The concept of a condo for investment purposes is relatively new. In the last decade, various opportunities have arisen for potential investors for adding this investment type to their portfolios. The option to invest in condos is available across the world, including Lagos.
How do condos investment work?
Investment in a condo could be defined as a buy-to-let investment in Lagos. You can purchase the unit and also have the option to let it out for payment of guests. There is a management company that oversees the process for the investor.
For the purpose of investment, condos will provide various options to investors including personal usage and payment terms. Some of these differences are:
Guaranteed rental options:
There are some investments that provide a guaranteed rental scheme. This also means that they can help to provide potential investors with a safe and sound source of income for a specific amount of the investment period. However, in few cases, it could be for life. As a result, the buy condo investment is a viable investment opportunity for potential investors.
Personal usage:
There are some investments that provide personal use of the condo by investors. It is usually limited to a specific amount of days in a year. After decreasing the number of nights, the investor is provided using the condo.
As a result, it helps to maximize overall rental returns for potential investors. The ultimate strategy for investment is letting out a condo throughout the year without taking advantage of the personal use allowance.
Split income and split profits:
In many investments within the real estate industry, income derived from a unit is split between the management and investor. This helps to provide a financial incentive for the management team to gain income from various other amenities they provide in a condo.
There are many condos that can pool the income derived from condos between investors. The primary aim of this strategy is to make sure that only one condo would generate less profit when compared with the other in the same building.
Moreover, if the management does not do sharing of profits in this manner then they would be rotating condo using. This will help to make sure that no condo is unused. As a result, all condos will generate income to buy hotel-condo investments.
What are the benefits of condo investment in Lagos?
From an investor point of view, the nature of condo investments will allow potential investors for having a hands-off approach for investment in Lagos condos. An organization will manage as well as market the condo on an investor’s behalf. This is because it is mainly in their interest in enhancing revenue. The investor would reap benefits from several industry professionals that promote and manage condo unit for them.
One of the biggest benefits for individuals that want to invest in condo condos of Lagos is that this mode of investment is regarded as commercial and not residential. This allows investors to have tax-free earnings and capital growth.
As a result, investors tend to be relatively less exposed to a long-term vacancy when compared with a conventional buy-to-let property investment that could lie empty for several months at a time. Moreover, buying a condo suite investment is beneficial.
On average, the yield generated through investment in Dubai hotels is usually higher when compared with buy-to-let investments. Gross yields of nearly 15% per annum can be achieved when compared with average gross yields from conventional buy-to-lets of nearly 7% per annum.
The stream of income that has been placed on the yield could help to increase the overall value of the condo building. Investors in Lagos have an option of gaining benefits from a quality development that would have amenities that are beneficial for guests.
This will increase the overall chances of obtaining a higher yield on investment. From a financial perspective, the monetary value of hotels in Lagos has been primarily dependent on economic market conditions. So, if there is an improvement in the economic climate, the hotel industry should also improve immensely.
Specific factors influencing the success of buying a condo suite investment in Lagos
Location:
One of the key factors that influence your hotel condo investment is location. It will significantly influence capital growth. You may require attracting domestic and global visitors. As a result, the development would require being very close to transport links and also for local attractions.
Different locations can help in attracting various guests to a condo. This will provide various facilities. If the investment is in a city center, the location would pull significant investment for guests because they will be unlikely for providing various facilities for potential residents. This improves the potential to buy condo investments.
Tourism:
An essential aspect that can influence a condo investments’ success is tourism. Some of the major attractions within a condo’s locality can influence the occupancy rate. As a result, investors must focus on having research for local tourism.
Moreover, they should make significant efforts for enhancing tourism in the nearby area. Hotels located in luxurious areas such as Victoria Island, Ikoyi, Ikeja, and Lekki Phase 1 could reap massive benefits for individuals that prefer condo investment.
The bookings could also be expected to be coherent without having any specific reliance on tourism. They are some of the best investments offer for potential buyers in Lagos.
Features:
Essential features of a condo that can result in increased property investment are mainly based on highly experienced management companies. These companies focus on some very important features including service quality and customer service.
They also focus on other amenities including spas, pools, and gyms, etc. A good marketing team within condo management is essential. Moreover, customer care and high-quality standards can also help to increase customer retention and profitability. Real estate investment is a viable option to buy a hotel-condo investment.
Hotel condo investment options in Lagos
For the purpose of condo investment, Periwinkle Condos Limited is also providing opportunities for prospective investors. This can help them for tapping into Lagos’s ever-increasing hospitality sector to buy condo investment. Customers now have an option for investing in an individual hotel-condo condo for a future income stream. Moreover, they can also have a free stay annually.
Individuals that want to buy a condo and purchase in cash now have an option to own a unit. Moreover, they can also become a part of the ever-increasing property market. As a result, an approximate 10% return on hotel-condo condo investment is expected on an annual basis.
The potential for having full ownership of a hotel-condo in Lagos is relatively new in the country. For the purpose of having investing secured, the hotel condos are now available along with full ownership rights. They also include title deed.
This allows potential looking to buy a hotel-condo investment or for buy to let hotel condos reap significant benefits. Moreover, potential investors have an option to sell a hotel-condo investment at any time. As a result, investing in a hotel condo has become highly popular in the Nigerian real estate industry.
The status of Lagos as a world-class business, holiday, and leisure destination has been on a growth trajectory. It has gained momentum on a gradual basis.
Due to the state of the economy as well as other property developments that can help to improve the position of Lagos at a global level, Periwinkle Residences is now developing and providing at least 160 additional keys by the end of 2021 and is set to increase its a portfolio by 30% by next year
This also adds to Lagos’s inventory of premium condos that can also fulfill the future requirements for luxury accommodation.
FAQ’s
How does hotel-condo investment work?
From a literal perspective, the idea of a hotel-condo investment is that you purchase a condo that is operated by another company. As a result, you receive a fixed percentage in return for a particular number of years. By the end of the fixed year period, the company will purchase back the condo from you at a relatively higher price. Irrespective of what happens, you are paid a fixed rate at the end of the term.
Disclaimer
“All the information in this blog is published for general information purpose only and belongs solely to the author”