Acquiring landed properties in Nigeria (as well as all over the world) is generally expensive, but with the right security measures put in place, it could become a worthwhile investment. However, over the years, I’ve come across property owners who develop their properties for commercial purposes by putting out such properties on lease or tenancy with little or no turnover on their investments.
This could largely be as a result of numerous factors such as; Inability of property owners to manage such properties individually alongside their personal engagements, Not staying updated on re-curing legislative changes as regards property ownership/management, Inability of tenants to pay up their rents as at when due, failure to carry out repairs and maintenance checks by previous occupants thereby devaluing the property, as well as other factors not listed.
In today’s post, I’ll be sharing practical tips property owners should adopt to secure their real estate investments and we believe that this would be of great help to you.
PRACTICAL TIPS TO SECURE YOUR REAL ESTATE INVESTMENT
If you have a landed property for commercial use anywhere in Nigeria, you should do the following;
- INSURE YOUR PROPERTY
Unlike most developed countries, a lot of Nigerians do not understand the importance of securing an insurance policy for their properties, but that is a wrong disposition towards insurance. As a property owner, you should take steps to secure your real estate investment against any form of hazard such as fire outbreak, collapse of a building e.t.c which may occur in future. That way, you stand a better chance of being compensated should such hazard occur.
Interestingly, there are insurance companies with various packages for any type of hazard which may occur.
- SECURE THE SERVICES OF A PROPERTY MANAGER
Managing a property, is a huge task that requires paying attention to details. Should you feel incapable or overwhelmed with handling the daily responsibilities that comes with managing a landed property, you may secure the services of a property manager, who would be available to pay more attention to the daily management of the property as well as the needs of its occupants/ tenants.
In Nigeria, there are sound property lawyers or law firms who offer such services to their clients for a fee. One out of the many advantages of securing the services of a property lawyer or law firm to manage your property is that they have hands on experience as well as tenancy is concerned, and as such, they won’t be taken by surprise when it comes to performing such responsibilities.
- CONDUCT PRIOR BACKGROUND CHECK ON PROSPECTIVE TENANTS.
I strongly recommend, securing the services of a property manager, but should you decide to take on the responsibility, especially where the property in question is occupied by tenants, ensure you run a background check on intending tenants.
Don’t be sentimental when choosing a tenant; do not rush to leasing your house to the first person that shows interest. Successful selection of tenants is a skill which only a professional property manager can help with. Get reference(s) that such tenant is reliable and can take care of your property. Conduct investigations on a prospect such as his/her workplace, former place of residence and landlord, associates, friends, religion. This information will help you determine if he/she is a good or suitable prospect to lease your house.
Remember, your property is an investment, and you are letting it out to tenants so as to yield returns on your investment. Thus, you must ensure that whoever, occupies your property as a tenant is financially capable of retaining it. Failure to do so might yield an undesirable outcome.
- ALWAYS ENSURE YOUR NEW TENANT SIGNS A TENANCY AGREEMENT BEFORE TAKING POSSESSION OF THE PROPERTY.
This is another important measure when it comes to tenancy. It is advisable as a landlord before you lease your house to another there should be a contractual agreement in this case, a tenancy agreement, this agreement will contain the term and conditions, the rights and responsibility of the landlord and the tenant, period of leasing the property, modes of payment, termination of agreement e.t.c this agreement will determine what happens when a tenant fails to pay rent, does damage to the property or fails to keep it in a satisfactory condition.
- ALWAYS KEEP RECORDS OF RENT PAYMENT AND ISSUANCE OF RECEIPT
Every property owner or property manager should always keep record of payment to avoid any sought of misappropriation or denial by tenant. This is to enable him keep track of payment made to him by his tenants also he should always issue receipt of payment to lessee or tenants.
Such records or receipts will prove useful should a court dispute arise.
- TAKE AN INVENTORY LIST
Inventory list has to do with amount of goods, materials contained in a house at any given time no material no matter how small should be left out these materials include fixtures and fitting in the house. Conduct a review of inventories with the tenant and he/she should sign a copy after inventory is taken.
- ADHERE TO TENANCY LAWS OF THE STATE
Every state has a law guiding property and tenancy matters. A property owner should always put these laws into consideration when carrying out an action also in his terms of agreement should specify the law he want to guide their transactions.
A property lawyer would advise you on actions to take bearing in mind the provisions relevant laws.
- ALWAYS PUT OUT NOTICES IN WRITING
Before any action is carried especially when it has to do with increment of rent, eviction, termination or renovation a properly written notice should be served to the tenant occupying such premises for future reference.
- CONSIDER MEDIATION SHOULD ANY FORM OF DISPUTE ARISE
It’s common knowledge that litigation takes time, costs more money and could severe whatever form of relationship which could have been left between disputing parties. With this in mind, it’s advisable to consider alternative means of resolving legal disputes should a legal dispute arise.
A lawyer with expertise in mediation, would be of great value in this regard.
- CONSIDER EVICTION WHEN THERE IS NO OTHER CHOICE
When there is no other option after all dispute resolution means have been exploited it will be best to enter eviction process with immediate effect. This is usually by writing of ‘’Quit Notice’’ or “letter of intent to proceed eviction in court|”, this letters should contain expiration date as provided by the law of the state.
Acquiring real estate is one thing, securing your investment is another. However, with due diligence and seeking professional expertise, it could be a stress free process.
We hope you found these tips helpful? For further enquiries, feel free to send an email or leave them at the comment section. We’ll love to hear from you.