to deal at a loss.


It is best for every investor to put in perspective the kind of values an investment is expected to deliver and for how long that value will be profitable.

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To access the 24 reasons, and tips on how to manage your reasons in the investment process, send “24 reasons” to 07062028677 via WhatsApp.

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Real Estate

Lagos Real Estate Regulations: The peaks and the dips

The regulatory process also appears to be one that will help recover more taxes from real estate transactions and practitioners.



Real Estate in Lagos

The Lagos state government recently enacted a Law: Lagos State Real Estate Transaction Regulatory Authority Law, which will curb activities of unscrupulous real estate agents and those who pose as estate developers to scam investors.

A lot of citizens have fallen victims to fictitious real estate investment opportunities that are non-existent in reality. Hence, this law will be enforced by the Lagos State Real Estate Transaction Department to avoid repeated occurrences.

READ: CBN says 17 banks to restructure over 32,000 loans

Although, the department has now been upgraded to an agency called Lagos State Real Estate Regulatory Authority (LASRERA). The regulatory agency will coordinate, monitor and regulate the activities of practitioners in the real estate business in Lagos.

The regulatory process also appears to be one that will help recover more taxes from real estate transactions and practitioners. The government should track real estate transactions for tax remittance and inventory purposes. But with a process that improves real estate business efficiency.


READ: Bill to regulate real estate scales through 2nd reading in Lagos Assembly

Section 11 and 12 of the Code of Conduct states that;

(11) Agency fee(s) shall be as follows –

(b) Sale or Purchase of interests in Land and Buildings where two or more agents are retained by the owner/vendor for the sale, the fee shall be the 15 per cent of the total proceeds of the sale.

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(12) A Licensed Real Estate Practitioner shall not prepare any legal document pertaining to any transaction handled by him but must be prepared by a Legal Practitioner and the fees shall not be more than 12.5 per cent of the total consideration.

READ: 7 out of 10 bank loans given to Lagosians 

This means that each principal in a transaction would bear a certain cost of at least 15% fee to realtors or brokers. The party who must also have an attorney will add an extra cost not more than 12.5%.

These closing costs are not the only cost associated with a real estate sale or a buy transaction. There are several other expenses associated with a real estate business or transaction. Any cost on a real estate transaction affects the asset value and a part of these costs recurs every time a piece of real estate is bought or sold.

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READ: The real estate value that silently affects monetary returns

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There is an agelong deficit in housing inventory besides the over $900B dead capital. An increase in real estate transaction costs put a nail in the coffin of the already dead capital. This means the hope of resuscitating the dead capital is now almost zero.

Without a doubt, there is a need for proper inventory and records of real estate transactions. There must be other efficient ways to achieve an updated inventory, while also ensuring proper taxation where necessary.

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For instance, in enforcing the land use charge in the year 2018, Lagos State embarked on an activity to capture the assessed value of properties in the state. The activity was carried out working with stakeholders in the state such as Estate Surveying and Valuation Companies. This shows that there can be a more efficient way to capture real estate transactions in the state without much increase in the transaction cost.

The 15 per cent fee as stated in Section 11b of the Code of Conduct would also appear as an incentive. To draft in for formal registration, more real estate professionals in the brokerage business. Although, this does not mean tax remittance will come naturally.

Going by the 27.5 per cent least added cost per sales transaction as suggested by the Code of Conduct, to an investor, there has to be a strong justification and value exchange for such fees. A real estate investor will prefer to reduce these fees as much as they can and in any ways possible; although, caution is advised here.

There are lots of creative ways to reduce transaction cost while getting the best value and also preventing falling victims of a scam.

A few ways to keep transaction costs low while still getting quality services are;

  • Be real estate investment literate. Profitable real estate investing is not rocket science neither is it a walk in the park. For a first time or repeat investor, sufficient knowledge through education or experience is key.
  • Set a clear real estate goal. A goal is a picture of the desired outcome with steps on how to get the desired outcome.
  • Integrate teams and collaborate where possible on aspects of your real estate project or purchase regardless of your portfolio size.
  • As a major decision-maker in your real estate purchase, you can leverage on relationships that you have built with experienced professionals where applicable.

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Real Estate

Federal Mortgage Bank disburses additional 8,700 homes, N112 billion in three years

NHF collections increased by 80% or N186 billion to reach a cumulative amount of N418 billion as of September.



In a bid to boost the delivery of affordable housing for Nigerians, the Federal Mortgage Bank of Nigeria (FMBN) has disclosed that it spent an additional sum of N112 billion and built additional 8,700 new homes between 2017 and 2020.

This information was revealed in a statement issued by the Head, Corporate Communications Group of the Federal Mortgage Bank of Nigeria, Mr. Lawal Isa, on behalf of the Managing Director, Mr. Ahmed Dangiwa.

