There are five very important concerns and considerations on the top of the “tick-off list” of a buyer or investor in real estate. I will talk about these in a moment. However, it is important to mention that, like getting married or making bundles of joy, the decision to buy a house is a very emotional one. It is as emotional as it is fairly logical. Often, logic takes a back seat when it comes to the decision to buy a first home. This article will scratch on the surface of both the logical and emotional sides of the decision to buy or invest in real estate.
Emotional Reasons Why Buyers Buy or Invest in Real Estate
There are a lot of emotional reasons why buyers buy or invest in real estate. I will talk about just a few of them and they include:
- Rental Fatigue/Peace of Mind
Paying rent is easy until it becomes tiring and frustrating especially when your cash flow becomes unstable or unpredictable. Cash flow to pay rent may cease or become harder to come by without any sort of warning. Loss of job, business failings, death of a bread winner, ill-health, serious injury as a result of accidents and a multitude of other factors may cause an otherwise steady rental cash flow to suffer a serious jeopardy. There is a certain peace of mind that comes with not having to worry about the next incoming due rent. The mind is at peace to focus on more important things when you own and live in your own house. This can contribute directly to longevity and good health.
- Personal or Family Space/Private Shelter
Another reason to buy a house is space. As the number of family members increase, a single or double room apartment may not be adequate. More space and rooms are needed. A very direct ancillary reason for owning a house is privacy and satisfaction within one’s own personal, private and exclusive space. This is a major factor for buying a house.
- Aspiration for a Lifestyle
There is more “swag” in the statement “I live in MY OWN house”. In addition to wanting your house to be finished in a particular way and to have a very specific personal touch, style, and ambience, you also want to live or be associated with a particular lifestyle in a particular location.
This factor is the reason why retirees or elderly couples would prefer to move out of their big spacious mansions or houses after the children have left, and the “nest” is empty, to a smaller fully serviced apartment where they do not have to do anything to provide essentials like power, water, security, waste disposal and sometimes concierge services. The ease and convenience that comes with this lifestyle is another reason to buy and own a suitable house.
- Custom and Culture
It is traditional or customary in some parts of Africa, and in Nigeria, the South West and the South East to view owning a house as a sign of having “arrived”. Owning a property is considered to be one, if not, the highest indication of achievement and success.
- Social Proof and Keeping Up with Friends and Colleagues
When friends and colleagues are landlord of their own houses, it is natural to want to own a house too. It is not necessarily a negative reason to want to own a house because a good friend or colleague owns one. This factor influences a friend in the midst of house owning friends to own a house too.
There are two reasons to buy a house as investment. These are value appreciation and rental income. Houses tend to appreciate in value as time passes. While appreciating in value over time, a house can also generate good rental income if the owner does not live in the house. Purchases made for investment reason is very rampant.
The Four Most Important Factors to Consider When Buying a House
Once you have made up your mind to buy a house, you should always tick of these four reasons before you sign the dotted line of a contract of sale, and they are:
One of the most important factors is the location of the property. If it is for residential use or investment, is the location serene? Is the location premium? What is the value of properties in the location? Is the location secure? What kind of persons live in the location of the property?
Is the value of property you are about to buy in the same range with similar properties of the same age, design, finishing, ambience and location? Are you getting a good deal for your money? Will the price likely appreciate? Is there a payment plan? Is the payment convenient for you? Can you stretch your budget to meet payment timelines?
It is better to buy a well-designed, structurally sturdy and trendy house with lots of spaces in a serene ambient location, as value would appreciate better over time than a house without these features.
A house should also have a good title. A good title is one without any encumbrance and which can serve as a proof of ownership recognized by the law. For more information on what qualifies as a good title, you may want to check this out.
How to Get the Best Deal for New-Build Properties
The deal and pricing available for a new-build property is dependent on the stage at which the deal is struck. There are different stages for the pricing of a new-build. They are:
1. Off-Plan/Pre-Construction Stage
At this stage, the property has been designed and approval is in process. Construction has not started. This is the time to get the best deal on a new-build. The best deal at this stage is of three dimensions. The pricing is pocket friendly, the initial payment required is low and duration for making payment is long. At this stage, the property is affordable. The discount on the price may be as high as 30%. In some cases, you may even get a deal with a higher discount on the purchase price.
Why this is the best stage to get the best deal is because a new-build that a buyer would otherwise have been unable to afford is at this stage within the buyer’s budget. Compared to a ready property of the same or a lesser design, the new-build at this stage is cheaper. Also the new build is affordable in two ways, namely, after the initial deposit, you can pay in small instalments for a very long period of time. This means that a buyer has the advantages of a good deal on the pricing and a long time to pay off the purchase price. Of course, the tradeoff is that he has to wait for the property to be built. This tradeoff is better than seeing a ready and fully built property which he cannot afford because of the price. In an environment where the terms for accessing a mortgage to finance a property present a herculean task, this is the best alternative and it is often interest free. Mortgage interest at current interest rates is a minimum of 9% per annum and this is if you have access to the mortgage provided by the Federal Mortgage Bank. Commercial bank rates are as high as 20% or even higher and this interest rate is paid on the full price of the property purchased with mortgage financing.
