Though financial commitment in other forms of actual estate this sort of as residential, business, industrial, and hospitality are also lucrative, land banking goes a stage larger by staying effortless. But there are hazards too, experts say.
Land banking is just one that can be obtained quickly by genuine estate traders – company and particular person and, according to gurus, it is also a great expense vehicle for traders that never have all the dollars for further progress.
Abudulsalam Olayinka Abdulrasaq, an estate surveyor and valuer, notes that in Nigeria these days, actual estate expense businesses and people have embraced land banking as a veritable and successful expense alternative, adding that even in the midst of reducing disposal money of people occasioned by the present economic realities, land banking stays a thriving small business in key Nigerian cities.
As the Nigerian inhabitants carries on to grow on a geometric basis, the demand from customers for housing will carry on to go higher and this is just one of the significant factors that make land banking a most rewarding organization, in particular in a fragile financial state like Nigeria where investments in bonds and other economical belongings are getting eroded by inflation.
Abdulrasaq sees land banking as an investment automobile and plan that requires and encourages expense in an undeveloped landed property at a reduced amount with the purpose of holding unto the land in a presented period and advertising it for a income as the benefit appreciates.
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The estate surveyor and valuer, who is also the director of land & estate products and services at the Railway Residence Administration Business, recommended that to realize success in land banking expenditure, investors ought to be looking out for landed properties that are not designed, specifically in the non-highbrow spots of a metropolis, semi-city towns, and even rural areas with potentials for enhancement.
He, even so, pointed out that, nevertheless this beneficial financial exercise, land banking also arrives with its corresponding issues and danger components, adding, ‘’however, one of the greatest motivators in this line of real estate business enterprise is the empirical simple fact that land appreciates in excess of time irrespective of its place and financial weather of the country.’’
Land grabbing is one of the a lot of variables bedeviling the land banking enterprise in Nigeria. This forceful acquisition of land by a higher authority is a key risk to land banking. In main Nigerian metropolitan areas like Abuja and Lagos, so quite a few minimal-money traders and even identified serious estate corporations have shed their hard-attained investments to the governing administration and big organisations due to evolving guidelines on development command extra time. The incapability of the investors in the land banking genuine estate space to attain the required land documentation from the related federal government authorities is one more element militating versus it.
In the party of progress by the authorities, the land bankers reduce their investment with tiny or no compensation from the government due to an apparent absence of documentation. Other elements affecting land banking company include inconsistency in authorities procedures on land possession and administration, ecological difficulties, local community land ownership challenges, amongst others.
On the way ahead for addressing the myriad of challenges that are confronting the land banking area in the real estate field, good documentation of the land on acquisition is really essential.
And in this regard, the federal government by way of its appropriate businesses and skilled bodies in the created environment must perform in harmony in arresting this obstacle.