REITs vs. Buying a Property: What’s the Best Investment Choice in Nigeria?

Believe me, we’ve all been there—when you’ve always wanted to invest in real estate, but every time you check property prices, the figures give you heart palpitations. A decent apartment in Lagos? Think ₦50 million upwards. A plot of land in Abuja? Ha! You better have deep pockets. For many Nigerians, owning a property feels like a distant dream. 

But what if I told you that you don’t need up to that amount to invest in real estate? That’s where Real Estate Investment Trusts (REITs) come in.

When it comes to real estate investment, the big question is: “What’s the best investment choice in Nigeria—REITs or buying physical property?” So, let’s break down these two options for you, newbie or experienced. 

What is REIT?

A Real Estate Investment Trust (REIT) is a company that owns, operates, or finances income-generating real estate. Instead of buying a house or land yourself, you invest in shares of a REIT, and in return, you earn from rental income and property appreciation—without dealing with tenants, repairs, or agency wahala.

REITs are like mutual funds but for real estate. You put in money, the company invests in multiple properties, and you receive returns based on the performance of the real estate portfolio. In Nigeria, REITs are regulated by the Securities and Exchange Commission (SEC) and typically invest in commercial buildings, malls, apartments etc.

Buying Property: The Traditional Path to Real Estate 

Owning physical real estate is a long-term investment that allows you to control your property, earn rental income, and benefit from capital appreciation. Nigerians love land ownership because land never depreciates. If you buy in a strategic location, your property can double or triple in value over time.

Although, buying property requires significant capital upfront. You also need to handle property maintenance, tenants, legal paperwork, and sometimes unexpected market downturns.

Pros and Cons: REITs vs. Buying Property

How to Invest in REITs in Nigeria

1. Explore Available REITs: Look into different REIT options in Nigeria, considering their property portfolio, past performance, and growth potential.

2. Make an Informed Decision: Choose a REIT that aligns with your financial goals, whether it’s focused on commercial buildings, residential properties, or mixed-use developments.

3. Invest in REIT Shares: Purchase shares in your selected REIT, becoming a part-owner of a professionally managed real estate portfolio.

4. Track Your Returns: Stay updated on market trends and REIT performance to maximize your earnings and make adjustments when necessary.

Who Should Invest in REITs?

• Beginners in real estate investment who don’t have enough capital to buy property.
• Busy professionals who want passive income without dealing with tenants.
• Investors looking for diversification beyond stocks and bonds.

Basically everyone who would like to benefit from expert management without the hassle of direct ownership.

The Best Investment Choice in Nigeria: REITs or Buying Property?

There’s no one-size-fits-all answer. If you have the funds and want full control, buying property is a great long-term investment. But if you’re looking for low-risk, passive income with an outstanding capital, REITs offer an excellent alternative.

In a country where economic instability and inflation affect real estate prices, investing wisely is crucial. The best investment choice in Nigeria depends on your financial capacity, risk appetite, and investment goals.

So, which will it be—owning property or earning from real estate without the stress? The choice is yours!

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