As Nigeria marks the International Teachers Day, the Nigeria Union of Teachers (NUT) has called on the Edo State Government to take urgent steps to fix the problems facing the education sub-sector. The State Chairman of the NUT, Mr. Pius Okhueleigbe made a call on Thursday and explained that while current efforts by Governor Godwin […]
FCT authorities will from next week begin the demolition of structures that violate building plans or fail integrity test. This is part of measures to mitigate building collapse in the Federal Capital Territory, an official said. The exercise will be carried out by The Department of Development Control of the Abuja Metropolitan Management Council (AMMC). […]
LAFIA – The Federal Mortgage Bank on Wednesday started the construction of 100 Housing units in Nasarawa State as part of effort to alleviate the plight of Federal Government workers in the country. Delivery a speech during the flag-off ceremony at Kwamdere in Lafia Local Government Area of the state, the managing director/chief executive officer […]
One of the most important ways of laying claim to ownership of a property is by being in possession of the relevant land title documents which are recognized by various government statues and laws. I wrote this article to help you identify which specific land title you are required to have and how you can […]
If you follow my blog, you know that I’m a real estate investor so I’m a much bigger fan of real estate investing than stock market investing (though I do both – full disclosure). I didn’t get into stocks, however, until I’d made enough money with real estate to invest some of those profits.
Now that you know, without a doubt, where my loyalties lie, let’s get on with it.
Real estate or stocks? Points to consider:
1. Leverage – In real estate you can spread out your capital; you can use a small amount of money to buy an expensive piece of property and banks will loan you the rest. Fabulous.
With real estate, you can put down 10 percent of the purchase price and have a bank finance the rest. Do this one time, great, do it often and the advantage of leverage is compounded. For example, with $100,000 you can purchase ten $100,000 houses putting down only 10 percent on each and banks will finance the other 90 percent. You have then acquired 1 million dollars worth of real estate. You have mortgages on those properties, yes, but put in a tenant and they pay those mortgages down over time for you. You also get tax write-offs on the mortgage interest as well as write-offs for the property depreciation annually.
With stocks, however, if you have $100,000, you can buy $100,000 worth of stocks. Period. You cannot say to your stock broker, “I want to buy $100,000 worth of stock. I want to put $10,000 down and have you finance the rest.” $100,000 buys $100,000 worth of stock where, in the first example, we were able to use that $100,000 to buy 1 million dollars worth of real estate.
The advantage of leverage in real estate cannot be overstated. It is one of the greatest benefits we have as real estate investors.
2. Discount – Real estate can be purchased well below retail value. Investors regularly buy properties at significant discount, fix them up, and resell them all within a matter of months and for a large profit. Or, you can purchase at significant discount, hold the property as a rental, and either keep the equity in your asset or borrow it back out to purchase additional assets.
The price you pay for stock is 100 percent of the retail price that it sells for the day you purchase, whereas in real estate, you can buy something that is currently valued at $100,000 in it’s existing condition and pay as little as $60,000 for it.
3. Income – With real estate, assuming you buy right, the more properties you own the greater your income. Once you have equity, you can refinance to get the money out of the property and still have the performing asset. Or, you can get a home equity loan giving you cash to spend while your asset remains in place giving you tax benefits, providing rental income, and realizing equity growth over time.
To receive income from stock investments, however, you must sell the stock and when you do, you have fewer performing assets creating a return. Once you reduce your stock holdings, fewer performing assets provide lower financial return.
4. Control – If you own a stock, you can’t vote on how the company is run. Chances are, you know very little about the company or those in charge of it. If they make profit, you win. If they don’t you lose. With stock, you can pray that the people in charge make the right decisions.
With real estate, you control the asset, the decisions are yours. There are plenty of things you can do that directly influence the value: paint, add a room, landscape, update/upgrade, a whole variety of options. It’s totally different when you are at the helm of your own investment.
5. Exit Strategies – The final advantage on my list is that there are so many ways to make your real estate investment perform. You can wholesale, rehab, hold rentals, own mobile homes, get into commercial real estate, build new construction, on and on. With stocks, you buy and wait, completely at the mercy of the market as to what the value is. I’m not good at waiting…
In Summary – In addition to market appreciation (increase in value over time), you have forced appreciation (your upgrades), tax advantages, leverage advantages, and the fact that you can buy real estate at extreme discounts – almost none of which you can do with stocks. And once you buy real estate, you have practically unlimited options as to what you can do with it.
Buy real estate!
Do you agree?
