A State Of Real Estate
Yesterday was an eventful for me because I followed my girlfriend house hunting, before I start I will like to let you know that I am a Nigerian that lives in Nigeria, this means that I stay in a location where the economy is highly unstable. This means that a lot of people make investments in Nigeria and regret afterwards after they do their calculations. Before you start invest in Nigeria it is highly important you know that Nigeria is an importing country, this means that Nigeria imports most of its goods and services. When it involves the price of gods and services, Nigeria is not organised enough to regulate prices. This hugely affects the cost of living which also affects the value of its currency which is the Naira. Because, most businesses depend on importation of products which involves trading in dollars or any foreign currencies to pay.
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Lets go to the real estate sector, real estate is an asset that is fixed in a location that can’t be moved around, being a fixed asset, it has its advantages and disadvantages, the advantage involves rental income, fixed asset that cant be moved, and a good medium to store your asset. But the disadvantage of having a real estate in an unstable country like Nigeria is, money spent towards maintenance, then when placed on rental income, it will have to take you 10 years to make back your capital, while you are waiting to make your capital in 10 years, inflation is devaluing your house.
Nigeria is a country where housing style is based on trend, after some few years, certain housing style will go out of style, and will be valued less compared to the latest contemporary style. Most time they will be bought because of the land, the building will be brought down. In terms of increase in Naira quantity your house would be bought higher most times, but in terms of value compared to the foreign exchange, the value of your money will be lower compared to the value it was when you initially bought the property. For instance if you spent $30k buying a house 10 years ago, if you sell the house today will be worth $20k. In Naira quantity the amount has doubled, but in terms of foreign exchange value, it has reduced. This is what you get when you invest in real estate.
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Investing in Nigerian real estate can be challenging due to inflation and currency devaluation. While properties may increase in local currency, their value in foreign currency may drop over time. For more stable options, consider looking at property for sale Denmark https://mlsworldwide.com/en/sale-denmark for long-term value retention.