At off-plan/preconstruction stage, the price and the duration for payment of the purchase price of the new-build are not stagnant. There are small increments in price and reduction in payment duration from time to time as construction approaches.
A buyer who buys at the earliest stage of the off-plan/preconstruction stage gets the best deal ever!
2. Construction Stage:
Construction begins when the foundation is set out and laid. Construction continues until the new-build is finished and keys handed over to buyer. As soon as construction begins and continues to progress, the price will usually go slightly higher and the duration for payment becomes shorter. This will keep happening intermittently as construction progresses. The objective is to get as close as possible to the market price as construction progresses. The price flexibility is not as high as off-plan/preconstruction stage and the duration for making payment is shorter.
A buyer may still get a discount as high as 10% or slightly more on the final purchase price. The duration for making full payment will be reduced and initial deposit and instalment payments will be higher.
A buyer can still get a good deal at this stage, but it will not be as good as the deal he can get at the off-plan/preconstruction stage.
3. Post Construction
At this stage, the construction is completed and the units are the level often described as “pay and pack in”. There is barely any flexibility here. The new-build is selling at its market price and the payment term is usually outright or within a very short period of time.
For a buyer who has a low or limited budget, this is not the best time to buy and the deal is not the very best he can get. However, the tradeoff for paying market rate for a post construction new-build is that you are paying for a fully ready property and you can start living in it as soon as you make the outright payment for it.
Why Buy Olagbaju’s Court?
Olagbaju’s Court (view intro here) is a brand new premium, urbane and luxuriously finished blocks of 3 bedroom flats with penthouses.
It is located within the serene, peaceful, gated and well secured AFRA Estate on Adeniyi Jones Avenue in Ikeja, Lagos, Nigeria.
Adeniyi Jones Avenue is a renowned and classy choice area on Lagos Mainland (see more information on Adeniyi Jones here). It is a perfect blend of both commercial and residential developments. The residential part is serene, green, peaceful and home to gated and secured mini estates. It is centrally located and is less than 20 minutes’ drive to the international airport. It is less than 15 minutes’ drive to Ikeja City Mall. Other nearby places of interest are fitness centers, cinemas, shopping malls, family parks, intercontinental and local restaurants and eateries, renowned nursery, primary and secondary schools.
Olagbaju’s Court does not have any unit on the ground floor. The first residential floor is the first floor.
Each luxurious 3 bedroom flat in Olagbaju’s Court is finished with the following features:
- Spacious Living Room with terrace.
- Spacious bedrooms with premium quality multipurpose closets and wardrobes.
- Spacious Master’s bedroom with private terrace
- All rooms ensuite with cubicle shower, water heater, top quality sanitary wares
- Self-Contained Maids Quarter/BQ for each flat
- Guest Toilet with top quality sanitary wares.
- Large Fitted Kitchen with spacious and well delineated cabinets, heat extractor, gas cooker, microwave oven, water heater.
- Elevator to all flats
- Escape stairwell
- 2 Car parking spaces per flat.
- Fitted Gymnasium
- Facility Management Office
- Security Office.
- To be Fully Serviced (24/7 Power; Water; Security, Waste Disposal).
- Intercom connection from all flats to the security office and from all flats to each BQs.
- CCTV coverage.
- Automated Entrance and Exit Gate
Olagbaju’s Court was designed by a renowned and certified architect and its structural design was done and reviewed by a team of very experienced and certified COREN registered Structural Engineers who also constitute and are part of the construction team. Its Electrical and Mechanical design was done and reviewed by a team of very experienced and certified Mechanical and Electrical Engineers who are part of the construction team. Its approval for construction, currently in the pipeline with the Lagos State Government, is for the entirety of the ground plus 5 Floors. Its entire structural, mechanical and electrical designs were thoroughly and exhaustively reviewed and its approval is in its final stages.
Olagbaju’s Court is currently at off-plan/preconstruction stage.
Price Dynamics and The Best Time to Buy Olagbaju’s Court
Each flat in Olagbaju’s Court will sell for a minimum of N69.999m when completed. It may be higher. Also, the higher floor flats will sell for a higher price.
Olagbaju’s Court started off with a promotion price of N45m for the first two units with an initial deposit requirement of N10m and payment duration of 24 months. It is currently at N49.999m with an initial deposit requirement of N15m with payment duration of 12 months. It will soon proceed to a price of N54.999m but still with an initial deposit of N15m and payment duration of 12 months.
Once construction commences soonest, it will proceed to N59.999m with an initial deposit of N20m and payment duration of 12 months. The price and the initial deposit will however keep increasing and the duration for payment will keep reducing as construction progresses until completion and full delivery, when it will hit the open market price for a similarly luxurious and uniquely built 3 bedroom flat plus a room BQ at a minimum of N69.999m and higher.
For early buyers, we shall begin to deliver keys from the 31st of December 2021 in approximately 12 months from now.
The best time to buy Olagbaju’s Court is NOW!