Please find below links to recent news about some aspects of disaster resilience… Recent emergencies/disaster Three people missing as cyclone brings flash floods in Greece https://uk.reuters.com/article/us-greece-weather-medicane/three-people-missing-as-cyclone-brings-flash-floods-in-greece-idUKKCN1M90RN A 7.4 magnitude earthquake struck Central Sulawesi on Friday, 28 September at 17.02 (Western Indonesia time). The quake subsequently caused a tsunami that hit coastal areas in Palu City […]
Planning to buy a home? Here are some things to be aware of:
1. Lender: Step one – meet with a lender FIRST to find out if you qualify to buy and how much you can afford.
2. Income: Spending no more than one fourth of your income for your home is best. That way you can afford other expenses and, hopefully, keep your home if one partner loses their job.
3. Plan ahead: Make a wish list. Start with what would you love in your home, then narrow down to what you must have. For example, a fireplace is an absolute must have for me. I don’t bother looking at homes without one because I would not be happy living without a fireplace. Minor? Maybe, but not to me.
4. Location: Do you need to be close to work, to schools, to restaurants, to movie theaters? What’s important to your lifestyle? A little extra driving to work may seem like only a minor inconvenience when you find a home you love further out than you’d planned. But, after six months of driving that extra 25 minutes each way, you may not be thrilled with the idea of living in that location for the next 5-10 years. And, what’s it like to get home at rush hour?
5. Schools: I’ve had people say, “oh, we don’t care about the schools, we don’t have children.” Well, you may someday. And, even if they’re grown and gone, good school districts are a huge influence on how quickly you’ll be able to sell your home later.
6. Sunlight: Drive by the house you’re considering at different times of the day. Where does the sun shine into the windows at different times? Do you want plants to bloom in your family room? If so, the room better get plenty of light! Sunlight also impacts things like moss and mold growth.
7. Noise: If the neighborhood is quiet at 10am when you view it with your realtor, is it still quiet at 4pm when the kids are all home from school? What is it like in the evenings?
8. Closing Costs: Get good information about all of your closing costs to avoid surprises at the closing table. Surprises at closing are, unfortunately, not uncommon.
9. Move-in/Ownership Costs: Remember move-in costs like window treatments, carpets, shower curtains. Do you need to immediately buy a refrigerator? And don’t forget additional monthly expenses that may not show up on your buying estimates like: taxes, homeowners dues, mortgage insurance, homeowners insurance, utilities, maintenance, etc.
10. Repairs: Nine times out of 10, there will be repair costs. No home is perfect. Doors may not shut (or stay open), faucets may drip, toilets may run. Expect to find a number of fairly minor annoyances that you will want to fix when you begin living in your new home.
Buying a home is an exciting time. It can also be stressful! Hopefully, these tips will help you avoid some of the stress.
What can you add? What did you learn?
The Capital city of Abuja was shaken recently by a series of huge earth tremors that had the hearts of most residents in their mouths. Such was the impact of this earth tremor on September 5th, 2018 that it left a couple of roads and buildings damaged in its wake. The serious ground vibrations was […]
Apparently determined to make government infrastructure live out their lifespan, the Federal Housing Authority, (FHA) has finalized plans set up a facility management agency that will be charged with the maintenance of roads and other social infrastructure in federal housing estates nationwide. Speaking with a news agency, the Managing Director of FHA, Prof. Mohammed Al-Amin, […]
The controversy dogging the imposition of exorbitant service charges in various estates in the country is set to boil over, with bitter quarrels between the property owners or managers and the occupiers.nIn rare cases, the trouble has been between residents and associations executives.
Service charge is a mandatory payment made by tenants toward the cost of maintenance and repairs of common facilities, beyond those being personally used by individual residents’ in their apartments.
According to the Royal Institution of Chartered Surveyors’ (RICS) Code of Practice document, the service charge enables owners of estates to recover the costs of operating a property from the occupiers as well as any other persons who benefit from and use the services/facilities provided.
The fees, also covers; car park or shared driveway, reception areas, corridors, lifts, grass cutting/gardening, general repairs and maintenance, Close Circuit Television (CCTV) equipment and block insurance among other things.
The most worrisome aspect of the issue is the astronomical increases and lack of fixed charges for such services, which often result to regular cause of disagreement between landlords and tenants.
For instance, in 1004 Estate in Lagos, tripartite quarrel has brewed between the former facility managers and the residents. Subsequently, the matter shifted between the occupiers and the association.
All have bothered on service charges. In most major cities, the story is the same.
In highbrow locations like Lagos, Abuja, Kaduna and Port Harcourt where such structures are rented, some tenants pay rent and service charges upfront like three to five years in advance for easy management of their services.