Highlights of the statement:


  • The total sum of N265 billion has been disbursed as housing fund by the Federal Mortgage Bank of Nigeria. This sum indicates an increase of N112 billion or 74%, up from N152.5 billion disbursed by the institution as of 2017.
  • About 8,700 new homes have been built between 2017 and 2020, representing a growth of 43 percent to attain a cumulative of 29,133 funded housing units.
  • Within the period, the National Housing Fund (NHF) collections increased by 80% or N186 billion to reach a cumulative amount of N418 billion as of September.
  • Home renovation micro-loans increased by over 2,000% from about 2,600 loans to about 56,000 loans in the last three years.
  • About 570,000 contributors had been added to attain a contributor base of over 5.1 million NHF subscribers.
  • 34 out of the 36 states of the Federation were compliant regarding workers’ contributions, with five states resuming contributions within the past three years.

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Real Estate

How to own your home in 5 years without a mortgage

The invest-to-homeownership option is ideal when you do not have enough cash to buy a home in one fell swoop of payment.



Home ownership is usually top on the list of all the reasons why people want to invest in real estate, globally. Real estate is in no doubt an indispensable tool designed for the support and sustenance of human life. It is also a tool created for mankind to express creativity, desires, and ambition. When the Coronavirus pandemic spread across nations, governments were forced to give shelter-in-place orders, causing us all to stay in our homes for months. This shows that homes are indeed a necessity. Yet, it is beyond reach for many people in developing countries who desire to own one.

Mortgage loans are one of the common options for homeownership in many countries because it is believed to create some ease of home ownership. In Nigeria, mortgages have not been effective. In cases where it is accessible, it is expensive.

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The case for mortgage ineffectiveness is a result of many underlying issues bedeviling our development as a nation. This article seeks to provide you with a creative homeownership option that is legitimate and efficient in achieving your real estate investment goal as an individual seeking to own a home.

The mortgage option requires you to provide equity of 20 – 30 percent of the total value of the home sale price. This also means that the home will be the collateral for the loan as you increase your equity over a period of years. Loss of income or ability to earn an income during the tenure of the mortgage translate in most cases to losing the home to the lender.


READ: Union Homes REIT reports 34.5% dip in profit

The loss of ability to earn income high enough to repay a mortgage is bad in itself. Losing that home to the lender makes it worse as you would have lost your homeowner status and in some cases, the equity.


An alternative to the mortgage option is the invest-to-homeownership. It is a creative real estate investment option. It allows you to invest equity with a real estate business or private home developer. The equity is used to execute projects and turned over until the equity builds up to an agreed amount required to own your home. This option creates leverage that is not available in the traditionally popular options.

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The invest to homeownership option is ideal when you do not have enough cash to buy a home in one fell swoop of payment. It also does not need you to pay interest. Instead, the returns on your equity accumulate towards your home purchase. The real power of compounding in real estate comes into play.

READ: Everything you need to know to become a real estate investor

Five major conditions that make invest-to-homeownership work

1. Your choice of the real estate developer

The developer must have a track record of executed and sold-out residential units. Invest-to-homeownership relies a great deal on the integrity of the developer. The first test of the integrity of a real estate entity is the track record and the quality of claims.

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You should choose based on qualitative pieces of evidence and not emotions or appeal.

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READ: The real estate value that silently affects monetary returns

2. The project locations.

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The developer must have ongoing residential projects in strategic locations of the city. These projects must be real and positioned to sell out. This is because not all locations are profitable for all kinds of real estate business goals.

3. The readiness of the developer to work with you

The developer must be desirous to accept your equity on respectable terms. This is because people management can sometimes be a tall order. If managing a bank loan will be easier, a developer may choose the bank above accepting to use your funds to execute projects thereby growing your homeownership equity.

READ: What BBNaija winner, Laycon can do with N30 million  

4. Your mindset and belief

Many people, hold the belief that owning a home in Lagos, Nigeria is hard. This belief sets you up to miss creative opportunities.

Invest-to-homeownership option is a simple yet effective way to achieve a homeownership goal. A cheaper option that takes money out of your pocket fewer times than the popular mortgage option.


READ: Landlords offer incentives to counter “work from home” induced vacancy rates

5. Ability to adopt and trust the process.

Your readiness as an intending homeowner and willingness to trust a transparent process when you find a developer who offers you one. The real estate investment terrain in Nigeria is still evolving. With many unpalatable experiences dotting the landscape. These experiences are due to a combination of several issues. Some real estate stakeholders have been able to master some fundamentals of the evolving terrain and can minimize foreseeable issues. Your ability to identify a trustworthy process, helps you harness the opportunity to own your home interest-free.

READ: Best ways to get free money with little or no effort

With the invest-to-homeownership option, the risk of losing your home to a lender in the case of protracted default or loss of income is eliminated. The developer that you choose to work with is obligated to deliver to the terms that will be agreed upon at the point of investment. You should carefully choose a stakeholder who can and will deliver on your homeownership goal in record time.

READ: Bamboo says USD Wire Transfer option is no longer available for deposits

You may be interested or have questions about the possibility of the invest to homeownership option. In addition to letting you know this option is possible and available, we want to answer your questions too. Send ITHO via WhatsApp to 07062028677 or email to [email protected]

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