Investment Property in Lagos

Investment Real Estate in Lagos

Lagos property investment can be a worthwhile venture if you are selective with the areas you choose to invest in. If not, you could find that your investment suffers due to low rental yields, dwindling demand, and slow property price growth in many parts of Lagos .

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Search Map of Lagos Investment Real Estate

Lagos (Nigerian English: ; Yoruba: Èkó) is the most populous city in Nigeria and the African continent, having a population of 14.8 million as of 2021 within the city proper. The Lagos metropolitan area has a total population of 21.3 million, making it the largest metropolitan area in Africa. Lagos is a major African financial centre and is the economic hub of Lagos State and Nigeria at large. The megacity has the fourth-highest GDP in Africa and houses one of the largest and busiest seaports on the continent. It is one of the fastest growing cities in the world.

Lagos initially emerged as a home to the Awori subgroup of the Yoruba of West Africa and later emerged as a port city that originated on a collection of islands, which are contained in the present day Local Government Areas (LGAs) of Lagos Island, Eti-Osa, Amuwo-Odofin and Apapa. The islands are separated by creeks, fringing the southwest mouth of Lagos Lagoon, while being protected from the Atlantic Ocean by barrier islands and long sand spits such as Bar Beach, which stretch up to 100 km (62 mi) east and west of the mouth. Due to rapid urbanization, the city expanded to the west of the lagoon to include areas in the present day Lagos Mainland, Ajeromi-Ifelodun and Surulere. This led to the classification of Lagos into two main areas: the Island, which was the initial city of Lagos, before it expanded into the area known as the Mainland. This city area was governed directly by the Federal Government through the Lagos City Council, until the creation of Lagos State in 1967, which led to the splitting of Lagos city into the present day seven Local Government Areas (LGAs), and an addition of other towns (which now make up 13 LGAs) from the then Western Region to form the state.

Lagos, the capital of Nigeria since its amalgamation in 1914, went on to become the capital of Lagos State after its creation. However, the state capital was later moved to Ikeja in 1976, and the federal capital moved to Abuja in 1991. Even though Lagos is still widely referred to as a city, the present-day Lagos, also known as “Metropolitan Lagos”, and officially as “Lagos Metropolitan Area” is an urban agglomeration or conurbation, consisting of 16 LGAs including Ikeja, the state capital of Lagos State. This conurbation makes up 37% of Lagos State total land area, but houses about 85% of the state’s total population.

The exact population of Metropolitan Lagos is disputed. In the 2006 federal census data, the conurbation had a population of about 8 million people. However, the figure was disputed by the Lagos State Government, which later released its own population data, putting the population of Lagos Metropolitan Area at approximately 16 million.^{[note 1]}. As of 2015, unofficial figures put the population of “Greater Metropolitan Lagos”, which includes Lagos and its surrounding metro area, extending as far as into Ogun State, at approximately 21 million.

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The financial stability of Lagos has translated into a real estate market that rewards forward planning and a willingness to look beyond areas of traditional affluence.

Buy to Rent in Lagos

Renting out your Lagos buy-to-rent investment property can grow wealth and income.

Whatever your goals with investment property in Lagos are – preparation is key.

Set goals based on how much rental yield will be required and the local rental yield rates in Lagos and be prepared to change your initial outlook.
Thoroughly research the Lagos location with a special emphasis on fringe areas outside the main Lagos metropolis that may be valued lower than their better-known neighbors. Rental yields of around 5% are still attainable in certain areas of Lagos.
Ensure that your target investment property in Lagos appeals to professionals. This is a demographic that ensures maximum income and low voids.
Finding and vetting suitable tenants is a job ideally left to the professionals. Working with an established letting agent such as Physis Realty with local knowledge and experience of property legislation will give you the best chance of success.
You may think that managing your Lagos properties yourself is an easy option, but are these savings justifiable when you run into Lagos red tape? Physis Realty Lagos office in downtown provides you with peace-of-mind and leaves you time to plan your next move in the growing Lagos buy-to-rent sector.

With our expert guidance, investing in Lagos provides the secure knowledge that your money is working harder than it would in a local Lagos bank and that future generations of your family will be left with substantial capital growth assets.

We are always happy to advise on buying investment property in Lagos, where we have been established for over 35+ years. Physis Realty has been a firm fixture in the Lagos property market through good times and bad. Our experts have seen it all and our portfolios continue to outperform.

Flipping Investment Property in Lagos

Flipping property in Lagos

Flipping property is when we advise clients to buy a Lagos property below market value, renovate it and then make a profit by selling it at a higher price, all within a few months, and often before the Lagos market has a time to react to the renovation.

The Flipping Strategy in Lagos

Investment property flipping in Lagos is a simple strategy. You find a property that is in need of renovation from our list and purchase it for a low price. These type of Lagos real estate investments are sometimes referred to by professionals as ‘distressed’ Lagos real estate.

What is distressed Lagos property:

Lagos property in need of renovation
Lagos real estate with a change of purpose and use
Oversold Lagos property
Bank repossessions in Lagos

Put simply, long term investors in Lagos purchase the property, renovate it and make it a lot more attractive to potential buyers.

Calculate profit that you make from Lagos investment property flipping:

Final Selling Price less Cost of Purchase less Costs = Profit

Here is an example:

Lagos property purchase price: $220,000

Renovation costs: $20,000

Other costs: $25,000

Property sale price: $400,000

Profit: $135,000

Experienced property developers in Lagos use a minimum profit value of 22% when looking at potential Lagos projects. The reason for this is because there are lots that can go wrong in Lagos property flipping and working on a potential margin of 22% should still leave a good margin of error.

Luxury Property in Lagos

For luxury property investors hoping to add a superb property in Lagos to their luxury real estate investment portfolio, Physis Realty is a trusted partner.

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A world leader in luxury real estate with a portfolio comprising some of the most sought-after real estate in Lagos, Physis Realty caters particularly to high net-worth individuals and families. A luxury real estate investment in Lagos should be entrusted to only the highest-quality agency.

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