The prices are subject to review, in which case they may go up/down.
Investigations showed that service charges differ from one estate to another depending on specific services provided at each location as well as the value of the estate.
In ‘Banana Island estate’, Ikoyi, Lagos which is one of the country’s most expensive neigbhourhood where dwellers are provided with world-class utilities including underground electrical systems (versus the overhead cabling common throughout Lagos), an underground water supply network, a central sewage system and treatment plant, and street lighting and satellite telecommunications networks, service charges are quite expensive.
It ranges between N3.5 million, N2.5million, N2million and N1.5million and could be above.
While in ‘1004 estate’, Victoria Island the rate for service charges is put at about N658, 000 yearly (about N52, 000 monthly) in 2015.
The rate rose from the initial take off N450, 000 when the estate was partially occupied in 2011 down to N350, 000 in 2012, further down to N250, 000 in 2013 and incredibly down to N180, 000 in 2014.
Furthermore, in ‘Osborne foreshore estate’, service charge fee covers; security, environmental services and waste management and the charge starts from N500, 000 and above and could also be lesser.
Experts say, the way out is to enforce efficiency in procurement as well as transparency in order to bring down the cost for the benefit of tenants.
Speaking on the development, an estate surveyor and valuer, Olugbenga Ismail explained that discrepancies exist in service charges in estates because of three reasons, which are; the services provided, the level of energy consumption especially with respect to diesel and the size of the estate.
He said, “Service charges may depend on how each estate consumes energy.
If you have an estate that starts from 12 to 400units like 1004 estate, which is probably the biggest estate in Lagos, their service charges should be comparatively low in compared with others.
But if you have an area with just 12-20units and they have a fixed service like generator, water, cleaning and security, the service charge would be high”.
Ismail stated that the service charges are usually calculated in different ways, which include, per unit cost and service cost plus. Read more https://guardian.ng/property/ripples-over-service-charge-in-estates/
Reform of the mortgage laws is the best way to achieving affordable homes for all Nigerians, the Chairman, Estate Surveyors and Valuers Registration Board of Nigeria, Nweke Umezuruike, has said. Umezuruike, who spoke at the meeting the board and other stakeholders held recently in Lagos, explained that the reform will also enable Nigerians to own […]
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The federal government will have to cough out a huge sum of $363 billion (about N111. 08 trillion) to meet the current housing deficit in the country.
This revelation was made Tuesday by a former Chief Executive Officer of Nigeria Mortgage Refinance Company (NMRC), Prof. Charles Inyangate, at a workshop to mark the World Facilities Management Day in Abuja.
Citing a report by the Centre for African Housing Finance released in October 2015, Inyangate, who delivered the keynote address: ‘Enabling Positive Experiences in an Evolving Economy’, said that amount is required to fix the country’s housing deficit, which ranges between 17-23 million units.
The current housing stock in Nigeria is estimated at 21 million units while the estimated demand is between 38 million and 44 million units.
He said a crisis is looming given the prevailing housing deficit, in view of Nigeria’s demography, which is considered the fastest growing in the world.
He added that over the next 30 years, according to a report by the National Integrated Infrastructure Masterplan (NIMP), $95 billion private sector funding will be required to develop Nigeria’s infrastructure towards the provision of paved roads and electricity.
Inyangate tasked facilities managers to intensify their approach in facility management, saying it is the only means to achieve sustainable and effective development of Nigerian cities.
“Facilities managers are expected to be value creators within their respective organisations. They have a role to play in the building and redesigning process. If government can’t do alone, there is an urgent need for a proactive Public Private Partnership to address Nigeria’s economic challenges. The competence skill set needed to function in Facilities Management are multi-dimensional, it is appropriate that all facilities managers ensure they are well equipped with the competencies,” he said.
At the workshop, Senator Ahmad Abubakar (Bauchi South) revealed that there was a Facility Management Bill before the National Assembly.
He said the bill when passed will enhance and ensure legal framework, localisation of processes and practices of facility management in the country.
He said the Bill had already passed the second reading and public hearing stages.
The Federal Mortgage Bank of Nigeria (FMBN) said it has refunded over N21.4 billion National Housing Fund (NHF) to 216,650 retirees across the country. The Managing Director, Arc. Ahmed Musa Dangiwa disclosed this yesterday in Abuja at the September 2018 Lunch Time Reform Seminar on “The Challenges Facing Civil Servants in Obtaining Loan from FMBN […]
The president of ARCON, Mr. Dipo Ajayi, while reacting on the collapsed building in Abuja, said the incidence and others in the past showed that developers and various institutions hired unregistered persons posing as architects/consultants, or foreigners, to carry out projects in Nigeria, thereby subjecting the unsuspecting public to great risk that ultimately results in loss of lives and property.
