Often associated with high prices, and for good reason, a home in Abuja is about the most lucrative investment for anyone looking for good ROI in a fast-growing city. Home to many high profile individuals such as top-class government officials and high-class expatriates, the Abuja market continues to leverage on the rising demand for luxury properties. Some of the high grossing areas in Abuja include Maitama, Wuse 2, Asokoro, and Garki. For instance, if you’re considering buying-to-rent, you may be looking at an average impressive annual yield of 8%; that is about 3 million Naira ($7800) annual rental income on a 3 bedroom home in a location like Maitama or Wuse 2!
Although it is a highly promising venture, owning a piece of real estate in Nigeria’s booming capital may not be as straightforward as it might seem. The trick, however, is to carefully plan ahead and prepare yourself for this huge investment. Because once a commitment has been made, it is extremely difficult to renege on. A story of Mr. Stanley easily comes to mind in this scenario. In early 2017, he had returned to Nigeria ready to invest in a detached property located in Abuja. According to his calculations, he could break even in 10 years. Unfortunately for Mr. Stanley, 2 years later, it turned out that the realtor had swindled him of millions of dollars, alongside some other unsuspecting investors. The property had been sold to more than one person, and now it’s a never-ending court case.
Regardless of your reason for purchasing a home, the basic rules remain constant when purchasing your first Abuja home. And after careful research, we have compiled this ultimate list to help you in buying your first home in Abuja and avoid making rookie mistakes.
1. Set realistic expectations:
It might be tempting to want the best of everything, but it usually comes at a price that could sometimes overshoot your budget. For instance, you might desire a 4-bedroom detached home that has a pool, a garden, a maid’s quarter, and in a great neighborhood like Wuse. This is excellent; but if your budget cannot accommodate all, you might have to prioritize your needs. A few things to consider, include:
- Define your budget and set a maximum & minimum figure. This will help you plan financially
- Prioritize the amenities and spaces in your potential home. And group them into 2; the “must-haves” and the “nice-to-haves”. This will include pool, bathrooms, bedrooms, yard, location, house design, utilities, etc.
- Map out your target areas/location and have realistic expectations for these places
- Assess the neighborhood. If you have kids, how close is the nearest school? How close is the supermarket?
2. Have a detailed budget breakdown:
Many new homeowners are oblivious to the fact that there are countless other expenses associated with owning a home; most of which are recurring. Some of these are estate bills, electricity bills, sanitation bills, service charges, etc.
As pertains to furnishing and finishing, a smart move is setting aside at least 5% of your home cost for these. Having a very detailed budget will help you articulate whether or not you need a mortgage, and at what interest rate and tenor. Finally, there are often other hidden charges such as infrastructure fees, property taxes, insurance fees, and closing fees.
3. Ask all the right questions:
During property inspection, a checklist of your expectations would help keep you on track. In addition, having a second opinion helps in avoiding ill-informed decisions. Gather as many details as you can on the property (e.g. pictures, videos) to help in your decision. Adequate information can be beneficial during negotiation and striking a great deal.
Important questions to ask include:
- How long has this property been on the market?
- Why is the owner selling?
- Are there any current offers? How much?
- Are any new developments (e.g. malls, supermarkets, schools) springing up in the neighborhood within the next 5 years?
4. Cross-check the legal documents:
To avoid complications similar to Mr. Stanley’s situation, it is necessary to ensure you have all the right documents if you’re going ahead with the deal. Soliciting the services of a professional is very advisable at this stage. A few documents to look out for include:
- Certificate of Occupancy (C of O)
- Governor’s consent
5. Have an exit strategy:
Having an exit strategy is extremely important because it enables you to project the value of your home in a few years when you might need to sell. A few questions to ask include:
- Are there developments in the neighborhood that might appreciate or depreciate the value over time?
- How old is the property?
Now that you have set expectations, the next step is where to start looking. Luckily, the Abuja real estate market is gradually going digitally giving you numerous options for your home-hunt. A few of the high-ranking ones include:
(Please note: These are independent suggestions based on popular usage, and are not endorsements – paid or unpaid.)
In conclusion, buying a home might seem like a huge commitment. But with the right resources and information, you will make an excellent investment. A good rule of thumb is to avoid feeling pressured to make a decision. Usually, realtors might try to persuade new home buyers to make a commitment towards a property because “it is selling out fast”. However, this is often a sales gimmick. Follow this quick guide, and in 10 years you may find yourself smiling all the way to the bank or already sipping on a mojito on a beach resort, pinching yourself, happy you made such an informed move!