Investing in land is a great way to build up your finances and make your money work for you. This is due to real estate investments typically having an upward trajectory and tends to appreciate so that when you resell, you will do so at a profit. Unlike a car purchase, for instance, which loses value right from the second it leaves the car dealership.
As great an investment that it is, buying land in Lagos or anywhere else in Nigeria, for that matter, comes with numerous challenges. As a prospective buyer, you must do your homework; you must consider the various factors involved before paying out huge sums of money to buy land. If you are not careful with your purchase, you may buy a land that is not worth the soil that it’s made of or you may simply end up losing your savings to fraudulent land agents.
The first thing to consider as you prepare to buy land is your financial status. Do you have enough capital to invest in such a purchase; can you afford it and still have money left over for the necessities of life?
When you figure that out and you understand the basics of land sizes and measurements, you should consider the location of the land. For certain, some locations are better than others, but do you have the budget to buy land in your preferred location and does the land have any encumbrances?
Once your finances are in order and you’ve identified a desirable location, you have to ensure that you do your due diligence. Now, this is the tricky part; without doing your due diligence, you may expose yourself to all manner of losses and heartache. Even if the seller of the property is your friend or relative, do not take things for granted. Ask questions and do not bother about whether or not the seller’s feelings will be hurt. Land doesn’t usually come cheap, and it’s your hard-earned money and peace of mind that are at stake.
It is best not to put all your trust in documents you are given about any landed property until you have done your own investigations on the property. The best thing to do is to hire the services of a reputable registered surveyor who will measure the land and take the coordinates. The coordinates will then be charted at the state’s Surveyor General’s Office to determine the status of the land.
It is only if and when the coordinates your Surveyor picked correspond with what’s on the documents you were given, can you begin to rely on the survey from the seller. If the charting reveals anything other than a clean title, please forget about that particular property and look elsewhere.
Charting is extremely important to you as the buyer as it reveals the necessary information that will inform your purchase. Not only does it give the true location of the land, but it also reveals its present status such as whether or not there are any encumbrances on the property.
Land Acquisition Categories
In Lagos State, as an example, a land acquisition can fall under one of the following 3 categories:
- Free from Government Acquisition
- Committed Acquisition
- Global or General Acquisition
Land that is Free from Government Acquisition is when land is free from any known encumbrance and can be transacted on without fear. Your responsibility, however, is to be sure the documents are genuine and that you are buying from the rightful owner.
Land with the status of Committed Acquisition belongs to the government and cannot be made available for individuals for purchase. Land with this status is an indication that the government intends to use the land for a specific purpose such as the provision of amenities or infrastructure. If you make the mistake of buying land with a status of Committed Acquisition, then you would have just given someone money for a property that will never become yours. You may be able to occupy the land, but only until you get booted out by the government when they are ready to use it.
With a status of Global or General Acquisition, the land can become free by a process called excision or ratification. It is important to note that according to the land use Act of 1978, all land in a state belongs to the government of that state. Therefore, if the customary owners of a parcel of land want to make use of it, they have to apply to the state government who releases the land through the process of Excision or Ratification. If a piece of land has not been excised or ratified, do not go near it.
We have agreed that buying land is a great way to invest your money and build capital, but it is very easy to make mistakes and lose money along the way. Before setting out, you should think hard and long over how much you want to invest, where you want to invest, and the status of the land you want to invest in. Even if you have an idea of what you are doing or have bought or sold land once or twice before, it is advisable to use reputable professionals in all your land acquisitions. Do not take it for granted, no two transactions are ever the same. Do things right and avoid regrets in the long run.