By Julius Olumide Oyekunle
I came across a group of Civil Engineers in Lagos who execute the construction of hostels in areas where higher institutions are located across Nigeria. Why is this a big deal in the real estate industry and why should Canadian Nigerians take advantage of this ample business opportunity? The reasons are not hard to find, given proper feasibility studies, an investor is guaranteed a return on investment in less than 10 years rather than building flats for rent, which could take 60-100 years. What’s the essence of investing in a business without enjoying the profit in your life time?
If you’re investing in hostel accommodation in Nigeria, you should understand that you are providing a solution to the need of Nigerian tertiary institutions. Your investment is basically a solution to inadequate and insufficient hostel facilities as millions of Students seek admission to higher institutions of learning every year, without adequate provision to cater for their accommodation.
Knowing the environment and identifying the type of target students will allow the Investor to build, based on need and not for aesthetics. Students in most tertiary institutions may not be able to afford expensive suits, and of course, the economic situation in the country calls for caution to avoid wasteful spending. Hostel accommodation need not be expensive, hence, the need for moderacy. The option of having a memorandum of understanding to build inside the school premises for franchise or any other partnership arrangement is not advisable. Since more than 75% of students reside outside the school, getting a land in a trekkable distance from the school gate is next.
What you stand to gain
You can earn a minimum of 12% return on investment, given a proper feasibility study and where the cost of land and materials are relatively cheaper. You can employ the services of a registered caretaker/hostel manager who admits students, hence you earn a pension for life without necessarily adding variable costs like in other businesses. The good news is that students will always pay at the beginning of every session. So, no tenant brouhaha.
You may as well add some essential features to make your hostel a delight for students. Such extra features include, football viewing centre, laundry, gym and the provision of generating set to cater for epileptic power supply but fuelled by students, etc.
You may decide to do this alone or invest as a group or with colleagues and decide on the formula for sharing annual income. To mitigate against the risk of destruction of properties due to student protest, get an insurance company. What are you waiting for? Someone is dying to get a hostel and you need to secure your future, invest now.
Thinking of property investment? Think Hostel Accommodation
By Julius Olumide Oyekunle