DEVELOPER’S DELIGHT:
PRACTICAL GUIDES TO GETTING STARTED AS A SMALL/MEDIUM SCALE LAGOS PROPERTY DEVELOPER: ENTRY LEVEL SKILLS FOR DEVELOPERS
Understand the Market
The first thing to do is to determine which part of the Lagos property market you want to focus on. The influx of potential homeowners into less developed and upcoming areas have continued to create investment opportunities for budding small and medium scale property developers. On the mainland, areas like Ikorodu, Lagos-ogun axis which encompasses Isheri North, Arepo, Magboro, Ibafo, Moweofada, Shimawa and Agbara-igbesa currently have a high rate of property development activities because of the availability of affordable expanse of developable plots of land; same for areas like Sangotedo, Abijo, Lakowe and the entire Ibejulekki axis on the Island. In middle end of the market, areas like Magodo Isheri, Mende Maryland, Ogba, Yaba, Ebute Metta and Surulere on the Mainland has the highest number of ongoing developments targeted at middle level income earners; the same for areas like Ikate Elegushi, Agungi, Ikota, and Ajah on the Island. Understanding the market also requires knowing the traditional land owning practices in these areas, price of plots, available title documents and physical planning regulations as well as the major building materials markets and suppliers in the area. It is also important to know what people are buying in these areas and at what price.
Where to Build
It is vital to know that each of the different markets have their own unique features and characteristics. For example, land prices and topography of areas may vary and go a long way in determining what it will cost to build a property there. Despite the relatively low financial status of your target clients,
you must ensure that the area you decided to situate your development must be very accessible and have basic public utilities. You may also decide to start building in an area you are somewhat familiar with. For example, if you have lived all your life on the Mainland, it may just be reasonable to start from there before trying the Island.
What to Build
At this level of the market, what is clearly in high demand are small unit apartment blocks that comes in flats, townhouses and terraces. It is important to note that each of these types of developments have their own peculiar advantages and challenges. Whichever type of properties you decide to build, do not try to overdo anything especially in terms of aesthetics and finishings. You must understand that no matter what you do, the price matters a lot to this class of buyers. It is recommended that unit prices should be not exceed N20m for the budget end of the market and N45m for the middle level income earners.
Getting Finance
Some of the easiest ways of raising funds at this point includes going into a Joint Venture with a landowner or another developer, pooling together funds from friends, business associates or relations. The other option is getting a loan from a bank. However, for a start, it is always advisable and safer to stay with the first two options.
Selling the Property
The best option at this stage is to attempt to get buyers for the property before it completed (off plan sales). Strategies like Installment Payment Plan for buyers have been very effective. Getting relevant information across to potential buyers of your developments would also require you spending some money on advertisement. Regular advert placement in a medium like Castles Lifestyle Magazine have been very helpful to a lot of small/ medium scale developers. To also facilitate sales, you may have to partner with Primary Mortgage Institutions to help in providing long term financing for buyers.