19/12/2024
If you save โฆ2 million every month to buy a house of โฆ120 million, it will take you 60 months (5 years) of consistency to raise the money.
By the time you are ready to pay with your โฆ120 million, the value of the property of equal standard would have gone up to AT LEAST โฆ150 million.
Sadly, this is what most people are doing.
They have a long-term savings plan for a project in ways that only depreciate their hard-earned money.
If a well-trained realtor tells them to buy a genuine land (inside bush but in an emerging location) for โฆ2 million, they will say that they prefer saving โฆ200,000 monthly so that they can get one inside the city.
Guess how much the property is?
โฆ50 million for a half plot of land.
By the time they save โฆ200,000 monthly to get up to โฆ50 million, the value of the property they were eyeing would have increased to โฆ70 million.
Before they save up to โฆ70 million again, the price has gone up to โฆ100 million.
If they canโt wait any longer, frustration sets in and they are forced to throw their business capital into purchasing an empty plot of land.
This is not a wise decision at all.
I want to show you what a financially savvy person would do so as to invest in real estate without tampering with their business capital.
Instead of saving โฆ2 million every month for 60 months, use that your โฆ2 million to buy at least one genuine land in an emerging location every month for 5 years (60 months).
In 5 years, you would have acquired 60 plots of land in different locations (cities) and from different reliable real estate companies.
Since real estate is not a fast-liquidating asset, you can give yourself 365 days of consistent marketing to sell off 55 plots of the land and reserve 5 for yourself.
If you sell each plot at an average price of โฆ4 million, (which is impossible because some would have risen to 5X or even 10X) you will have โฆ220,000,000 (โฆ4,000,000 X 55 = โฆ220,000,000).
With this โฆ220,000,000, you can get a property of โฆ200,000,000 in a choice location and still have 5 empty plots of land worth at least โฆ20 million and โฆ20,000,000 raw cash.
All of these you will achieve without touching your business capital.
This is a straightforward way to explain LAND BANKING.
When you beat inflation and poor savings culture through land banking, you can invest the proceed into other fast-appreciating real estate assets that are more capital intensive.
Investing in real estate is not supposed to cripple your business if you approach it with a solid plan and strategy.
Real estate is a good hedge against inflation and a profitable investment plan if you know what you are doing and you are working with the right person.
Donโt do it just because you can afford it, if not, you will either regret it or you wonโt get the best out of it.
I hope this helps you today.
โ Emenike E.
PS: Real estate marketers, you are free to swipe this for your marketing. Real estate investors, you are free to implement this or hire me to assist you in implementing this. Developers, you are free to invite me to speak to your marketers and investors
