Spotting the next hot neighbourhood before it becomes hotter can be a rewarding experience for any buyer or real estate investor as you’d get a great property at a cheap price and end up living in one of the most desirable spots in town. Investing in up-and-coming locations as against already popular locations gives a much better return on real estate investment.
This is exactly what happened with Lekki. Until recently, Lekki used to be a deserted swampy area on the Lagos Island in Lagos state. Now, Lekki is one of the trendiest neighbourhoods with high-end and luxury properties for sale in Lagos.
CHECK OUT: HOUSES FOR SALE IN LEKKI
ALSO READ: Advice For First Time Home Buyers in Nigeria
Identifying a future hot neighbourhood can be a challenge. What if you buy a property in a bad neighbourhood with the hopes of a rejuvenation that never happens?
Here are what you should look out for in investing in an area likely to achieve real estate success soon or in the near future:
If a neglected area in a city is being cleaned up, this is a sign that the neighbourhood might be on its way up, especially if the government is willing to invest its money into the area. The next big projects for an area are usually deliberated upon or mentioned during town hall meetings or Community Development Association (CDA) meetings. Remodelling of houses by homeowners is a sign that property values will increase.
CHECK OUT: HOUSES FOR SALE IN LAGOS
Sweeping the grits off the streets and transforming it into a more presentable area will entice people to move into the locations and that’s when a property will be in demand.
The closeness of a neglected neighbourhood to an already developed or high-end one increases the development chances of an up-and-coming area. This is because development expands outward and is sure to have a ripple effect on neighbouring environs especially as prices in the neighbourhood centre start to rise. If the prices of properties in an area have gone up in recent years, it is likely that the reputation of the neighbourhood is going up as well. So as a prospective homeowner, look for areas that aren’t so popular but have surrounding areas that are already popular and desirable. When the popular areas get overly popular and expensive, the demand for property will spill into surrounding locations. Lekki has become increasingly popular and that has had a direct impact on surrounding neighbourhoods like Ibeju Lekki and Ajah – which are now becoming a ‘hotspot’.
CHECK OUT: PROPERTIES FOR SALE IN AJAH
Areas with access to major roadways close to employment centres, public transportation and bridges tend to be prime for settling down since transportation plays a key role in accessibility for work and is one of the biggest factors that draw buyers and renters. Look for areas with good transport links or those with plans to improve local transport as they can add considerable value to a property’s price tag.
ALSO READ: 3 Factors That Affect the Price of a Home
Buyers should be looking at employment activity as if there is an area that’s anchored by jobs, it can weather any storm. A good indication of a neighbourhood showing signs of advancement and ambitious development is the presence of huge development projects and migration of businesses to the area. Such ones that will encourage a mass growth in employment like factories or hospitals which will attract hundreds if not thousands of people from other areas. These people will need places to live or rent. A local population growth will mean more commodities needed in the area.
Age demography plays an important part in determining areas which will see the most growth. Young people are often priced out of established neighbourhoods due to the price of renting homes in the areas as such, they often head to neglected neighbourhoods with cheap and inexpensive rent prices. Young professionals also prefer to find homes near to local stores and transport links, this, in turn, encourages more local business owners to follow.
Places that have had an influx of people in their 20s and 30s will inevitably experience house price growth in a short space of time. Before long, up-and-coming areas like these are transformed into urban suburbs in response to the demand from younger people with disposable income.
Keep in mind that buying in an up and coming neighbourhood takes long- term vision. It can take a decade or less for prices and reputation to change. Migration or change in laws may stall development in a big way.
On a final note, wherever you decide to invest in, make sure you get in early.
Now you know how to play the buy-to-let game, check out Tolet.com.ng to buy properties in up-and-coming areas within Nigeria.