While it may not be something many in this environment are familiar with, there is such a thing as valuing property and it would give you an edge if you know how to do it. Frankly, given how accessible the information is, anyway, anyone who hopes to own property someday should have a grasp of how to value to the point of estimating at a glance. Granted, the Nigerian real estate market is really not the most advanced and much of the methods that will be described are mostly applicable for developed property and most Nigerians look forward to building houses and not necessarily buying but if you hope to own real estate in a more developed market like Lagos, Abuja or even Port Harcourt (even if you aim to build it), this is something you would need to learn and master so that you do not concede value either as a buyer or seller.
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According to PropertyPro.ng, there are some factors to consider when trying to arrive at a value for any property. They are:
- Location: The location of the property plays the most important role in the overall property value of any property. Typically, a Lagos property will cost more than that of a town like Calabar. Even within Lagos, properties within the city cost more than those on the outskirts.
- Size of the property: Enough said, the larger your property the more it should be worth and vice versa if you are buying. Conversely, the smaller it is, the less it should be worth in the open.
- Crime Rate/Security: If security is guaranteed then the property should be worth more in the open market as nobody wants to move into a neighbourhood where life and property are not secured. It is for this reason, many individuals favour properties within estates and gated communities to stand-alone properties.
- Flood Risk: If the property in question is in a flood-prone district or the drainage infrastructure is poorly maintained then potential buyers will undervalue the property for that reason.
- Condition of the property: If the property is poorly maintained, it will affect the valuation of the property. Newer properties command more in the open market but age does not matter if the property is well maintained. Sometimes, if there is sentimental value to the property, like if it was once owned by a famous person or a historical monument, it would cost more nonetheless.
- Local amenities: The proximity of schools, markets, recreational facilities, good electricity, and potable water supply will add more to the desirability of the property. In any case, the quality of the amenities and not just their availability affects the value of the property too.
In Nigeria, the most efficacious method of determining property value is through the following:
- Study current listings in the area. Thankfully we have many websites that cater real estate nowadays and it just makes that process much easier.
- Monitor recent sales and if possible speak to buyers and sellers alike to determine how to proceed. This will help you that much more in determining what a property is worth.
Note that many sellers of properties slap a price tag usually to implicitly ward off certain buyers. Generally, properties are eventually sold for way less than they are initially quoted so do your homework as a buyer and make sure to brush up your negotiation skills so you can extract the most value for your outlay. If it is not too much trouble, you might want to consider hiring a real estate agent. For one thing, they are the professionals and more importantly, they are familiar with the paperwork and you do not want to go wrong with paperwork. Not in Lagos at least.
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