Ajayi said to mitigate incidences like that, the council has set up the ARCON Projects Registration Number (APRN) system which is a mandatory registration number to be issued to all architects practicing in Nigeria, for each of their projects, to certify that they are designed, handled and executed by Nigerian citizens fully registered to practice in Nigeria. … Read more https://www.dailytrust.com.ng/architects-council-begins-issuance-of-number-to-members-to-combat-quackery.html
To eliminate quackery in architectural practice, Architects Registration Council Of Nigeria (ARCON) has announced plans to set up an enforcement and compliance unit, which will ensure that only registered members handle architectural projects in the country.
The council in a statement said that the measures would be in consonance with the extant laws and complement the content and spirit of the National building codes.
According to ARCON President, Sir Dipo Ajayi, the unit will ensure that only professionals with the requisite knowledge and expertise of the building process are engaged to carry out building projects and are duly governed by the various Acts in the statute books.
“The Council is working in concert with other interest groups to get the built environment properly policed to avoid or reduce to the barest minimum the issue of building collapse and its attendant effect on the developer and the national psyche,” he said… via guardian.Read more
The summit’s aim Creating a platform for African and global real estate data and transparency experts to share insights, best practice and solidify global and regional investor confidence in Africa’s high growth economies are some of the primary objectives of the 9th annual API Summit & Expo taking place in Johannesburg on 20 and 21…
There is need to overhaul the nation’s building regulations The recent building collapse in Abuja which claimed no fewer than two lives with several others injured should spur the authorities into looking into how we can avert this recurring tragedy in our country. While we commiserate with the families of victims, we reiterate […]
Against the backdrop of the recent floods in the country, Chiemelie Ezeobi writes on measures for the safety of life and property When it rains, it pours is a popular idiomatic expression denoting the multiple occurrence of good or bad. But it also seems to express the chain reaction of misfortunes that follow on quickly […]
Though Egyptians have lived in and around the Cairo area since time began, the modern city itself is ually traced to the year 968 AD and the newly arrived Fatimid dynasty. For centuries the city prospered and grew to become the largest city in Africa and one of the largest in the world. Later French […]
Construction and financial experts have expressed concerns over poor contribution of the construction sector to the economy despite its potential with respect to employment generation. The assessment of the sector, vis-a-vis it’s potentiality in boosting employment opportunity was regarded to be very poor, particularly in the first half of 2018, compared with the preceeding years. […]
Institute of Building (NIOB) has called on Nigerians to reject any affordable housing … aid the growth of the sector; Practical implementation of the Family Homes Fund .
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Chaos in the early hours of Wednesday following the collapse of the major Taraba bridge at Peva, which linked Wukari and Takum towns in the state. Takum is the hometown of a former Minister of Defence and Former Chief of Army Staff, Gen. Theophilus Danjuma. An eyewitness, Mr. Torsaa Chieve said the collapse of the […]
Real estate Operators under the aegis of Africa Real Estate Society (AFRES) have hailed the contributions of Chairman of Dangote Cement Plc Aliko Dangote in lessening the burden of unemployment through his contributions to the real estate sector of the African economy. They called on African leaders to encourage him to do more by obliging […]
Stakeholders at a seminar organised by the Ogun State chapter of the Nigerian Institute of Quantity Surveyors have chided the federal and state governments for constructing housing units only for the rich. The seminar held in Abeokuta and had as its theme: ‘Effective housing delivery in a developing economy.’ The President, NIQS, Obafemi Onashile, noted […]
Property fraud – The Federal Government has uncovered 114 companies neck deep in shady land deals, even as it raked in N1.173 billion in tax revenues from January till date. The Executive Chairman, Federal Inland Revenue Services (FIRS), Tunde Fowler, made the disclosures in Abuja at the African Union high-level panel on illicit financial flows […]
The Federal Government on Thursday flagged off N1.7billion erosion control work on Nduetong Oku-Ikpa road, cutting across Uruan and Uyo Local Government Areas of Akwa Ibom. Senator Ita Enang, Senior Special Assistant to President Muhammadu Buhari on National Assembly Matters (Senate), did the flagging off ceremony. He said that the project would alleviate the suffering […]
Spaces for Change, a non-governmental organisation, in partnership with the Lagos State Resilience Office, is leading an initiative to address poverty among slum dwellers in the state. The organisation, also known as S4C, recently led a focus group discussion on empowering slum dwellers to quit poverty and live a better life, noting that this would […]